5 ms·

This is just the start. Eventually all supermarket companies will buy a meal kit company.

gscott 9y ago
Maybe a high percentage of young people go into a supermarket and are overwhelmed. Supermarkets need employees to tell people what can be done with the food they find on the shelves to remain relevant and buying a pre-packaged fresh mailed to you food company is trying to fix a symptom of that actual problem.
- milesokeefe 9y ago
  Regardless of feeling overwhelmed, the convenience of picking up one meal kit box vs knowing what ingredients to get, finding them, getting the right amount (often the minimum is far too much for the meal), etc. is huge. AFAIK a lot of the margins for online meal kit companies is the shipping+packaging cost. Grocery stores don't have to pay for shipping to the customer and can keep the boxes refrigerated which would make the packaging much smaller and cheaper.
  - hkmurakami 9y ago
    I've used a meal kit once or twice. I cook multiple meals for myself a day. But even for me, a person not in a meal kit business' target demographic, I can appreciate the value of not having to spend 10 minutes looking for the butter that was moved to some other location by the elves that run the Supermarkets.
    - amigoingtodie 9y ago
      Or buying four sticks of butter when all you need is a pat.
  - jsonne 9y ago
    Yeah so I'm working on a pickup meal kit company and that's true. Over half the cost of a meal kit is tied up in last mile logistics. I have yet to see a company not offer door to door delivery, but in my mind that's only 1 piece of the value prop. You can reach the middle market more effectively, while offering more options and customization, by simply having the customer pick it up at a much lower price point.
- nosuchthing 9y ago
  Recipes are everywhere though. Plated's market is probably for people who mostly want to save time, but don't want fast food or frozen meals.
  - amigoingtodie 9y ago
    And who can't get the same quality ingredients locally.
ethbro 9y ago
Curious what the value proposition would be. I mean, I can see delivery + pre-existing logistics network. Or selling better kits in stores. Or a segue to delivered groceries. But it seems kind of antithetical to how grocery stores make money. They're low margin, high volume businesses. And this directly attacks volume. Buying a grocery delivery startup seems like it would make way more sense as a first step.
- tyingq 9y ago
  >But it seems kind of antithetical to how grocery stores make money. It is, but they are probably looking at what Amazon has already done to brick and mortar. Then seeing the Whole Foods acquisition. And wondering where that progression ends. So, maybe this isn't the right direction, but staying put is arguably worse.
- Nition 9y ago
  One of the major national supermarkets here does delivery[1]. There's also a cheaper option where you can pick up but they do the shopping for you, so you can just stop by and get your cart. Both are actually a really nice service and good value for the time you save too, but I'm not sure how popular it actually is. You do miss out on being able to select your own fruit, meat etc, but they did a good job the couple of times we've tried it. Occasionally something you ordered isn't actually in stock, and you can choose whether you'll let them sub it out or just no include it. The ordering is per-supermarket to minimise that happening - every store has a slightly different online selection to match what they should actually have. There's no competition here either though. If there are any other grocery delivery options around, I haven't heard of them. [1] https://shop.countdown.co.nz https://shop.countdown.co.nz
  - toomanybeersies 9y ago
    New World is starting to roll out grocery delivery, they're trialing it in a couple of stores in Auckland.
    - deleted 9y ago
      [deleted]
tyingq 9y ago
I wonder if one might buy a national pizza delivery chain. Then you get an established driver network too.
- ThrustVectoring 9y ago
  Pizza delivery chains are largely operated as franchises, from what I remember. Buying Papa John's would get you the existing relationships with franchisees and the right to use the trademark. It wouldn't get you direct access to drivers - their paychecks are paid by entities like Rain City Pizza LLC.
  - tyingq 9y ago
    You can structure franchise agreements in a way that gives you control. There's some evidence pizza chains do that. http://www.bluemaumau.org/15086/jury_smacks_domino’s_death_suit_citing_its_“control”_franchise_contract http://www.bluemaumau.org/15086/jury_smacks_domino’s_death_s... Or they could just give franchise owners enough incentive to participate.
kalleboo 9y ago
In Sweden all the major supermarket chains already have their own meal kit services. They didn't have to buy anyone up they just started them in-house. I wonder what keeps US chains from innovating themselves?
- qq66 9y ago
  US grocery chains have no institutional expertise in building new offerings or generating demand for those offerings because the manufacturers do it for them. Manufacturers advertise the crap out of their products and rent shelf space from the grocery store to put them in front of consumers. Except for a few exceptions like Whole Foods, Wegmans, Market Basket, etc., grocery stores are pure logistics operations with no marketing capabilities.
  - KGIII 9y ago
    Can you elaborate on 'with no marketing capabilities' for me? My company started out modeling vehicular traffic and expanded into modeling pedestrian traffic. Large grocery store chains do a lot of research and marketing. The store layout is heavily modeled and optimized for marketing purposes. It was so heavily researched that we had a mock-up store for a lab and would research the way people would navigate and where they would spend their time. These days, they are probably doing real-time monitoring by cameras and tracking your mobile device as you traverse the floor. In my day, we simply would monitor video feeds and take notes of the behavior, often from recordings of real stores and real customers. I may not be understanding your use of the term marketing, however. From store brands to reputation management to ads and a Sunday flyer, it seems like marketing to me? It may well be that I'm misinterpreting something.
snarfy 9y ago
They might even take it one step further and hire staff to work at the back counter and sell it already cooked for you. /s

Maybe a high percentage of young people go into a supermarket and are overwhelmed. Supermarkets need employees to tell people what can be done with the food they find on the shelves to remain relevant and buying a pre-packaged fresh mailed to you food company is trying to fix a symptom of that actual problem.

milesokeefe 9y ago
Regardless of feeling overwhelmed, the convenience of picking up one meal kit box vs knowing what ingredients to get, finding them, getting the right amount (often the minimum is far too much for the meal), etc. is huge. AFAIK a lot of the margins for online meal kit companies is the shipping+packaging cost. Grocery stores don't have to pay for shipping to the customer and can keep the boxes refrigerated which would make the packaging much smaller and cheaper.
- hkmurakami 9y ago
  I've used a meal kit once or twice. I cook multiple meals for myself a day. But even for me, a person not in a meal kit business' target demographic, I can appreciate the value of not having to spend 10 minutes looking for the butter that was moved to some other location by the elves that run the Supermarkets.
  - amigoingtodie 9y ago
    Or buying four sticks of butter when all you need is a pat.
- jsonne 9y ago
  Yeah so I'm working on a pickup meal kit company and that's true. Over half the cost of a meal kit is tied up in last mile logistics. I have yet to see a company not offer door to door delivery, but in my mind that's only 1 piece of the value prop. You can reach the middle market more effectively, while offering more options and customization, by simply having the customer pick it up at a much lower price point.
nosuchthing 9y ago
Recipes are everywhere though. Plated's market is probably for people who mostly want to save time, but don't want fast food or frozen meals.
- amigoingtodie 9y ago
  And who can't get the same quality ingredients locally.

ethbro 9y ago

Curious what the value proposition would be. I mean, I can see delivery + pre-existing logistics network. Or selling better kits in stores. Or a segue to delivered groceries. But it seems kind of antithetical to how grocery stores make money. They're low margin, high volume businesses. And this directly attacks volume. Buying a grocery delivery startup seems like it would make way more sense as a first step.

tyingq 9y ago
>But it seems kind of antithetical to how grocery stores make money. It is, but they are probably looking at what Amazon has already done to brick and mortar. Then seeing the Whole Foods acquisition. And wondering where that progression ends. So, maybe this isn't the right direction, but staying put is arguably worse.
Nition 9y ago
One of the major national supermarkets here does delivery[1]. There's also a cheaper option where you can pick up but they do the shopping for you, so you can just stop by and get your cart. Both are actually a really nice service and good value for the time you save too, but I'm not sure how popular it actually is. You do miss out on being able to select your own fruit, meat etc, but they did a good job the couple of times we've tried it. Occasionally something you ordered isn't actually in stock, and you can choose whether you'll let them sub it out or just no include it. The ordering is per-supermarket to minimise that happening - every store has a slightly different online selection to match what they should actually have. There's no competition here either though. If there are any other grocery delivery options around, I haven't heard of them. [1] https://shop.countdown.co.nz https://shop.countdown.co.nz
- toomanybeersies 9y ago
  New World is starting to roll out grocery delivery, they're trialing it in a couple of stores in Auckland.
  - deleted 9y ago
    [deleted]

tyingq 9y ago

I wonder if one might buy a national pizza delivery chain. Then you get an established driver network too.

ThrustVectoring 9y ago
Pizza delivery chains are largely operated as franchises, from what I remember. Buying Papa John's would get you the existing relationships with franchisees and the right to use the trademark. It wouldn't get you direct access to drivers - their paychecks are paid by entities like Rain City Pizza LLC.
- tyingq 9y ago
  You can structure franchise agreements in a way that gives you control. There's some evidence pizza chains do that. http://www.bluemaumau.org/15086/jury_smacks_domino’s_death_suit_citing_its_“control”_franchise_contract http://www.bluemaumau.org/15086/jury_smacks_domino’s_death_s... Or they could just give franchise owners enough incentive to participate.

kalleboo 9y ago

In Sweden all the major supermarket chains already have their own meal kit services. They didn't have to buy anyone up they just started them in-house. I wonder what keeps US chains from innovating themselves?

qq66 9y ago
US grocery chains have no institutional expertise in building new offerings or generating demand for those offerings because the manufacturers do it for them. Manufacturers advertise the crap out of their products and rent shelf space from the grocery store to put them in front of consumers. Except for a few exceptions like Whole Foods, Wegmans, Market Basket, etc., grocery stores are pure logistics operations with no marketing capabilities.
- KGIII 9y ago
  Can you elaborate on 'with no marketing capabilities' for me? My company started out modeling vehicular traffic and expanded into modeling pedestrian traffic. Large grocery store chains do a lot of research and marketing. The store layout is heavily modeled and optimized for marketing purposes. It was so heavily researched that we had a mock-up store for a lab and would research the way people would navigate and where they would spend their time. These days, they are probably doing real-time monitoring by cameras and tracking your mobile device as you traverse the floor. In my day, we simply would monitor video feeds and take notes of the behavior, often from recordings of real stores and real customers. I may not be understanding your use of the term marketing, however. From store brands to reputation management to ads and a Sunday flyer, it seems like marketing to me? It may well be that I'm misinterpreting something.

snarfy 9y ago

They might even take it one step further and hire staff to work at the back counter and sell it already cooked for you. /s