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The meal kit industry has hit an impressive $5 billion dollars in sales, according to a recent report put out by Packaged Facts, a leading publisher of market research in the food and beverage, consumer packaged goods, pet products and services, financial services and demographic sectors. “Meal kit delivery services are a specialized sector but widely disruptive force in the food industry. This space is the most striking example of the movement toward greater convenience in getting fresh foods to the consumer,” stated David Sprinkle, research director for Packaged Facts. “New approaches to fresh food groceries are what consumers are most interested in, and are what will determine the winners and losers of the current food industry re-set.”

The June 2017 consumer survey data presented in the report states that while no one provider dominates the market, grocery stores are the most common sellers of fresh meal kits. Despite a less-than-stellar IPO, Blue Apron leads the charge among the delivery sector with Freshology, Green Chef, HelloFresh, and Home Bistro rounding out the top five. One meal kit company to keep an eye on is Chef’d. One of the things that stands out with this meal kit company is that there is no subscription required. Another point of differentiation is not only the variety of choices but also the option to select meals curated by different celebrity chefs. Although not a new company (it launched in April 2015), it has recently raised $35.2 million in funding from some well-known industry players:  manufacturers Smithfield Foods ($25 million) and Campbell Soup Company ($10 million) and online grocer FreshDirect ($200,000). Campbell’s Soup Company’s CEO Denise Morrison said, “The goal here is to make bold moves and do so at a rapid pace. It’s the early days for grocery commerce, but we see a larger opportunity to generate more top line growth for Campbell by accelerating our digital marketing and e-commerce efforts – but we must be bold in our strategy and choices and we must move fast.” Coca-Cola is drinking the Chef’d Kool-Aid as well – the global beverage company has partnered up with them by co-branding some of the company’s meal kits in order to offer food and drink pairings from their portfolio of beverages. By investing or/and collaborating in this different channel, not does it allow Campbell’s, Smithfield, Coca-Cola and Fresh Direct an additional platform to sell their products, but it gives them insight into the shopping patterns of the customers of Chef’d and possibly e-retail grocery shoppers as a whole. Even Amazon is getting into the game. A trademark filing dated July 6 shows the mega retailer of all things big and small is working on a delivery meal kit of its own that will have the tagline, “We do the Prep. You be the chef.” The service is described as “prepared food kits composed of meat, poultry, fish, seafood, fruit and/or vegetables and also including sauces or seasonings, ready for cooking and assembly as a meal; Frozen, prepared, and packaged meals consisting of meat, poultry, fish, seafood, fruit and/or vegetables; fruit salads and vegetable salads; soups and preparations for making soups.” Amazon’s acquisition of Whole Foods should not only solidify Amazon’s foray into the meal kit industry, but almost ensures that they will dominate it as well since they will have the platform to cover both the bricks-and-mortar and the delivery aspects of the industry. Well played, Amazon.

In other Amazon news (because isn’t there always something?), the e-commerce giant has launched a new feature on its mobile app called “Spark,” an Instagram-like shoppable, scrollable feed that features photos with captions uploaded by “enthusiasts” (Amazon’s name for contributors to it). It also offers inspiration à la Pinterest. It’s a no brainer as to why Amazon has launched this – it engages the customer both socially and visually and makes it easy for them to make purchases from Amazon by taking the middle man out. If a customer likes something they see, they can go directly to that product or a similar one on their ecommerce site without having to do their own research and without having to leave the world of Amazon. It’s only available on iOS mobile devices, so Android users are out of luck. However, the company is currently working on a solution to that, so soon they will be one step closer to their ultimate goal of world domination.

While many companies are looking at digital ways to create exposure, there are some that are trying to do so the old-fashioned way – through face-to-face interactions. Taking a page from the restaurant industry where pop-up restaurants have become the fad du jour, CPG companies such as Chobhani, Kellogg and Pure Leaf are doing pop-up stores to tell their brands’ stories. Not only does it put the spotlight on their products alone (which can be difficult to do in the traditional grocery store setting) but it can also create an experience for the customer by showing the essence of the brand, which can be difficult to do digitally. The digital aspect it still important, however, with these CPG companies encouraging photos and shares of the experience over social media. According to Zel Bianco, president and founder of Interactive Edge (a software company that provides data analysis for category managers that helps them deliver targeted shopper insight data in presentation format to the store buyer), “A pop-up store allows the brand to shine and promote its best qualities without the competition breathing down its neck.”  It’s just another way for established CPG brands to keep their products fresh in the minds of consumers and to show that there is a story and dimension to them, which is something for which Millennials and Gen Z shoppers in particular show a fondness. Expect to see more CPG companies following suit to promote their product lines, especially since more and more retailers work to spotlight their own private label brands in-stores and at their events.

Speaking of private labeling, Giant/Landover recently announced the launch of a new private brand – their “No Antibiotics Ever” line of pork products. All products in the line not only contain zero antibiotics, but there are also no added hormones and it’s 100 percent vegetarian fed. “Giant Food is excited to continue developing products that taste great, are in step with consumer trends and offer customers our own line of Giant Private Brand ‘No Antibiotics Ever’ pork selections,” stated Gordon Reid, president of the Landover, MD based division of Ahold USA. “With this addition, we further promote our commitment to providing customers with the highest quality fresh pork products that allow them to eat well while saving money.” The line consists of the following select pork cuts: bone-in chops, boneless chops and boneless sirloin chops.

With the summer season soon coming to an end, it’s time for many families to start preparing for the start of a new school year. Safeway Eastern is trying to help parents make the transition with the launch of their its “School Spirit” campaign, which runs the entire month of August. In its 122 stores, the retailer is raising money for schools in each store’s local community. Customers are encouraged to make donations at checkout to fund school programs and supplies. Safeway Eastern also partnered up with D.C. United, the United Way, and WJLA-TV to host a “Stuff the Bus” event at their 415 14th Street SE location in Washington, DC where the public was asked to drop off backpacks and school supplies (including pens, pencils, paper, crayons, highlighters, erasers, glue sticks and flash drives). D.C. United players and personalities from ABC7 were also on hand to collect school supplies and monetary donations during the day-long event.

Finally, I would like to congratulate Bob Gleeson and the team at Shoppers Food & Pharmacy for the grand reopening of the Shoppers Market in the Potomac Yard Shopping Center in Alexandra, VA. The attention put into the ornamental details alone (most notably the understated but elegant light fixtures, white marble counter space and the white subway tiled walls in the prepared foods section) are reason enough to visit the newly revamped space. Even the unique shelving in the produce section contributes to the aesthetics of it. Add in some high quality ready-to-eat options, a wonderful selection of fresh meats and seafood, beautiful and fresh produce displays, and ready-to-cook meal choices (including complete meals prepped in steamer bags which I think are a healthier, fresher alternative to frozen entrees and dinners) and I think the transformation is noteworthy.  I hope to see more of this refreshed, industrial chic look in other Shoppers units in the near future!

 

Until next month…

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