Once Known to Be A Fierce Competition to Grocery Stores, Are Meal Kits Still A Threat?  

Once Known to Be A Fierce Competition to Grocery Stores, Are Meal Kits Still A Threat?  

Meal kit subscriptions were a fad that ruled the early 2010’s and until recently considered fierce rivals of grocery store retailers. Young entrepreneurs jumped on the opportunity when they realized that the majority of the masses wanted to stay fit and eat healthy, but most of them didn’t have the time or expertise to do so. With customers demanding portion-controlled meals and nutrition-rich diet, meal kits swooped in to save the day. Chefs would whip up meal kits, which would then be packed into microwavable containers and then refrigerated to stay as fresh as possible.

The sales weren’t bad either. Texas-based meal kit provider Snap Kitchen was selling around 30,000 meal kits a day. Meal kits seemed like the idea of a century. But then, everything has its time. And it’s safe to assume, the ‘fad’ of meal kits has gradually ‘faded’! For instance, Simply Fit meal, a company based in Dallas, TX made a gross mistake of over expanding and paid for it by going out of business in May. My Fit Foods, which at one time had more than 80 stores in 5 states, has also closed their doors to the public.

So, what’s going wrong here?

According to David Bishop a partner of a consulting firm, Bricks, and Clicks, “Grocery stores already have the customer’s trust and are already in the market.” According to Bishop, if things keep going the way they are, there is a fair chance that grocery stores will end up buying meal kit companies.

Another predicament these companies face is lack of investment. The only choice left is to form partnerships with grocery giants. An industry analyst at NPD group, Darren Seifer gave an interesting observation. He said, “It’s all about gaining market share, and there’s no emphasis on profit. That’s where we are now. These companies are going out of business or selling out, not because of demand, but maybe they aren’t structured right.” Looks like the companies need some drastic restructuring owing to its recent setbacks.

There is a silver lining though. More than ¼th of the U.S. households are unitary, i.e. have only one person v/s the 13% back in the 60’s. The graphs and data clearly are in their favor and all they have to do is capitalize on it.

Grocery stores are in the aggressive mode as well. Availability of grab-and-go meals at these ‘around-the-corner’ stores is an evident inculcation of consumer-demand by these retailers. However, big names such as Snap Kitchen don’t plan on giving up so soon and instead want to adopt a different strategy this time. Snap kitchen closed all of its 5 stores in Chicago and said that they will be expanding slowly and only on demand.

As John Carter, the Chief Digital and technology officer of Snap Kitchen sums up nicely, “We learned a lesson in Chicago that we needed to learn to crawl well before we walked.”