Walmart to launch meal kits
How the major retailer’s entrance into the category will affect this rapidly growing food and beverage business sector.
Walmart Inc. says it will launch meal kits at more than 2,000 of its stores. This is coming at a time when both the in-store meal-kit business and the meal-kit category are expanding at a double-digit rate.
Nielsen data shows that in-store meal kit sales grew 26.5 percent in the past year to $154.6 million. Overall, 9 percent of consumers, about 10.5 million households, have purchased a meal kit either online or in-store over the past six months. A quarter told Nielsen they would consider purchasing one in the next six months, the equivalent of 30.1 million households.
To get more details on why meal kits are on the rise and how Walmart will impact the market, FE talked to Forrest Collier, CEO of meal kit provider eMeals, to discuss.
FE: The meal kit business has been rapidly growing in the last few years. Can you discuss why that is?
Collier: The idea of meal kits has grown rapidly because consumers are desperate for convenience related to the inspiration, shopping and cooking of healthy dinners at home. eMeals provides the same kind of convenience as traditional meal kits, but with over 10 times the variety at half the food cost per serving. We publish new recipe ideas each week across 15 different food style plans such as Paleo, Clean Eating, Low Carb, Vegan and Gluten Free. Instead of recreating the grocery supply chain, eMeals has integrated our grocery list with pickup and delivery partners including Walmart, Kroger, Instacart and AmazonFresh. eMeals customers are able to enjoy affordable recipes that fit their specific goals with groceries from their preferred local grocery store.
FE: What does this signal to the industry that Wal-Mart is getting in the meal kit business? Do you think this is going to shift the meal kit business from online into groceries stores, or will the two offerings co-exist?
Collier: Walmart’s entrance into meal kits as well as Albertson’s acquisition of Plated is further evidence of the importance of convenience and flexibility to shoppers. Today’s consumer wants what they want, when they want it. Having in-store availability of meal kits is an additional option for the last-minute shopper and therefore a natural offering for grocery chains. By partnering with eMeals, a grocery chain is also able to provide a much wider level of recipe inspiration tied to its full product line which provides consumers a new level of variety, flexibility and affordability.
FE: What is the future of meal kits? Do you think they are here to stay or will they transform into something else?
Collier: People are busier than ever – whether they are single or married, urban or suburban, working inside or outside the home – so the demand for convenience solutions will only grow. The broader meal kit category is projected to be a $10 billion business within the next five years, but this will include traditional pre-portioned meal kits along with meal kit alternatives like eMeals that are able to leverage the existing grocery ecosystem to help people cook healthy home cooked meals at half the cost.
FE: How do you think advances in technology will affect the meal kit business?
Collier: Traditional meal kit providers will continue to leverage technology to improve everything from logistics to packaging. We’re already seeing advances in technology create opportunities for strategic partnerships between smart home-technology companies and grocery players like Walmart and Amazon. In order to tackle the issue of “last mile” delivery, the retailers are increasing their pickup services as well as going all the way to a consumer’s refrigerator. These integrated partnerships will continue to grow as a way to increase delivery convenience and decrease spoilage and theft of unattended deliveries.