Kroger is diving into the fast-growing meal-kit business.
The supermarket chain is offering meal kits — or packages that contain recipes and accompanying ingredients — at a handful of stores and launching them nationwide over the next year, Kroger CEO Rodney McMullen said Wednesday in a letter to shareholders.
The $US1.5 billion meal-kit market is currently dominated by Blue Apron, a subscription service that now delivers more than 8 million meals a month — up from about 1 million meals per month two years ago. Blue Apron costs $US20 for a meal that services two people.
But Kroger has two major advantages compared to Blue Apron.
First of all, Kroger’s boxes are cheaper, costing about $US14 for a meal that feeds two people.
Kroger also goes a step further than Blue Apron by doing most of the food prep for customers. No chopping, slicing, dicing, grating, or other work is necessary — all the ingredients are ready to be cooked.
This means the meals can take a lot less time to make. Kroger says its meals take about 20 minutes to prepare “from kit to fork,” whereas Blue Apron meals tend to require about 45 minutes of prep and cooking time.
McMullen says meal kits are one of many “megatrends” that Kroger is hoping to tap into this year.
“Our culinary team has developed delicious meal kits that are available in pilot stores today, and we have plans to quickly make them available at scale over the course of the next year,” he said. “Meal kits are one of many offerings designed to meet our customers’ changing definition of convenience.”
The meal-kit business is rapidly growing, and getting increasingly crowded along the way.
More than 100 companies now offer the kits, including Plated, HelloFresh, Sun Basket, and Amazon (in limited cities). Supermarkets including Publix, Fresh Market, and Whole Foods are also testing the kits in some stores.
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