Tuesday, August 15, 2017

Should Legacy Grocery Stores be Selling Meal Kits?

What business are legacy grocery stores in?  Are they in the ‘fill the pantry’ business?  Are they in the produce business? Are they in the fresh meat and seafood business? Are they bakeries? Are they in the grocerant niche fresh prepared food business?  We were asked last week if legacy grocery stores should be in the Meal Kit business.  So here is the team at Tacoma, WA based Foodservice Solutions® thinking.

The simple and universal answer from the team at Foodservice Solutions® was yes they should be in the meal kit business.  After all the meal kit business today represents only $1.5 billion in food sales while the legacy grocery store business is close to $800 billion in sales today.  Our good friend Bill Bishop Chief Architect at Brick Meets Click says $1.5 billion in the grocery world is like a minnow in the ocean. 

Kroger’s Main and Vine brand began experimenting with meal kits when it opened and continues to experiment, with pricing, packaging, and portion size.  At as we write this it is our belief that that particular teat brand store continues to do so.  From what they have learned they are now testing meal kits in four Cincinnati legacy Kroger units.
When we went a took a look we may have had more questions than answers.  Like does copycat positioning work better than differentiation with a twist?  We think Kroger believes that copycat positioning is best as their meal kits in the Cincinnati test are just like Home Chef,  Plated, HelloFresh, and other filled with premeasured ingredients, cooking instructions.

Our team at Foodservice Solutions® thinks Kroger could have done much better than copycat positioning.  Having conducted over 8,111 Grocerant ScoreCards our team understands with value attributes resonate with consumers in meal kits, and most all fresh prepared Ready-2-Eat and Heat-n-Eat food. 

While grocery stores can sell meal kits for less, cheaper is not always the best option according to our own Grocerant Guru®, Steven Johnson just because they do not have to pay for packaging and delivering products.  The problem is our Grocerant ScoreCards point out Price is not the issue.  
Food industry research icon and our friend Bonnie Riggs notes that a meal made from a kit costs $10 per person, while a meal from a grocery store cost of an average $ 4.  Thinking about grocery stores what business are they in? Meal Solutions, Menu Solutions, Cooking instructions, or are they in the copycat food business?
Retail food customers today can obtain fresh prepared meals, meal components, cook from scratch ingredients all of which can be mixed and match then bundled into a perfect customized family meal without going to a grocery store.  Consumers can by the fresh prepared components from Pinkies Liquor stores, furniture stores IKEA, clothing stores Ralph Lauren, club stores like Costco, Dollar store, Walgreens, and even restaurants the ilk of Corner Bakery, and Boston Market. Why buy from a copycat grocery store?  Not to worry the team at Foodservice Solutions® knows why a meal kit would sell if done right. Call us.

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869

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