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Daily news and analysis about the food tech revolution

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Albertsons to End Plated Meal Kit Subscription Service

Albertsons struck another nail in the coffin of mail order meal kits yesterday when the company announced that it will be ending its Plated subscription service and shifting that brand to become one of the retailer’s private label products.

From the press announcement:

As a result, Plated’s subscription service will be phased out at the end of November, giving way to a sharper focus on how the brand can help deliver a differentiated in-store experience. The company plans to expand the Plated brand with new product offerings in additional stores in 2020.

Plated was acquired by Albertsons in 2017 for $200 million and began rolling Plated meal kits out to stores nationwide in 2018. But 2019 has been a tough year for Plated:

The bloom is definitely off the rose for mail order meal kits. Blue Apron, a pioneer in the business, continues to limp along with dismal results. A report earlier this year from Nielsen said that sales of meal kits grew with in-store retail being the engine for meal kit growth. Research this year from NPD found that 93 million US adults hadn’t tried meal kits but wanted to, and that those who bought meal kits were happy with their purchase and that meal kits had an opportunity to expand beyond dinner.

That last bit helps explain why Albertsons said its Own Brands will manage Plated “into a holistic home meal solution” that goes beyond dinner. Meal kit company Sun Basket announced this summer that it was expanding its lineup of meal offerings to include breakfast, lunch and snacks. Albertsons’ rival Kroger has also been experimenting with a new lineup of meal kit options that offer more food flexibility and require less work to make.

What I’m curious about is whether we’ll see an uptick in meal kit sales as retailers like Amazon, Walmart roll out free and superfast same-day grocery delivery. Will people order meal kits, or will service continue to bend towards convenience and allow people to just go ahead and order hot bar options (e.g. fully cooked rotisserie chicken) that arrive in an hour?

Albertsons Lays Off 10 Percent of Plated’s Corporate Staff

Albertsons-owned meal kit service Plated laid off roughly 10 percent of its corporate staff, according to Bloomberg. The cost-cutting move follows news from last month that Albertsons was scaling back Plated’s availability at its retail stores and the abrupt departure of Plated’s CEO in January.

Albertsons bought Plated in September of 2017 for $200 million, and started rolling out meal kits to Albertsons retail locations in April of 2018. The plan was to expand Plated’s meal kits out to 650 stores by the end of last year.

The layoffs amount to 25 employees in the New York City office, and Bloomberg reports that “The cuts will allow Plated to reduce expenses and better utilize the larger company’s operations structure already in place.”

After launching in 20 stores in California and 20 stores in Chicago, a recent search by The Idaho Statesman found Plated meal kits only available in 19 California stores and two stores in Texas.

An Albertsons spokesperson told Grocery Dive that the company remained committed to meal kits and that it is innovating in the space for future meal kits expansion. Albertsons said this innovation could include moving beyond the core offering of dinner and into other meals or snacks as well as wine pairings.

It’s hard to imagine Albertsons giving up on meal kits entirely, as a recent Nielsen survey showed retail outlets is where most of the growth in meal kits is coming from. Additionally, an NPD study found that 93 million U.S. adults want to try meal kits and that broadened meal categories (breakfast, etc.) were a big opportunity for meal kit companies.

Plus, Albertsons surely doesn’t want to be left behind as rivals such as Amazon now sells meal kits in its Whole Foods stores, and Kroger, which owns meal kit company Home Chef, rolls out customizeable meal kits, and has expanded meal kit sales into drug stores.

Nielsen: Move Into Retail Making Moola for Meal Kits

The move into retail has been a smart one for the meal kit industry, as the new sales channel helped drive meal kit growth in 2018, according to a report out this week from Nielsen (h/t Grocery Dive).

Overall, Nielsen found that meal kit users (both online and offline) have increased 36 percent throughout 2018 and that 14.3 million households purchased meal kits in the last six months of 2018 (up from 3.8 million household from the end of 2017). And Nielsen says there’s more room to grow, with 23 percent of American households saying they would consider purchasing a meal kit within the next six months.

Nielsen points out that the majority of meal kit sales still happened online in 2018, but growth came from in-store sales, which makes sense as meal kits made their debut in grocery aisles last year: Kroger purchased Home Chef, Albertsons rolled out Plated meal kits, and HelloFresh made a deal with Giant and Stop & Shop. Nielsen says that 187 new meal kit items were introduced at retail outlets last year, and that in-store meal kit sales generated $93 million over the course of 2018 with the number of in-store meal kit purchasers increasing by 2.2 million households in less than a year. This jump accounted for a 60 percent growth in meal kit users.

So who’s buying meal kits? In a blog post, Nielsen writes:

Overall, affluent consumers earning an income of more than $100k drove meal kit growth across online and in-store in 2018. Compared to 2017, these consumers increased their online meal kit purchases by 6 points and their in-store purchases by 9 points. Across both outlets, growth is also being led by consumers between the ages of 35-44, who showed a 4.3 point increase in meal kit purchases online and a 9.2 point increase in those bought in-store. Meanwhile, meal kit purchases from older consumers aged 45-54 declined 2.8 points online and 7 points in-store over the past year.

We are typically pretty bearish on the future of mail-order meal kits here at The Spoon. A lot of that sourness is driven by our own experiences with the product. Mail-order meal kits are expensive, they generate a lot of packaging waste, they are a lot of work to make, and because the ingredients are fresh, you pretty much have to make them as soon as they arrive (whether you still want that recipe or not) or else they spoil.

Meal kits in grocery stores, however, can still offer the same benefits of meal kits — pre-portioned fresh ingredients, introduction to new types of cuisine — but do it in a way that is more convenient and fits into a consumer’s existing daily flow.

And we’re really just at the beginning of what is possible for meal kits at retail as they only started rolling out last year. There is tons of head room for experimentation and innovation, whether that comes in the form of frozen foods, meal kits sold in new retail outlets like drug stores, offices, or even customized meal kits created in stores and brought out to you curbside so they can be made that night.

Wirecutter Picks its Best Mail Order Meal Kit

Whenever I need to buy something — well, anything really — the first place I turn is The Wirecutter. From big-screen TVs to blenders, I’ve never been disappointed by something the review site has recommended. So when The Wirecutter ran its meal kit recommendations today, I knew it would be worth reading.

And it was! The site only looked at mail-order meal kits, so nothing you can buy in the store (which is where most meal kits are headed), and they only considered more general meal kits (sorry, vegan-only meal kits). Having said that, it is still a thorough list that was tested over a period of four months, so they got a chance to try an assortment of menus.

What was interesting is that in general, The Wirecutter echoed many of the same concerns about meal kits that we’ve had here at The Spoon: they take a lot of work, they are expensive, and they use a lot of packaging. In their defense, The Wirecutter pointed out that meal kits can help you learn to cook and help you to climb out of your eating ruts.

So, with those caveats in mind, which meal kits made The Wirecutter’s Best Meal Kit Delivery Service? It’s not broken down in a strict first, second and third place, but Blue Apron, Martha & Marley Spoon, Plated and Sun Basket all earned a spot for various reasons.

In what is turning out to be a good week for Blue Apron, The Wirecutter found that it was the best meal kit for getting started. This follows the announcement from earlier this week that Jet.com will be selling Blue Apron’s kits for same day delivery in New York.

You should check out the full list to see why each one was picked. Do you have a favorite meal kit? Tell us which one(s) in the comments.

Plated and Albertsons go Nationwide as Meal Kits Move from Mailbox to Grocery Aisle

In 2007 a woman in Sweden launched the meal kit concept under the company name Middagsfrid, which roughly translates to “dinnertime bliss.” I don’t know how many working parents would classify any kind of cooking as “bliss” after a long day, but the basic sentiment worked in selling meal kits as a more convenient way to make dinner and even learn some new cooking techniques and recipes.

Trouble is, meal kits—particularly in the U.S.—haven’t exactly lived up to their original promise. As we’ve pointed out before, many have discovered along the way that “[Meal kits] 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.”

Around the time of Blue Apron’s grocery store announcement, the longtime U.S. leader in the meal kit sector had just seen its subscribers drop from 1 million in 2017 to 750,000 in February 2018, after laying off 6 percent of its staff just a few months earlier.

Blue Apron’s response was to head back to the place where we as consumers have been taught to shop: the grocery store. And now it seems going into grocers is all the rage in meal kit fashion. Chef’d and Walmart have done so, as has Weight Watchers and, now Plated has jumped aboard the in-store meal kit wagon.

Plated announced yesterday that it plans to have its meal kits in hundreds of Albertsons-owned grocery stores by the end of this year.

Albertsons acquired Plated last year, and according to the latter’s co-founder and CEO, Josh Hix, getting kits in stores was the point of the deal in the first place. “From day one, we wanted to use their stores and their assets to build this omnichannel experience.”

Right now the kits are available in 40 stores—20 in Northern California Safeway stores and 20 in Jewel-Osco stores in Chicago. In addition to the planned nationwide expansion, the kits will also be available for on-demand delivery through Instacart. The available range of kits in stores is less expansive than Plated’s online choices, though that’ll probably change if the idea is a hit.

Hix noted in a press release that, “This is the next big step in our journey to enable everyone to enjoy fresh, delicious meals.” It’s unclear if that step was always in the works or if it’s just a a nice way of saying, “We’ve had to pivot and try something new.” Not that it matters. With in-store sales of meal kits reaching $154.6 million in sales over the last year, according to recent numbers, it seems that those who want to stay in the meal kit game need to rethink the merits offering just subscription-based packages.

Whether going from the mailbox to the center of the grocery store is the answer remains to be seen. There are definitely some pluses: no commitment beyond the first purchase and freedom to choose on impulse, to name just a couple.

But if the original goal of the meal kit was to provide an enjoyable — dare I say blissful —experience in the kitchen, I’d say the eventual winners will be those brands who can tailor those original sentiments to the needs of today’s consumers. Whether that means through the mail or in the store may not even matter in the end.

Do you think the in-store meal kit will thrive, or is the whole concept one big dud? Feel free to share your thought sin the comments.