This is part of Supermarket News’ 2017 Disruptors package. See the entire lineup here.
Subscription-based meal kit purveyors have carved out a new niche in the food delivery environment, but they may not be able to reach their full potential on their own.
Two of the largest players in the space, Blue Apron and HelloFresh, have been reporting losses as they invest heavily to find and retain customers and ramp up their distribution capacity.
At Plated, another of the largest players, those hurdles suddenly got a whole lot easier to overcome when the company was acquired by Albertsons earlier this year.
Joshua Hix (pictured above), CEO of Plated and one of its two co-founders, along with Nick Tatanto, said the meal kit company had long envisioned some sort of retail partnership.
Albertsons “recognized they needed technology in the online channel, and we certainly recognized we needed a retail partnership and more access,” he told SN. “So it’s a good marriage, and I think all of the recent movement in the market has created an elevated sense that these sort of alignments are necessary.”
The move will allow Plated to offer its meal kits throughout Albertsons’ 2,328-store network and give the retailer an established meal kit product to offer through its growing refrigerated home-delivery service as well.
The first in-store Plated meal kits were slated to hit stores in the fall. In addition to giving Albertsons another meal-solutions option for its customers, Plated also comes with its own e-commerce technology and a database of customer ordering history that Albertsons can leverage.
“Grocers are acquiring the technology and the skill sets of people like Nick and Josh,” said Kevin O’Leary, the “Shark Tank” judge who invested in Plated after its founders pitched the company on that TV show, in an interview on CNBC.
Hix, with a bachelor’s degree in electrical engineering and a Harvard MBA, previously had launched other technology startups and also worked in finance. He and Taranto met while doing volunteer work in Haiti.
The meal kit model addresses some key consumer needs in terms of meal preparation and simplifying the cooking process. By delivering pre-portioned ingredients and recipes, meal kits remove the need for consumers to come up with ideas for dinner and shop for ingredients.
O’Leary said he believes meal kits will “definitely be a big part of how people will buy their groceries in perpetuity.”
Bill Bishop, chief architect at consulting firm Brick Meet Click, said it will be important for retailers to offer variety and flexibility in their meal kit offerings to meet a range of consumer needs.
“Meal solutions are what customers are looking for, and meal kits are a subset of that,” he said.
