Meal-Kit Companies Are Gearing Up for Competition or Getting Out

On this episode of The Barron Report, Paul Barron interviews Brittain Ladd, a Supply Chain Management expert and Logistics Consultant for the world of meal kits.  

When the meal kit first came into existence, customers lined up to try this new and innovative system that fulfilled the desire for a high-quality meal without the restaurant price tag. Once the idea gained popularity, meal kit companies began popping up, claiming to have the best meal kit on the market. Slowly but surely, these companies starting shutting down as the market became oversaturated.

“The meal-kit industry is still the wild west. The industry is going through a lot of growing pains...,” says Brittain Ladd.

He believes one of the main reason these companies are unable to stay afloat is they just don’t have enough capital to keep going. One of the biggest challenges for the meal kit is the delivery model and its cost. Known in the restaurant industry as  “the last mile,” these start-ups are struggling to find a location that puts them close enough to a customer in order to keep costs down.

Bigger, established companies like Starbucks or Subway have the most distribution potential with access to resources, real estate, and capital.

Meal kits are a great product–unfortunately, they’re not enough to start a business. Brittain found that many founders of these companies did not have enough business expertise to evolve the idea into a full-fledged business. Consequently, companies faced the harsh reality of high cost-low retention. And although acquisitions may seem like the only light at the end of the tunnel, Brittain sees other opportunities for success.  

“If they’re not going to be acquired, they absolutely should be reaching out to restaurants chains and offering them a branded product or ask them to sell their meal kit exclusively in their store…,” says Ladd. Meal kit companies need to brainstorm a way to close the gap between the product and the consumer.

Listen to this episode of The Barron Report for more insights on the meal kit industry and his recommendations to founders in order to stay afloat!

SHOW NOTES

  • 12:33 Top 5 Companies To Watch

  • 15:34 Restaurants Co-utilizing Space and Meal-kit Delivery System

  • 18:10 Chef’d Biggest Flaw

  • 21:25 Misconceptions Of Success

  • 24:00 Fast Casual New Delivery Systems

  • 30:00 The Future of Meal Kits

  • 33:52 Deliver as Close to the Customer as Possible

  • 00:18 Introductions

  • 01:57 The Demise of Chef'd

  • 02:06 Current Status of the Meal Kit Industry

  • 04:23 Ready-to-eat Meal-Kit Development Ideas

  • 08:08 The Problem with the Meal-kit Industry as a Whole

  • 11:03 Convenience Stores as Distribution Points

 
 

Plated Meal Kits Will Be For Sale in the Aisles of Albertsons by the End of the Year 

Plated Meal Kits Will Be For Sale in the Aisles of Albertsons by the End of the Year 

In September of last year, the grocery giant Albertsons announced that it was buying the meal-kit company Plated for an undisclosed price.

After Amazon acquired Whole Foods, players in the food industry were forced to step their game up. Both grocery chains and meal-kit companies were now going to compete with the logistic giant Amazon and to stay competitive, they each have taken different approaches.

The timing of Amazon’s acquisition influenced the meal-kit company Blue Apron to achieve a lukewarm IPO.                                                    

Cleverly, Plated was looking to be acquired and Albertsons was looking for more easy to-go meals to offer its customers.

“Today’s consumer is looking for a variety of personalized shopping alternatives, and this transaction is the latest example of Albertsons Cos. meeting our customers wherever and however they like to shop,” said Bob Miller, chairman and CEO of Albertsons Companies in a press release from last year.

This week, Plated announced that its meal-kits will be available at hundreds of the Albertsons’ owned grocery stores by the end of 2018. The meals will also be available for on-demand delivery through Albertsons’ partner Instacart. 

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