Grocery stores and meal kit companies, former rivals, are working together to try to head off Amazon.
In August, meal kit company Chef’d received $25 million from Smithfield and Campbell Soup and began selling kits in Gelson’s, a Southern California supermarket chain. Albertsons bought meal kit startup Plated in September 2017, a month after the Amazon-Whole Foods deal officially closed.
The pace of change picked up earlier this year with Blue Apron, Walmart and Weight Watchers in March announcing plans to bring meal kits to super markets. Blue Apron ultimately partnered with Costco to test its kits at 15 locations while Walmart developed its own pre-portioned kits in-house. Weight Watchers has yet to launch its meals.
Also during that month, HelloFresh bought Green Chef to help diversify its meal catalog with organic, vegan and gluten-free options.
A few months later, Kroger bought meal kit Home Chef in a deal worth $200 million. In June, HelloFresh said it would sell kits at Stop & Shop and Ahold Delhaize’s Giant Food and Chef’d launched its kits at 30 Walgreens and Duane Reade stores in the New York area as part of a partnership with Smithfield Foods.
“We will continue to see more grocery stores get into this game,” Meagan Nelson, associate director of Nielsen’s fresh growth and strategy team, told CNBC via email.
While the majority of meal kits are purchased online via a subscription service, in-store meal kit sales are on the rise. In the last year sales in this segment rose 26.5 percent to $154.6 million, Nielsen reported.
“The market will evolve,” Technomic’s Erik Thoresen, told CNBC. “Subscription will still exist, but won’t be the growth engine.”