The day of the meal kit is not gone, and it likely won’t be for a long time. It just looks a bit different now.
Direct-to-consumer meal kits are being answered, in varying forms of success, by retailers offering their own take on the product.
“Meal Kits 1.0 were a pioneering product that has already evolved,” says Robert Jones, president of Newport Beach, California-based True Food Innovations. “Grocery stores are finally addressing eCommerce and last mile delivery options, and there is no closer more efficient last mile option than the grocery store down the street.”
Why the supermarket can succeed
What makes the supermarket perhaps the ideal provider of meal kits? For starters, their versatility.
“Stores are multi-purpose, they serve as a place to shop as well as inventory for delivery to consumers,” Jones says. “The progress that grocery has made now in a very short period of time will activate their stores in a new way of shopping and delivery for consumers.”
David Kamen, assistant director of consulting for the Culinary Institute of America, based in Hyde Park, New York, says retailers already have the shopper’s attention and they provide a much more reasonable delivery option than the meal kit companies generally offer.
“I think it was a great introductory business model to say ‘Hey you can do this and we can provide it,’” he says. “There are some challenges in ordering online, in advance, and having things shipped to you via UPS and dealing with all kinds of Styrofoam packaging. And what happens if you’re not there on a summer day and the package has to sit out all day in the heat?”
What challenges retailers face
While supermarkets may be the perfect medium for today’s meal kits, it’s not something most chains can jump into quickly and easily, especially if they try to take on production themselves.
For one, producing meal kits requires a lot of labor and a lot of space, especially when it comes to smaller, regional chains.
“They don’t really have the infrastructure,” Kamen says. “Just foodservice at retail in general is a lot of work. They’re expanding the deli counters, but they don’t really have the infrastructure to offer the wide range of prepared foods that some of the other more upscales markets do. With the exception of some of the larger, slightly more upscale retailers, the challenge has really been just availability and variety.”
But even when retailers do find an option that works with them — either in producing their own or partnering with a supplier — another giant hurdle presents itself — one that has proven difficult to clear.
“Retailers were all experiencing good sales but due to short shelf life were experiencing 30%-plus in spoils,” Jones says. “This amount of spoils could not be priced into the product as it would make the price of meal kits in retail not affordable or commercially viable.”
The shelf life solution
True Food Innovations says it has cracked the code when it comes to providing retailers with fresh meal kits. Six months after the company acquired Chef’d, it launched new clean label meal kits under the Chef’d and True Chef brand.
“Our strategy is to provide retailers with a multi-brand offering with the ability to provide meal kit options based on price, demographics and geography,” Jones says. “We have cracked the code that has limited large-scale retail roll outs of fresh meal kits.”
Jones says the company asked its culinary, food science and product development teams to look at things differently. The category needed more shelf life on proteins and vegetables.
Advancements in high pressure processing and patent-pending formulations that Jones says are the first of their kind helped the company roll out meal kits that carry a 55-day shelf life.
“We have incorporated a myriad of technologies to achieve long shelf life with clean label meal kits,” Jones says. “Our food science team has been working for years on pure R&D related to new categories of food. This is a long process of experimentation, testing and trials.”
Jones says others in the space are now addressing the spoilage issue differently.
“The consumer will ultimately make their choice as various iterations of product development and meal kits are sold in retail stores,” he says. “We believe that our complete meal kits address the value proposition for the consumer: convenience to purchase, with all items in the kit including protein and vegetables; convenient to make, with just 15 minutes of prep time; and price points which make sense to the consumer, starting at $7.50 per serving.”
In discussing where meal kit companies go next, Kamen lays out a direction that is like that of Chef’d and True Food Innovations.
“I believe that the online meal kit retailers are going to end up having to fade away or become supply partners for brick and mortar retailers,” he says.
It’s the approach True Food Innovations took with Chef’d. After the eCommerce business abruptly closed up shop in 2018, True Food Innovations swooped it up and turned it into a successful retail partner.
“I see a large migration of consumers that enjoy healthy clean foods migrating from a direct to the consumer subscription model to purchasing in store or by way of the numerous last mile delivery options like Instacart,” Jones says.
Don’s Food Products, a producer of artisan deli salads and side dishes based in Schwenksville, Pennsylvania, has also started to look into meal kit partnerships.
Carl Cappelli, senior vice president of sales and business development for Don’s, says the company’s products fit with the general meal kit theme of clean, high-quality products.
“You see a lot of retailers have gone into meal kits and are making their own,” he says. “Why not put our products in there? Think of them beyond just a side dish, they can be a meal kit component.”
He describes meal kits with locally raised meats, and locally sourced vegetables with a Don’s Food side dish or salad, which can either be private label or co-branded on the meal kit package.