Dive Brief:
- Peapod is partnering with two restaurant brands – Big Bowl and Wildfire – to expand its meal kit line, the company said in a statement. The new meal kits are available this month in Chicago, New York and Washington, DC.
- The collaboration features three new recipes inspired by signature dishes from the restaurants: Wildfire Beef Tenderloin with Couscous; Wildfire BBQ Bison Meatloaf, Mashed Potatoes and Caramelized Onions; and Big Bowl Sweet and Sour Chicken. The meal kits are available in serving sizes of two and four.
- Peapod, the online grocery delivery company that got its start in 1989, introduced its first meal kits back in 2014.
Dive Insight:
Meal kit players are turning to innovation in an effort to stand out in an increasingly crowded category. Peapod’s collaboration with Chicago-based restaurants for a new line of meal kits is the latest example of this push for differentiation.
Peapod is a bit of an expert in the space, particularly in meal kit partnerships. The company has been offering them since 2014, and has collaborated with General Mills, Campbell Soup, PepsiCo, spirit maker Jim Beam, Conagra and Skinnytaste blogger Gina Homolka. The company's prior experience in the space, and being able to use the meal kits as a complement to its traditional grocery delivery operations, could give Peapod another tool in its meal kit arsenal.
What's interesting about these meal kits is that Peapod collaborated with restaurants in its Chicago hometown, giving them a local feel for recipes and trends that really work. In addition, the new kits could be more enticing to shoppers by focusing on trendy, highly customizable cuisines like Chinese and Thai.
Unlike many of its prior partnerships, this one does not include a large CPG company. As consumers continue to distance themselves from middle-of-the-store food manufacturers best known for their processed fare, a local dining establishment might be a more attractive option viewed as producing better-tasting foods. It may add a layer of legitimacy if consumers know these recipes are developed by actual restaurant chefs.
Additionally, Peapod can benefit from cross-promotional and exposure opportunities from customers who may be familiar with the restaurants but not the grocery deliver service. Both Wildfire and Big Bowl have robust social media followings and their parent company, Lettuce Entertain You Restaurants, has nearly 50 years of experience in the restaurant space.
Peapod’s kits also have an advantage over Blue Apron and Hello Fresh by not being subscription based, as well as Kroger, Hy-Vee and Walmart, thanks to its delivery model. This provides an additional layer of convenience in a convenience-driven category. Dutch grocer Ahold Delhaize, which owns Peapod, also could eventually start selling the meal kits in its banners such as Stop and Shop, Giant and Food Lion.
In-store meal kits grew by more than 26% last year, according to Nielsen, and now represent a $154.6 million space. This explosive growth has some analysts warning of an impending shakeout.
While Peapod's latest partnership is unlikely to meaningfully alleviate Peapod's recent struggles — executives with Ahold Delhaize revealed last year that the service’s growth has slowed because of intensifying competition — every new product and change to its business model can help in this fight. Peapod, which has decades of experience in the grocery delivery space, has done a good job of improving its product selection, and recently announced a suite of new promotions aimed at improving its value image, but Amazon and Walmart have plenty of advantages that will continue to put pressure on Chicago-based delivery company.
