Categories: Business

When Tyson delves into meal kits, has “convenience” come full circle?

Blue Apron. Purple Carrot. HelloFresh. They both provide home cooks with the pre-measured ingredients and instructions for cooking selected dishes at home, and also spare the cook the shopping trip. Delivered straight to your kitchen.

But many of those companies have been having a rocky time of it, struggling for profitability, customer retention, and price competitiveness. (The sector is now rife with discounting which Purple Carrot Chief Executive Andy Levitt blames for having “created a promiscuous user base.”) New investment in the sector has dropped by more than half in the past year. And a lot of the difficulties have to do with the logistics of that tortuous “last mile.”  One investor who was burned told the following to the Wall Street Journal: “There are a lot of points along the value chain where things could fall apart.”

As small as the market for meal kits may be so far, their revenue keeps rising.

Maybe delivery is not an inherent part of a meal kit’s value proposition. Maybe its success can be found as just another item on the supermarket’s perimeter. Purple Carrot is test marketing a customized smaller meal kit on a shelf at Whole Foods in Dedham, Massachusetts. A box with a single meal for two people goes for $19.99. And of course the retailers are just as interested as suppliers in what customer reaction will be. Kroger is looking for a meal-kit partner, as well as wondering whether or not to create its own line.

As small as the market for meal kits may be so far, their revenue keeps rising, the average number of trips to grocery stores keeps falling, and conventional high-volume suppliers are feeling the pinch and beginning to stir. Tyson Foods, Campbell Soup, and Hershey are all looking to get into the act, both to reduce the amount of market share they may be losing to meal kits, and on the irreproachable logic that Tyson et al are already in the ingredients business.  (Tyson, for example, recently started selling chicken taco kits through Amazon Fresh.)

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It is all a scramble to figure out which parts of the food shopping and cooking experience the consumer wants to be spared from, and which parts are to be cherished, identified with, and revelled in.

Each step entails its own demands, and probably for each of those steps there is a constituency that will pay to make that step frictionless.

Think of cake mixes, hamburger helper, and all those rice and soup products containing packages of spice to add at the right moment. Most recently, the amazing rise of salad kits, containing chopped and washed greens, such that a whole head of lettuce is increasingly hard to find in the produce aisle. Garlic is already peeled, onions already chopped, brussels sprouts already halved, flounder already stuffed and breaded, and flank steak basking comfortably in its “home-made” marinade.

Each step (e.g., making a shopping list, individually apportioning ingredients) entails its own demands, and probably for each of those steps there is a constituency that will pay to make that step frictionless. Amazon just announced it is opening bricks-and-mortar stores (“Amazon Go”) with this single convenience factor: you can leave the store with your purchases without having to check out.

With the current cultural move away from the public’s search, in lock step, for the most convenient, ‘processed’ forms of food, and towards attention to scratch cooking and stages of preparation, customers and companies are going through shifting recalculations of what the convenience quotient is for each of these operations.

Jeffrey Kittay
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Jeffrey Kittay

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