Report: Amazon has already started selling its new meal kits
- Amazon has begun offering its new meal kits to customers in select markets, according to Geekwire. The tech site interviewed a Seattle resident who had ordered and prepared two “dinner for two” kits recently — an $18.99 Steak Au Poivre and a $15.99 vegetarian dish.
- The site lists 17 different meal kit options, including Roast Chicken with Tarragon-Mushroom Sauce, Tacos al Pastor with Pork, Veggie Burger with Harissa Aioli & Smoked Eggplant, and a Wagyu Beef Burger with Bacon Jam & Sweet Potato Fries.
- Amazon currently offers meal kits through third-party sellers like Tyson and Martha Stewart's “Martha and Marley Spoon,” though speculation that the e-commerce giant would offer its own kits had heated up recently. On July 6th, the company filed for a trademark for a meal kit line with the U.S. Patent and Trademark Office.
It’s unclear if any markets besides Seattle have access to Amazon’s new meal kits, and if the kits are available to all Amazon members or just members of its AmazonFresh service. A request for further information from Amazon wasn’t returned as of press time. However, Geekwire has provided a detailed rundown of the offerings in their current form.
The 17 different meal kits have been available to users since late June, judging by reviews. Amazon notes on its site that the kits take about 30 minutes to prepare, and even includes a catchy tagline: “We do the prep. You be the chef.”
The news has so far had the biggest impact on Blue Apron, which went public late last month. Following reports that Amazon had filed a patent for its meal kits and begun selling them in limited release, Blue Apron’s stock tumbled 11% on Monday, then another 3% on Tuesday, according to USA Today. The company, which had to slash its stock price range after Amazon announced its intention to acquire Whole Foods for $13.7 billion, has had trouble making money and struggled to show a model for future profitability amid rising competition and marketing costs.
Amazon’s entry into the space could spell trouble for other players in the meal kit delivery industry, given the e-commerce giant’s resources and established relationship with millions of consumers. The move could also disrupt the grocers like Kroger, Publix and Hy-Vee that have begun offering meal kits in their stores.
However, Amazon’s dominance in the $5 billion meal kit industry is far from guaranteed. As with grocery e-commerce, online meal kit delivery faces numerous obstacles to profitability, from shipping costs to wrangling fresh ingredients. Blue Apron, the largest provider in the industry, has seen customer spending and order frequency decline over time.
The big question is whether Amazon will offer its meal kits at Whole Foods stores, assuming the acquisition of the grocer goes through. This seems likely given consumer interest, the potential for higher margins and the fact that Whole Foods has already begun offering meal kits through Salted and Purple Carrot. Here again, though, Amazon will face challenges from the likes of Kroger and Publix, which offer private label kits that leverage their own fresh capabilities. According to data from Nielsen Fresh, supermarkets sold $80.6 million worth of meal kits in stores last year, and should see higher returns this year and in the years to follow.
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