Credit: Blue Apron

Blue Apron will start selling meal kits in stores, in a move that isn’t just a reflection of the company’s continued troubles, but could be a bellwether for the overall health of the meal-kit-by-mail sector.

Blue Apron helped kick off the whole meal kit delivery boom, promising a variety of fresh ingredients delivered right to your door. But since launching in 2012, the company has faced increased external competition and internal troubles.

After Blue Apron, the meal kit delivery space quickly filled up with other mail order players like HelloFresh, Plated and SunBasket–all vying for your dinner table. Then companies sprouted up and started to specialize, offering things like only proteins, or kids meals or meal services tied to specific appliances.

But as we wrote last year, mail order meal kits all faced the same basic issues:

“The other challenge that the entire meal kit industry faces is the stickiness of their basic product. Meal kits are often easy for consumers to try – companies make it simple to sign up and offer quick delivery and attractive new customer promotions. But they are a huge departure from the way we have been taught to shop for and purchase our food – and while they might be more convenient in some ways, they are inconvenient in others.”

It was convenient to get a box of ingredients delivered to your door, but you still had to do all the work of cooking whatever was sent. And you had to cook whatever you received before it went bad, whether you wanted it or not.

All of these external pressures have taken a toll on Blue Apron. According to The Wall Street Journal, the company reported 750,000 subscribers last month, which is down from a high of 1 million last year. Blue Apron’s stock price has tumbled since it went public last summer, laid off six percent of its staff in October and replaced its CEO in December.

Blue Apron was light on details about the forthcoming in-store meals to the Journal and didn’t provide pricing, saying only that they hoped to have their kits in stores by the end of this year. But by then will it be too late?

You can see why they’d want in on the in-store action. According to recent Nielsen research, “in the year ended 2017, in-store meal kits generated $154.6 million in sales, posting growth of more than 26% year-over-year. For context, total brick-and-mortar sales for center store edibles (grocery, dairy, frozen foods) dipped 0.1% last year to $374 billion.”

Retailers like Amazon and Walmart are already in the meal kit game. Amazon, with its logistical superpowers, provides same day meal kit delivery, and owns Whole Foods, which can serve as another sales channel. Additionally, at its model Amazon Go store here in Seattle, meal kits were displayed prominently, and Amazon is set to add more Go stores, all of which are aimed at making shopping convenient and frictionless.

Walmart partnered with meal kit services at the end of last year and earlier this month announced their own line of Walmart meal kits available for purchase in store. Even Weight Watchers is rolling out a line branded in-store meal kits.

Shifting to in-store provides a number of efficiencies for both the businesses and consumers. First, setting up and running external centers to prepare, process and ship meals to individual houses around the country is expensive. Partnering with a grocer reduces the shipping complexities, and if you’re a grocer, you can prepare meals at your own store.

Being able to prep food in stores can also translate into less work for the consumer. Having chopped vegetables in a kit reduces their shelf life, but also decreases the amount of work home cooks need to do. The less work consumers need to do increases the attractiveness of a meal kit. And they can pick up that meal kit as an impulse to suit their mood during their existing schedule of going to the grocery store (or have it delivered same day).

Not everyone sees it this way, however. Forrester analyst, Sucharita Kodali, told AdWeek that Walmart is three years too late entering the meal kit market, and thinks the meal kit industry isn’t that attractive as a segment. “Everyone in that grocery industry is terrified, and the investment banks and VCs are all goading these poor retailers to do things they’d never do otherwise,” Kodali said to AdWeek.

Meal kits aren’t entirely dead. Venture Capitalists invested $273.9 million in the space last year. And startups like Suvie and Tovala are using unique hardware/meal kit combos to make preparing meal kits easier.

But that may not mean much to Blue Apron. We’ll have to wait and see what’s in store for their in-store plans.

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