Walmart selling third-party meal kit on its website
- Walmart.com has begun selling meal kits from Takeout Kits, a California-based company that sells international-themed meal kits nationwide, according to Rachael Lake, the company's CEO. Takeout Kits is the first and so far the only third-party meal kit company to have its products listed on the retail giant's website.
- Various outlets reported this fall that Walmart would offer meal kits on its site in early December after a vendor told The Street of the retailer’s plan. According to that vendor, Mike McDevitt, CEO of Terra’s Kitchen, Walmart plans to feature kits from a variety of companies on its site, and charge a referral fee for each order. Lake declined to discuss the terms of the deal with Food Dive. A Walmart representative wasn’t immediately available to provide further information.
- Walmart.com lists eleven international-themed choices from Takeout Kits, including "Indian Chicken Tikka Masala and Basmati Rice” and “Spanish Paella with Chorizo and Artichokes.” Each meal kit serves four and ranges in price from $32 to $35. Lake told Food Dive that Takeout Kits has two other options that are currently out of stock but will eventually be available on the site — a “German Beer Garden Spätzle” kit and an “Italian Black Truffle Risotto” kit.
Walmart.com offers a selection of frozen and shelf-stable meal kits in stores and on its website, including its own line of Great Value "Chef Inspired" kits. But the deal with Takeout Kits is the retailer's first official partnership with a separate meal kit company. At a time when retailers are searching for ways to tap into the the $5 billion market, this could be a significant development for the meal kit industry and for the world's largest retailer.
It’s unclear at this point how many other meal kit companies the retailer has signed up, and when they might come online. A Walmart representative wasn’t immediately available for comment. Earlier this fall, Mike McDevitt, CEO of Terra’s Kitchen, told The Street that Walmart had been in talks with meal kit companies, and planned to list offerings without holding any inventory, essentially serving as a sales portal and collecting a referral fee in the process.
Rachael Lake, CEO of Takeout Kits, confirmed to Food Dive that her company will handle the fulfillment of each order from its Sunnyvale, California facility. She declined to offer further details about the arrangement.
Launched last year, Takeout Kits differentiates itself with a lineup of international meal kits, including Thai, Indian and Moroccan dishes. Each of the company’s meal kits offered on Walmart.com serve four, and have a two-month shelf life. Customers who order a kit on Walmart.com can expect to receive it in two to five days.
Walmart’s meal kit marketplace is a low-stakes way for the retailer to test the waters in the high-demand industry. If the test goes well, Walmart might conceivably move top sellers inside stores, create its own line, or follow Albertsons and buy a meal kit company. Whatever the retailer chooses to do, it has the scale and resources to effectively compete with two of its biggest competitors: Kroger, which has its own Prep + Pared line, and Amazon, which recently began testing meal kits in Seattle.
According to Nielsen, grocers sold more than $80 million worth of meal kits in stores last year. That figure is expected to surge this year. Overall, supermarkets see meal kits as a complement to their in-store prepared foods offerings, and as popular additions to their growing online shopping platforms.
For meal kit companies, inking deals with grocers carries the promise of additional revenue and exposure in a marketplace that’s quickly become overcrowded and difficult to turn a profit in. Walmart, which grew its e-commerce sales 50% during the most recent financial quarter, could prove to be a lucrative partner.
Plated sold to Albertsons in September for what sources have reported as $200 million, while HelloFresh, a German-based company that’s quickly making inroads in the U.S., just went public in Europe. Blue Apron, the largest company in the market, has struggled with one setback after another. The company just replaced its CEO last week and has a stock price that's currently worth 60% less than when it went public in late June.
Lake says she hopes Takeout Kits’ deal with Walmart boosts awareness for the company. Takeout Kits hasn’t secured funding like some of its competitors, she said, and as a result hasn’t done much marketing or advertising.
“We hope this will catapult our brand out there and also look to take a larger share of the market,” Lake told Food Dive.
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