We live in a time where home delivery doesn’t just mean greasy pizza or chicken wings. Subscription delivery services like Blue Apron, which delivers meal kits, and Plated, which delivers freshly prepared meals, dominate this industry. They aim to make gourmet cooking fun, interactive, and convenient.
Gaining Traction, but with Pitfalls
These services have gained significant traction as the number of providers and subscribers has increased in recent years. However, these services come with a high cost and low convenience: A week of dinners from either service costs about $84 per person, which is more than half of what the average American spends on food each week. The recipes can also take a long time to prep, cook, and clean, making them impractical for everyday use.
Where CPG Steps In
Since CPG brands excel in these areas, they could partner with major retail stores to create more practical and customizable meal-kits. If Kraft partnered with Walmart, consumers could log onto the Kraft website or a Kraft app and order their meal kits based on attributes such as dietary needs, time limitations, and calorie count. Then, they can pick up their meal kits at Walmart or have Walmart deliver it to their doorstep.
A Win-Win for CPG Brands and Retailers
• Since these meals will most likely need to include non-CPG products, such as fruits and vegetables, this service would increase in-store purchases as well.
• Selling the kits in the form of pre-packaged bundles would free up valuable shelf space and create store loyalty.
• Where delivery is possible, retailers can charge a premium and acquire a new revenue stream.
• Retailers can advertise around related cooking/ingredient content to reach consumers in the right frame of mind.
• CPG brands can use social media to increase engagement among potential consumers. For example, Kraft can use Pinterest or Instagram, highly visual platforms, to display pictures of fully prepared meals and offer links to order the meal-kit service.
CPG brands can win against niche competitors by appealing to a broad audience, at an attractive price, and with strong partnerships. The question is, “who will step up to the plate?”
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