Dive Brief:

• Plated has announced that it will lay off 10% of its New York City based corporate staff, which is about 25 people, according to a report from Bloomberg. The cuts are intended to reduce expenses for Plated and better utilize Albertsons’ existing operations structure.
• A spokesperson told Grocery Dive in an email that the company has taken steps to better leverage the overall resources of the company, which resulted in the head count reduction at Plated's New York office. 
• "Our team has had several quarters to evaluate Plated’s operation, and we feel there are opportunities to streamline processes and reduce expenses while further exploring additional offerings both for subscribers and in-store kits in the future," the spokesperson said. 

Dive Insight:

Plated has had a rocky quarter. In January, CEO and co-founder Josh Hix stepped down without much explanation. Just two weeks ago, Plated meal kits disappeared from Albertsons store shelves in Boise, with the retailer saying it was a temporary move to focus on innovation and future expansion.

Now, it appears there could be more going on behind the scenes. Based on what the company has reported, the restructuring effort could simply be a move to streamline operations and cut costs, and may not indicate deeper trouble. However, the future direction of Plated is unclear, and it raises questions as to whether or not the meal kit maker is finding success under its parent company.

Albertsons Companies remains committed to Plated, a company spokesperson told Grocery Dive. 

"Like any responsible business owner – we evaluate our business frequently and do everything we can to increase profitability and gain customers, and in the case of Plated, we’re also looking at how we can iterate their offerings to expand from dinner into other meals and needs," she said. 

When Albertsons made its high-profile acquisition of Plated in 2017, it was promoted as a strategic investment to support consumer demand for in-store meal solutions and easy-to-prepare foods. Since then, the company has maintained the subscription model and introduced the kits to as many as 300 banner stores across the U.S.

Recent news indicates Plated is undergoing a careful evaluation, and that the company stands at a pivotal point in its evolution. Setting the right leadership and strategy for Plated will be one challenge facing Albertsons’ new president and CEO Vivek Sankaran, whose appointment will be effective April 25.

Although they’ve been picking up pace with in-store retail sales, meal kits are on shaky ground. Companies churn through customers, and dwindling subscribers have driven companies such as Blue Apron to explore new ways to generate revenue. Some experts claim the meal kit model is unsustainable, though recent research shows there's still a high level of untapped demand.

Meal kit companies and retailers have turned to in-store kits as a solution to the embattled subscription business. HelloFresh began selling its meal kits in grocery stores including Giant and Stop & Shop to boost sales, and other retailers have purchased meal kit companies or launched their own, such as Kroger buying Home Chef and Amazon placing its meal kits at Whole Foods.

While Albertsons’ situation with Plated may be unique, the news is enough to raise caution among companies that are investing and lead to questions as to what the future of meal kits will be.