Albertsons merges meal kits into the business

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Albertsons merges meal kits into the business

08/24/2018
The recent demise of the Chef’d stand-alone meal kit company illustrates the challenges this segment of the food-delivery market faces.

“The problem that stand-alone meal kit companies always have is that it’s difficult to find the people that just want the subscription,” said Josh Hix, co-founder and CEO of Plated, the meal kit company Albertsons acquired last year. “A lot of people try it, realize it’s not for them, and then quit the service.”

Hix, who spoke with Drug Store News before the announcement that Chef’d was folding its business, said these companies end up spending a lot in marketing to reach a relatively small percentage of the population. That’s one of the reasons he teamed up with Albertsons — to reach that company’s broad base of customers across the United States.

“We are excited to have a partner with such a large retail reach,” he said. “Their customers love their stores, they are familiar with the brand and they are there looking for food — and a lot of the time, that’s dinner. Having our meal kits in their stores is a big value creator for all of us.”
He said some already are blending their purchases of meal kits between the Plated subscription service, ordering the meal kits through Instacart and buying them in the stores.

“We’ll develop new offerings over time to continue to meet their needs in a better way,” Hix said. “We have always thought of ourselves as a perishable food-supply chain. We have only served one need for the customers for the first five years of our business, and that was a roughly 30-minute weekday meal experience,” he said. “But the capabilities that we’ve built around sourcing and portioning, around culinary and curation, and understanding what people like, new recipes that will appeal to them — all of that works for breakfast and lunch and dinner parties and kids’ meals, and snacks and wine pairings.”

In conclusion, Hix said, “There are a lot of different needs and use cases for customers to go solve. Now which of those we’ll do next, we’re not ready to talk about, but certainly there will be evolution. Where we are now is the very early days.”