Ahold Delhaize USA supermarkets will be the retail launching pad for meal kit provider HelloFresh.
This month, 581 Stop & Shop and Giant Food (Landover) stores in the Northeast and Mid-Atlantic are slated to begin selling the meal kits, with more retail distribution to come, New York-based HelloFresh said Monday.
The initial retail offerings include five meal kits: peppercorn steak, Mediterranean-style chicken, homestyle meatloaf, chickpea couscous and paprika chicken. Priced at $14.99 to $19.99, each kit serves two people and takes less than 30 minutes to cook.
HelloFresh noted that it designed packaging for the retail kits to optimize display space and help stores drive profit margins. And on the back end, the company said it expanded its distribution network from five to 11 facilities to rein in travel time and uphold ingredient quality for stores.
“Grocers needed to profitably replace underperforming or low-margin product categories and meet their customer demands for chef-curated, fresh and convenient meals,” Tobias Hartmann, North America president for HelloFresh, said in a statement. "Our retail line reduces the pressure on grocers to create these meals themselves and easily integrates into growing areas of their business such as online grocery and delivery.”
HelloFresh plans to roll out its meal kits to more retailers throughout the year, an effort that the company said includes “revitalizing the grab-and-go aisles for smaller-format retail chains.”
The retail meal kit offering has been two years in the making, according to HelloFresh. The company said it partnered with retailers on global pilots to optimize the in-store product for taste, freshness and convenience. In addition, the meal kit varieties being sold at stores reflect insights that HelloFresh collects weekly from the more than 60,000 U.S. customer data points in its online business.
"How we’ve been embraced by retail brands shows the quality product line HelloFresh has brought to market,” Hartmann added. “The addition of retail — a channel well-placed to benefit from the unique data, brand and infrastructure assets we have built out over the years — allows us to better address the everyday needs for even more customers, adding what we view as a highly complementary customer segment.”
The retail foray comes on the heels of HelloFresh’s acquisition of meal kit provider Green Chef, announced in March. Boulder, Colo.-based Green Chef offers meals that contain USDA-certified organic ingredients and address dietary plans like Paleo and Keto, as well as allergen challenges with gluten-free plans.
Overall, HelloFresh has 1.2 million active U.S. customers, and the company delivered 26.5 million meals during the first quarter of 2018.
The timing for expansion into retail may be critical, at least according to one analyst. "Today's consumers expect value above all else from their favorite brands, and right now, meal kits are struggling to meet these expectations," observed Andrew Park, VP of CX strategy at InMoment. According to data from InMoment’s 2018 CX trends report, only 10% of U.S. consumers find prepared cooking solutions highly valuable. "In what perhaps may be a last-ditch effort to remain relevant," Park added, "HelloFresh would be smart to engage in always-on conversations with their customers as it expands into the grocery sector. By actively listening to its customers about their preferences, especially around subscriptions vs. in-store pickup, HelloFresh can better gauge if its customers are seeing real value in this new option."