Consumers’ ever-growing love of and demand for convenience when it comes to the foods they eat has been a boon to the meal solutions market, and 2020 promises more growth and evolution in the category.
Cincinnati-based retail giant Kroger is one of the major players leading the way, with a commitment to meal kits and other meal solutions that the company says will continue to be one of its top priorities this year.
One of the retailer’s newest commitments is of the high-tech variety. Kroger is partnering with a software specialist on delivery of fresh prepared meals from central kitchens.
For the initial rollout, Kroger Delivery Kitchen Powered by ClusterTruck launched in Carmel, Indiana — where Kroger and software platform ClusterTruck jointly operate a kitchen — and in Indianapolis and Columbus, Ohio. Additionally, King Soopers Delivery Kitchen Powered by ClusterTruck is serving customers in Denver.
By offering multiple menus from one central scratch kitchen, Kroger Delivery Kitchen delivers fresh and delicious meals on-demand without service or delivery fees.
"The way our customers order and receive meals is evolving, and ClusterTruck's innovative culinary and digital design is cracking the code for the future of profitable meal delivery," says Yael Cosset, Kroger's chief information officer. "Kroger is leveraging ClusterTruck's advanced technology to ensure our customers don't have to sacrifice quality and value for convenience when it comes to meal delivery. Kroger Delivery Kitchen Powered by ClusterTruck allows our customers to access restaurant-quality fresh and delicious meals like never before and without having to pay excessive service or delivery fees."
Customers in Carmel, Indianapolis and Columbus delivery zones can go to KrogerDeliveryKitchen.com to place their orders online or download the ClusterTruck app. Customers in Denver can visit KingSoopersDeliveryKitchen.com.
ClusterTruck was co-founded in 2015 and launched its first kitchen in 2016. The Indianapolis-based company owns and operates vertically integrated delivery-only kitchens. ClusterTruck's “dark kitchens” are powered by a proprietary software system that uses custom algorithms to optimize kitchen and delivery operations.
Meal Kit Insights from the NPD Group:
What’s Driving Adoption?
When it comes to meal kit users, convenience is the key purchase motivator. Sixty-seven percent of current users feel their life is hectic and rushed compared to 42% of non-users. Meal kit users are twice as likely to cite convenience as an important purchase factor. Furthermore, households with children have been earlier adopter of meal kits, with 20% having tried them at least once. The industry also seems to be capitalizing on spontaneity, as 58% of users decide to purchase a meal kit the same day.
Meal Kits Appeal Strongly to Men
Interestingly, three out of five current meal kit users (62%) are male. Furthermore, male users also expressed an intention to use a meal kit service more frequently in the next six months when compared to female user (48% vs. 39%). The male user is also a more consistent user, with 68% of those using a meal kit in the past year still currently using a service, vs. only 48% of women.
Users Are Highly Satisfied
Current users are highly satisfied with meal kit services, with over 91% indicating that they were very or extremely satisfied with their meal kit. When it comes to lapsed users, the highest reason users were no longer using the meal kit service was due to the perception of the kits being too expensive with 52% expressing this as a key reason for no longer using meal kit services.
A market differentiator
Fresh perimeter foods — and meal solutions in particular — will play a critical role in Kroger’s future, according to the company. Management highlighted the company’s fresh food offerings as a “differentiating strength” for the retailer in 2020.
“Our fresh departments drive trips, loyalty and gross margin, and they're a true differentiator,” says Joseph Grieshaber, senior vice-president of merchandising. “Our product standards, selection criteria and supply chain are core strengths and are built to deliver first-to-market and best-in-the-season fresh products across the United States. Customers tell us they choose the store they shop based on nine key categories, and they're all fresh. Produce, meat and dairy lead that list.
“Dinner tonight is the top reason customers go to the store on any given day, but replenishing produce, meat and seafood quickly follows. And finally, as we look at advertising testing, we see a clear pattern where spots that focus on fresh score more strongly on key customer measures, including likelihood to shop and brand love.”
One of two top fresh food initiatives being undertaken by Kroger is enhancing meal solution options. Fresh meal concepts are seen as a point of differentiation by management.
“We are growing our meal kits, ready-to-cook and ready-to-heat assortment,” Grieshaber says. “In 2019, we expanded the Home Chef assortment from 725 stores to over 2,000 stores today, and we have expanded beyond the original meal kits to include oven-ready kits, ready-to-heat sides and entrees. We are seeing double-digit growth in fresh meals and expect that momentum to continue in 2020.”
A wider net
Also new for Kroger, the retailer and Chicago-based Home Chef have expanded meal kit service to additional cities, bringing the weekly rotating meal solutions to 500 additional Kroger Family of Stores across the country.
In addition, homechef.com has launched a customizable meal kit feature for online orders, allowing customers to have more flexibility in deciding what's for dinner by providing the choice to change and upgrade recipe ingredients. The feature—the first among leading meal kit brands—offers unprecedented variety for customers.
"Kroger continues to redefine the customer experience and provide new ways to shop for, prep and cook meals through exciting brick-and-mortar and digital experiences," says Robert Clark, Kroger's senior vice president of merchandising. "In October 2018, Kroger introduced Home Chef retail meal kits, and we're now expanding to add the easy-to-prepare recipes to hundreds of new locations, providing convenient access to the meal solution at more than 700 stores. We look forward to the continued growth of Home Chef in 2019 through expansion and new products."
"Home Chef is proud to continue our evolution toward becoming more than a meal kit delivery brand," says Pat Vihtelic, Home Chef's founder and CEO. "With continued innovation and personalization, we are providing customers with more ways to enjoy fresh, delicious meals that align with their individual tastes."
Home Chef's fresh, pre-portioned ingredients and simple recipes are guaranteed to delight everyone around the dinner table, according to the company. Each week's rotating retail menu showcases a variety of classic meals, including Home Chef Express meal kits that can be prepared in 15 minutes or less. Each meal kit is designed to serve two and starts at $8.50 per serving.
Kroger and Home Chef have also expanded their offerings in addition to their geographical reach.
The companies have rolled out three new meal kit options to enhance the existing selection of products sold in more than 900 Kroger family of store locations across the country.
The test includes Home Chef Oven-Ready meals, Home Chef Heat & Eat meals, and Home Chef Lunch Kits.
The Oven-Ready line includes fresh, ready-to-cook ingredients packed in an oven-safe tin, while the Heat & Eat line includes fully-cooked, ready-to-heat meals, proteins and sides that can be prepared in a little as five minutes. The Lunch Kits include salads, grain bowls, sandwiches and more with fully cooked proteins that can be prepared easily at home or at the office.
“Our customers’ dinnertime needs are constantly evolving,” says Pat Vihtelic, founder and CEO of Home Chef. “We’re thrilled to meet more of their needs with high-quality meal options that consider different lifestyles and levels of preparation and cooking times.”
The new items will first be available at select locations in Illinois (Mariano's) and Ohio (Kroger locations in Cincinnati and Columbus) starting this month. Kroger says it anticipates rolling out the products to additional markets throughout the year.
Food hall innovation
Kroger has also opened a 52,000-square-foot urban format store in the downtown area of its hometown of Cincinnati. The location offers the company's first food hall, called On The Rhine Eatery.
The food hall includes Cincinnati restaurants Django Western Taco, DOPE! Asian Fare, Eli's BBQ and Queen City Whip, as well as Kroger's 1883 Cafe and Bar concept.
"Kroger is thrilled to introduce our first food hall and offer a one-of-its-kind shopping experience in our hometown of Cincinnati, providing a convenient location to experience delicious, quality meals and foods. This innovative destination highlights Kroger's food-first culture," says Rodney McMullen, Kroger's chairman and CEO. "Kroger's new store offers something for everyone. We invite all to visit the store to meet our wonderful associates, shop for fresh groceries and discover their new favorite restaurant."
The two-level Kroger store features grab-and-go and ready-to-heat meals for lunch and dinner, in addition to fresh fruits and vegetables and a traditional grocery shopping experience. The store offers an exclusive Starbucks coffee blend as well as a walk-up window for beverage orders. Located in the city's central business district and accessible to downtown workers and residents as well as customers from the historic Over-the-Rhine and West End neighborhoods, the store anchors an 18-story residential high-rise and is located a block away from Kroger's national headquarters.
On The Rhine Eatery can accommodate up to 200 customers and offers indoor and outdoor seating as well as a full-service bar, offering signature cocktails, local beers, tasteful wines and Kentucky bourbons.
"On The Rhine Eatery features emerging restaurants and true tastes of Cincinnati – all handpicked by Kroger's culinary team to create a popular hangout for meals, cocktails and community," says Teri Rose, Kroger's senior director of culinary development. "Cincinnati is Kroger's hub for culinary innovation and experimentation, and the food hall is an example of the types of concepts and ideas we're creating every day."
Peapod teams with award-winning chef on kits
Online grocery leader Peapod has teamed with a James Beard Foundation Award-winning chef for a line of meal kits.
The collaboration between Peapod and Stephanie Izard began this summer with two meal kits inspired by some of Izard’s favorite dishes. More dishes are planned for the fall.
Izard, the first woman to win Bravo's “Top Chef” competition, runs several critically acclaimed restaurants in Chicago: Girl & the Goat, Little Goat, Duck Duck Goat and Cabra.
The first two kits are Yucatan Fish Tacos and Belize Grilled Chicken Sandwich. Coming this fall are Roasted Asian Chicken Thighs and Hong Kong Slow Cooked Short Ribs.
"As a mom and business owner, I understand how life can just get busy! But that shouldn't take away your chance for a tasty dinner," Izard says. "I'm excited to partner with Peapod to make some of my favorite recipes easy to cook at home."
The kits come in serving sizes of four, starting around $6 per serving. All kits feature pre-measured, pre-cut, and pre-washed fresh ingredients that can be added to customers' shopping carts along with other grocery essentials.