Albertsons snaps up meal kit startup Plated
techcrunch.com
techcrunch.com
Then, there's lovely marketing synergy. On the one side, people going through the store looking for the stuff they need to cook for dinner, are going to see how "oh, I could have all this packaged up for me and sent to my door and I wouldn't have to futz with this list."
While on the other side, people who are stopping by the store to pick up their Plated box -- which they would be incented to do because the subscription price would be lower for that mode -- will take a few extra seconds to buy a bottle of wine or a dessert to go with it.
I wonder if more delivery systems might go this way, instead of partying with a bunch of restaurants that mostly can't support them because of their existing terrible margins. In a sense Amazon and Whole Foods are already there now, since Whole Foods has a huge line of prepared foods, pizzas, sandwiches, etc... and they already deliver. If they expanded that a little bit, use their own supply chains and produce, and essentially set up warehouses to prepare various kinds of meals to be rapidly delivered by Amazon. Basically everything they need is already there, it's just putting it together. How often would that kind of option win out over something relatively overpriced, and often potentially less healthy like Caviar, Dining In, or Dashed?
Of course, there are privacy concerns but I think we've established that people are quite willing to give up their privacy for a perceived benefit.
AFAIK a lot of the margins for online meal kit companies is the shipping+packaging cost. Grocery stores don't have to pay for shipping to the customer and can keep the boxes refrigerated which would make the packaging much smaller and cheaper.
Plated's market is probably for people who mostly want to save time, but don't want fast food or frozen meals.
But it seems kind of antithetical to how grocery stores make money. They're low margin, high volume businesses. And this directly attacks volume.
Buying a grocery delivery startup seems like it would make way more sense as a first step.
It is, but they are probably looking at what Amazon has already done to brick and mortar. Then seeing the Whole Foods acquisition. And wondering where that progression ends. So, maybe this isn't the right direction, but staying put is arguably worse.
You do miss out on being able to select your own fruit, meat etc, but they did a good job the couple of times we've tried it. Occasionally something you ordered isn't actually in stock, and you can choose whether you'll let them sub it out or just no include it. The ordering is per-supermarket to minimise that happening - every store has a slightly different online selection to match what they should actually have.
There's no competition here either though. If there are any other grocery delivery options around, I haven't heard of them.
I don't think I've ever lived further than a 15 minute walk from a supermarket.
At the time, there was no web interface and you had to make a phone call. Still, it was pretty common.
Curiously, when I was really young (1960s America), I remember a grocery store that delivered to our house. We even had a diaper delivery/disposal service, but I digress. I'm not sure if it was a local thing, nor am I sure when it stopped. I do know that it existed in two different localities, because we moved a lot. (Military family.) I'm pretty sure it wasn't always just a grocery list, but that they had meals that came with a recipe card and the ingredients. The recipe cards still existed when my mother passed away. I have no idea if they still exist. I suspect not.
So, at one point, it was at least in use and then fell out of fashion. Now, it's coming around again.
Anyhow, thanks for the info. It seems to be gaining in popularity. Maybe there's room for you to get in on the ground floor and make some money.
Not necessarily. The margin on meal kits are stronger than the ingredients alone (e.g. sliced fruits & veggies). In relation to the volume, meal kit buyers still need to eat. The hungry buyer must cook at home (w/ groceries), go to a restaurant, or buy a second meal kit. To me, this sounds like an attack on the fast food / restaurant industry. Grocery stores can market these meal kits as more affordable, healthier, and 'hip'.
I did a meal kit service for a little while, and my biggest complaint was that it was not any cheaper than if I were to go out to eat, but I still had to cook the meal and clean up afterwards. If there were a cost savings versus going to eat at a restaurant, I would have kept the subscription.
I had the same experience with Blue Apron, but I also live in Manhattan, where it's about 20-30% cheaper for a single person to get takeout/delivery than it is to buy groceries and cook - and that's before accounting for the cost of time.
Comparing the prices in the suburbs, though, that's not the case. And as soon as you add a second person (or more) to the mix, of course, it becomes cheaper to cook.
Depends on where you live. In New York, for example, it's incredibly easy to find good food for under $10, even for dinner.
I think "incredibly easy" is a gross exaggeration. I supposed you might be talking about the street carts, but street meat is questionably healthy / "good". The deeper you get into parts of Queens it's certainly possible, but I think the previous poster had in mind some sort of sit down establishment rather than street food.
Not sure where you get the idea that that's what I'm eating.
High-quality prepared food is pretty cheap in Manhattan, compared to the price of groceries and compared to the price in other places in the US. When you think about the underlying economics of it and the region, it's not surprising.
People are willing to pay a premium for convenience.
Not having to travel to the grocery store, not having to wait in line, not getting mad at the person who cannot bag your groceries, and not having to buy excess amounts of ingredients, nor measuring them, I consider valuable.
Also, Plated offers meals w/ ingredients that would take me a full day of travel to source.
If somebody is already willing to travel to the store, why would grocery delivery increase their existing customer spend?
Furthermore, we already have folks who are experts at that: we call them restaurants.
So I see meal prep from grocery stores (so losing the "secret organic small farm ingredients" sauce a lot of them bandy about) as being targeted at: (1) people who want a price point lower than restaurants, (2) are willing to pay more than grocery stores, (3) derive enough benefit from "cooking light" that they prefer meal kits over restaurants.
... That doesn't seem like a huge demographic. Which makes me think most of the meal companies are Uber-like unsustainable VC-propped up businesses, except without end-to-end automation on the horizon to save them.
With grocery delivery, the key would be regularizing logistics for some portion of their stock a la Amazon subscribe and save (and thereby optimizing inventory and saving on waste).
There's some evidence pizza chains do that. http://www.bluemaumau.org/15086/jury_smacks_domino’s_death_s...
Or they could just give franchise owners enough incentive to participate.
My company started out modeling vehicular traffic and expanded into modeling pedestrian traffic. Large grocery store chains do a lot of research and marketing. The store layout is heavily modeled and optimized for marketing purposes.
It was so heavily researched that we had a mock-up store for a lab and would research the way people would navigate and where they would spend their time. These days, they are probably doing real-time monitoring by cameras and tracking your mobile device as you traverse the floor. In my day, we simply would monitor video feeds and take notes of the behavior, often from recordings of real stores and real customers.
I may not be understanding your use of the term marketing, however. From store brands to reputation management to ads and a Sunday flyer, it seems like marketing to me? It may well be that I'm misinterpreting something.
I think the real question is whether there is enough volume at a given grocery store on meal kits that they can afford to hire a person who just spends their day assembling and stocking meal kits by the deli section, or if this load will get shifted to existing employees.
It will have the proper size, though.
The real value for me besides time saved (and the insane coupons/free meals) is using ingredients that I wouldn't have otherwise picked up. I'll just grab button mushrooms most of the time but getting some different variety is nice.
I also usually grab the store brand meat because its cheaper. It's not like the grass fed organic whatever isn't there, I just usually won't pick it up.
I use HelloFresh, HomeChef, and Plated.
if they were much cheaper, and give you more choice on what says its active, and faster activation turnaround (maybe at 3pm I decide if I want the dinner kit for tonight) then it might make more sense.
I do not buy the "young people don't know how to shop and need us" argument. sounds like a forced effort to get the word millennial in your message
As someone who likes to cook (and has test-driven 3 or 4 of these services), I don't see them as that at all. Blue Apron, et al are paint-by-number compared to actually cooking from a normal recipe where you have to measure and prep. I liked having them as an option, but they didn't scratch my "cooking" itch at all. They were more like a convenient way to put a decent, healthier dinner on the table in almost the same time you could do Hamburger Helper or some frozen bag meal.
I'm open to trying new things, and regularly do when I'm traveling, but at the end of the day I'm a midwestern, meat and potatoes type of person.
I've yet to see one of these services that would work for me without feeling like I'm wasting my money more often than not.
I'd LOVE to have a paint-by-number, better than hamburger helper, set of options I can pick up from the grocery store on the way home. Give me a rotating choice of two or three meal kits as a regularly stocked, non-subscription item, and I'd be thrilled. I'm sure there would be some I'd really enjoy, some I'd like to try, and others I'd avoid.