Why Brick and Mortar Is Key for Meal Kits

April 13, 2018

When you’re hungry for dinner and can’t decide between delivery, take-out, or cooking at home, the grocery chain Albertsons hopes you’ll choose a Plated meal kit from one of their stores that combines elements of all three.

The do-it-yourself food prep packages are available at hundreds of Albertsons stores across the country, Plated CEO and co-founder Josh Hix said. They give busy people who don’t want to commit to a meal subscription service a one-off option.

“We can’t profitably ship just one meal,” Hix said Friday in an interview on Cheddar. “They want to buy at the last minute, we can’t profitably ship at the last minute. So it’s really about serving lots and lots of different types of customers.”
Each meal kit costs around $16, said Hix. Consumers can order online and pick their meal kit up, or go to the store and buy them off the shelf.

Albertsons, which owns Safeway and ACME stores, acquired Plated last summer for $200 million. The purchase was designed to give the brick-and-mortar retailer an entry into the growing meal kit market.

The grocery chain Krogers announced recently that it will begin carrying meal kits in its stores, as will Walmart, which plans to have them in more than 2,000 stores by the end of the year. Blue Apron and Weight Watchers plan to sell kits at retailers too.

Amazon, which acquired Whole Foods last year, filed a patent for a new meal kit service to be sold in stores even though it already sells kits online.

“I think the retail presence is critical,” Hix said, noting that online doesn’t work for all customers.

“You end up with a lot of people that may try it and love the product but don’t love the purchasing model.”

For the full interview, click here.