- The Kroger Co. has opened a 12,000 square foot Culinary Innovation Center in downtown Cincinnati focused on developing recipes and other concepts for its private brands, meal kits and other mealtime offerings, the retailer said in a press release.
- The commercial test kitchen and education center has multiple cooking stations and capabilities. It includes technology that allows video streaming across the country of educational sessions to Kroger associates.
- The research-and-development lab is an outgrowth of Kroger's Restock initiative, which focuses on increased efficiency and promising revenue streams, including prepared foods and restaurant offerings. Kroger has expanded its Prep + Pared meal kit brand to hundreds of stores, and last fall opened its first restaurant, Kitchen 1883.
Dollars spent on food away from the home recently overtook spending on at-home meals, meaning more consumers are eating out. When announcing the company's Restock initiative late last year, Kroger officials said they wanted to pull meal dollars back into their stores.
"If you're eating, we want to serve you, and unless it's dinner at a white tablecloth restaurant, that's a meal we should be able to provide to you," Kroger CEO Rodney McMullen told attendees at the company's investor conference in October.
Doing so isn't going to be cheap. But, the opportunity to build sales with already loyal customers is ripe, and the profit margins on meal kits, restaurant food and like offerings are looking good to Kroger, which has struggled to generate revenue in recent years. With its new Culinary Innovation Center, the retailer is showing its serious about claiming more mealtime spending by providing an engine to fuel innovation.
Meal kits are a $5 billion industry that Kroger hopes to tap into with its Prep + Pared line, which is now available in Ralphs stores along the West Coast and in Kroger stores in the Midwest. The brand offers a more flexible, convenient solution for customers, but Kroger also needs to match — or at least come close to — the culinary appeal that online meal kit providers like Blue Apron and HelloFresh offer.
Private brands, meanwhile, have become a booming business for Kroger. Its Simple Truth line recently eclipsed $2 billion in annual sales. To stay ahead, however, the company needs to continue pushing the envelope on flavor innovation — something that will no doubt be a focus for its new culinary development center.
Smart supermarket companies know that to stay one step ahead of surging competitors like Amazon, Walmart and Aldi, they must excel in all aspects of food, including food kits, prepared food and their restaurants. They must, in short, formulate their philosophy on food. Kroger is doing just that, and could reap the rewards for being focused and innovative.