Dive Brief:

• California-based premium grocer Gelson’s now sells Chef’d meal kits at one of its stores in North Hollywood, with plans to sell them at additional locations, reports Progressive Grocer. The line features twelve Chef'd recipes that include everything needed to make dinner for two, priced at $24.99.
• This is Chef'd's first offering inside a brick-and-mortar store, and represents an opportunity to expand its audience in a packed, economically challenged industry.
• "This is a brand-resonant partnership for Gelson's, which has always strived to offer only the very best, freshest produce and quality meats to our customers for more than 65 years," said Gelson's president and CEO Rob McDougall in a company statement. 

Dive Insight:

The Gelson’s and Chef’d partnership could be a good match. Gelson’s is a premium grocer known for its quality fresh foods and ingredients, along with stellar customer service. Chef’d meal kits feature farm-fresh herbs, produce and proteins, with all meats free of additives and preservatives. Aside from being a nice premium pairing, the kits are a way for both companies to tap into the growing demand for meal kits in grocery stores. According to Nielsen, grocers sold $80 million worth of meal kits last year, and should see considerably higher sales this year. 

Gelson’s gains a ready-made meal solution offer, and one that appears to align well with its corporate principles. Chef’d probably stands to gain a whole lot more from the deal, though, with instant exposure to Gelson’s loyal customer base, and frequent and repeat supermarket traffic. Selling through brick-and-mortar retail likely has lower marketing costs associated with creating awareness, generating interest and acquiring customers than does the online business. This could be a step towards removing a barrier to meal kit profitability, with customer acquisition expenses a major hurdle in Blue Apron’s business model.

Recent research from Field Agent finds that there’s also strong interest amongst consumers willing to purchase meal kits as part of their regular grocery shopping trips — or even make an extra trip to the store as the need arises. "Meal kits have exploded in popularity, with the remarkable growth of Chef'd and other companies online. Still, most people do the vast majority of their food shopping in grocery stores," Chef'd CEO Kyle Ransford said in a company statement. 

Whole Foods already sells Purple Carrot meal kits in its stores, so a Gelson’s/Chef’d tie-up isn't without precedent. But Field Agent’s data also reveals that 78% of consumers want grocers to develop their own meal kits for in-store purchase, which could be a strike against the Gelson’s/Chef’d deal. Some grocers — Kroger, Publix and Wegmans, among others — are already selling their own kits. Now, it seems just a matter of figuring out how to market and price their meal kits in order to grab a bigger piece of the $5 billion meal kits business.

Gelson’s offering Chef’d in its stores could provide a good short-term solution, but don't be surprised if the retailer eventually develops its own store brand meal kits. It seems a natural fit given Gelson’s reputation for high-quality fresh foods, ingredients and consumer solutions.