That’s right legacy grocery stores have been hammering legacy food manufacturing companies for an answer to the undercurrent of market share capitulation to Heat-N-Eat fresh prepared meal kits that keep the consumer out of the grocery store. Once again legacy retailers simply don’t want to evolve they want the customer to come back and just do what they always have. Hint: that’s not happening.
Now Campbell Soup, Hershey, and Tyson are eager try and maintain the status quo for the legacy retailers the ilk of Walmart, Marsh, Publix, Kroger, and Albertsons. They are going to put dinner in a box that can be put on a shelf. Now I ask regular readers of this blog, who well do you think that will work?
The first problem is Tyson Foods Campbell Soup and Hershey are working with online couriers to challenge meal-kit companies that ship parcels of ingredients and recipes to consumers looking for an easier way to cook stir-fry or enchiladas at home. That’s right direct to consumer. Direct to consumer does not help legacy grocery store a bit.
Once again Plated, Blue Apron and HelloFresh, which source some ingredients directly from local farms and sell proportioned fresh food. Have the advantage as consumers want fresh according to Foodservice Solutions® Grocerant Guru® Steven Johnson.
The cost of fresh is nearly twice that of a CPG meal. NPD Group found that the cost of a fresh meal kit is about $10 on average, while many consumers make dinner for an average of $4 a person. However consumers like the fact there is little or no wasted food and that the step by step instructions allow them to cook a ‘restaurant’ quality meal at home according to our Grocerant Guru®.
Cheryl Bersin, manager of emerging technologies and e-commerce at ConAgra FoodsSales at the grocery retailers that generate about 85% of ConAgra’s sales have declined for three consecutive years.…“We don’t want meal kits to continue to cut into sales,”
A Technomic study this year “showed 54% of consumers inclined to try meal kits anticipated they would cut back on grocery-store spending.” Foodservice Solutions® team said the same thing in 2015.Let’s look at some examples of how yesterday’s CPG leaders are stumbling with today’s playing field:
1. Chef Boyardee joined with Ahold USA’s online retailer Peapod to sell kits for Buffalo chicken quinoa and zucchini noodle primavera. Both incorporate products such as Hunt’s canned tomatoes that ConAgra normally sells at grocery stores.
2. Hershey, with startup Chef’d, in September launched dessert kits on Facebook Live, where some food-preparation videos have attracted millions of views. In a Hershey video, viewed roughly 850 times, executives are shown unpacking chocolate chips, flour satchels and vanilla vials from an orange Chef’d box to bake cookies.
3. Tyson Foods launched kits through Amazon Fresh in September, working its chicken and beef into tacos, stews and roasts. Tyson sells a separate line of kits at some grocery and convenience stores.
Fresh is fast and growing companies the ilk of HelloFresh, Plated, Blue Apron, and Munchery didn’t exist six years ago. Now, more than 150 companies compete in the $1.5 billion U.S. market, says research firm Packaged Facts. Is your company Looking A Customer Ahead? Or are you looking for yesterdays customer today?
www.FoodserviceSolutions.us is the global leader in grocerant niche business development. We can help you identify, quantify and qualify additional food retail segment opportunities. Has your company had a Grocerant ScoreCard completed? Want one? Call 253-759-7869 Email: Steve@FoodserviceSolutions.us