What’s in your refrigerator? Why grocery stores will beat meal kit companies at their own game

What’s in your refrigerator? Why grocery stores will beat meal kit companies at their own game

July 22, 2018

Meal prep kits were supposed to make the supermarket obsolete. The opposite has proven true. Now the companies that make the kits may need to partner with a grocery chain to survive.

The Early leaders like Blue Apron and Plated quickly declined as competitors and grocery stores replicated their service. And Amazon, which dabbles in meal kits, lurks in the background with its ability to disrupt entire markets.

Shares in Blue Apron (APRN) have fallen 75% since it went public last year. The company reported another round of disappointing earnings last week.

Chef’d, a meal kit startup that tried partnering with recognizable names like Atkins and Campbell Soup suddenly shuttered its home delivery service in mid-July. It’s now trying to sell kits in grocery stores, which may be the right move, according to R.J. Hottovy, a senior restaurant analyst at Morningstar.

Meal kit brands that are primed to survive are the ones that married off, such as Home Chef, which recently sold to Kroger (KR), Plated, which was purchased by Albertson’s, and Gobble, which reportedly is partnering with America’s No. 1 grocery chain Walmart.

“You need to be part of a larger organization,” Hottovy said.

The costs of logistics are so overwhelming that it’s not financially viable to go it alone, Hottovy said. But under a larger umbrella, a meal-kit company can benefit from an existing distribution network, access to ingredients and an established customer base.

“I think there’s a place for [meal prep kits] and there’s sufficient consumer demand,” says Hottovy. “They offer a level of convenience that people are looking for. But the idea that you send a weeks worth of meals at once is evolving.”

Darren Seifer, a food consumption analyst from research firm NDP, agreed. He he recently told CNN in a TV interview that Blue Apron customers were frustrated by being locked into a weekly delivery schedule that requires them to pause when they aren’t able to receive a package.

More than half of Blue Apron customers also said price-per-meal was too expensive, according to Seifer.

More meal kit options are becoming available, so it might not make sense to lock in with a single provider.

Chick-fil-A became the first fast food company to try a meal kit service at some locations. Plant-based meal purveyor Purple Carrot is trying to appeal to vegetarians. Amazon sells a selection of kits on its website and is incorporating them into Go concept store. Walmart is selling “one step meals” in 2,000 of its U.S. stores.

Seifer compared the number of companies in the meal kit business to the “dot com boom-and-bust era of the ’90s.”

“There’s lots of companies jockeying for marketshare but they aren’t focusing on the bottom line,” he said. “The segment is still in the mode of expanding user base and are figuring out how profits come later.”

According to Time magazine, the Top 5 meal prep companies are:

1. Plated.

Launched in 2012, Plated offers the best value for your money. MONEY found people can save, conservatively, about 12% by purchasing a meal from Plated, as opposed to buying the same high-quality supplies from their local grocery store. While it’s not the cheapest meal kit around (about $11.95 per person), Plated delivers superior ingredients you can easily transform into a delicious meal.

2. Blue Apron

It turns out there’s a reason Blue Apron is basically the Netflix of meal kit delivery services. It has really smoothed out the pain points of a delivery service, creating an incredibly easy process to reduce time and stress. All that and an attractive price point. It’s less than $10 per person, which is one of the lowest costs among the brands tested.

3. Sun Basket

If you’re constantly shopping in the organic section of your local grocery store, Sun Basket’s $70 weekly “classic menu” service is a good value for your money. The company, which touts its organic produce, performed well in testing, especially when it came to time. In general, analysts completed the meals sent in about 10 to 15 minutes less than the recipe estimated.

4. Green Chef

In addition to delivering organic, sustainably sourced ingredients, Green Chef promises its customers restaurant-quality meals. And the company really hits the mark. But at $81 a week for a mix of vegetarian and traditional meals, it better taste great, since it was the most expensive service that was tested.

5. Martha & Marley Spoon

Billed as Martha Stewart’s meal kit delivery service, Marley Spoon delivers generously portioned, $11-per-person gourmet meals with easy-to-follow recipe instructions.

Sources: CNN Money, Morningstar, Time magazine and Money magazine. 


When Toys “R” Us announced plans to close all 735 of its U.S. stores back in March, it wasn’t exactly a surprise as sales and marketplace shares were lost to online companies like Amazon. This past Friday the harsh reality hit home as Geoffrey the Giraffe said his final goodbyes and like Lionel Playworld / Kiddie City and KB Toys before them, Toys “R” Us closed forever affecting close to 30,000 employees.

But as one major toy brand rides off into the sunset, another is rising from the ashes.