How Purple Carrot Tries to Increase Choices Without Upping Costs

July 30, 2018

By Amanda Weston

Andy Levitt, founder and CEO of meal-kit service Purple Carrot, knows the challenges of attracting customers in such a competitive market.

And to take on rivals like HelloFresh, Plated, and Blue Apron, his company just announced a series of new meal categories for its 100-percent plant-based offerings

"We've gone from literally one choice every week to 35 different choices," said Levitt on Cheddar Monday.

According to data firm NPD, four out of five meals in the U.S. are prepared at home, so it follows that meal-kit purchasesーostensibly designed to make the whole process easierーare on the rise. Since 2015, spending on these services has grown three times as fast as restaurant and grocery store spending.

The opportunity, though, has also created a lot of competition, which in turn has put pressure on the stand-alone companies. Blue Apron, the only pure-play whose stock trades publicly in the U.S., has seen its share price drop by 75 percent since its IPO a year ago.

Traditional grocers are trying to cash in as wellーin the past year, Kroger bought Home Chef and Albertsons acquired Plated.

But getting into physical stores may not be the answerーtwo years ago, Purple Carrot was the first meal-kit company to partner with Whole Foods, now owned by Amazon. Levitt said the trial ended after about five months, because the market wasn't quite ready for it yet.

"I don't think customers were expecting to go to the grocery story and find a meal-kit, I don't think grocers quite knew how to market that to their customers," he said. "The margins and the supply chain complexity may not be there just yet for customers to go to those stores, pull through the product in high enough frequency to have it make the most sense."

Offering more variety in meal plans, of course, adds to those complexities. But Levitt said he remains committed to keeping prices down.

"It's certainly a complex operation, but we've got a great team in place, and we've kept the cost exactly the same for customers even though they now have an incredible amount of choices every single week."

Among Purple Carrot's new plans are "Quick & Easy," "Chef's Choice," and "High Protein." The meals cost about $12 a plate, or $72 a week.

For full interview, click here.

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