Looking at the future of food purchases, Walmart is making moves in the digital selling battle with Amazon and Whole foods. The business relationship between the largest selling retailer- Walmart and San Francisco based Gobble was inspired by Amazon’s acquisition of Whole foods in June 2018, encouraging the brand to improve its digital offerings to the customers.
The meal kits offer quick meals that can be prepared in less than 15 minutes in a single pan. “These delicious meals offer an easy & fresh dinner option to the best or worst of the cooks for any time of the day or week,” stated Tyler Lehr, Senior Vice President and General Merchandise Manager of deli services for Walmart U.S. The kits are ideal for two people and sell from $8 to $15, depending on the item. These can be picked up from the online grocery pickup service or in the Walmart store.
Walmart has been previously selling one-step meals and meal kits in more than 250 of its brick-and-mortar stores and now plans to bring Gobble meals to around 2000 of its location stores by the end of 2018, reported CNBC. Unlike competitors of meal kit delivery services like Hello Fresh and Blue Apron, Walmart is not making its customers purchase any subscription. Previously, Walmart has offered its customers varied kit options like Takeout Kit, Sun Basket, and Home Chef, enabling customers to try out the meals before subscribing.
According to Earnest Research, the overall U.S. meal-kit sales shot by 40.7% last year. Gobble founder Ooshma Garg told, ‘Our meal plan seeks to serve busy parents and audiences who look forward to quick preparation time for meals. Approximately half of our customer base lies between the ages of 35 and 44 years old.’
According to reports, the meal-kit market has crossed the $2 billion mark making sense for every big player in the market to get into the act. A Walmart corporate spokesman told Fortune in an email statement confirming the partnership, ‘We continuously strive to find new options for offering our customers despite 75 million items lying in our inventory. This includes specialty food options like farm fresh crates, meal kits by Gobble and convenient snack boxes for quick meal requirements.’
In the meal kit industry, companies have been trying to discover a convenient spot, variety, and consistency with the meal options. It is difficult to churn out profits and hence Gobble is no exception. Fortune estimates Gobble made an annual revenue between $25 million to $50 million last year, but the company has not yet made any profits.
Khosla Ventures, Andreessen Horowitz, and Trinity Ventures are some of Gobble’s investors. The company was first backed in 2012 by Reddit founder and Angel investor, Alexis Ohanian. ‘ The firm and our initialized capital were attracted to the vision of its founder and the quality of the product. This was before meal kits were on the market, but Garg still thought about the business intelligently. Walmart is surely a proof of his vision paying off.’
Ohanian strongly believes this to be a great opportunity for Walmart and has faith in Garg’s methodical approach and engineering background that are sure to pay off in the long term. A clear battle is being waged between the largest retailer and the largest e-commerce company in the world.
‘This is surely a business game-changing alliance for Gobble with Walmart – world’s largest retailer. It enables our customer reach to gain miles of visibility very quickly. Private companies striving to enter the same space show up to 70% of their sales coming in from Walmart’, says Garg.