Dive Brief:
- Tops Markets LLC has partnered with meal kit company Chef’d to offer dinner-for-two kits in each of the grocers’ 171 stores, according to Progressive Grocer. Dishes include maple glazed pork chops, chicken pad thai and pan-fried spicy pork udon.
- This marks the second retail tie-up for Chef’d, which began offering dinner-for-two kits at Gelson’s Market locations in California this summer. Research shows that shoppers are eager to buy meal kits from their local supermarkets, and retailers are obliging by developing their own lines and by partnering with kit companies. Most notably, Albertsons bought meal kit pioneer Plated in September.
- Chef’d could very well benefit from the increased exposure. According to a recent survey from Field Agent, just 4% of meal-kit shoppers have bought kits from Chef’d compared to 64% who have purchased Blue Apron kits.
Dive Insight:
Meal kits continue their march into grocery stores as companies look for new revenue streams beyond the crowded and costly online subscription market.
Chef’d, which forged its first retail partnership with Gelson’s in California this summer, seems like a good fit for Tops. The New York chain has struggled financially of late, but is trying to improve its product assortment and store experience as it battles tough competitors like Wegmans and Hannaford. Last year, Tops revamped its private label selection to include cleaner ingredients and more attractive packaging.
With its brand partnerships and focus on quick, accessible meals, Chef’d offers a good entry point to the meal kit market for Tops customers. The company offers hundreds of dishes, and with the Tops partnership it will focus on dinners for two, with dishes like Cajun style chicken pasta and herb crusted flank steak available in a special store display.
No word on the price of the meals, though they’ll likely be close to the $25 price point offered at Gelson’s.
Unlike grocers that have slowly introduced meal kits in their stores, Tops is going all in with a chain-wide rollout. It’s also one of the few grocers in its region to offer kits, which should help it stand out. But Tops’ competitors have a strong prepared foods game that will be tough to overcome. Wegmans, which is known for serving restaurant-quality food in its stores, offers “power meals” that include a fresh protein, veggies and seasoning. Whole Foods, meanwhile, offers a wide variety of prepared options, and could see meal kits developed by parent company Amazon come to stores soon.
Research shows consumers enjoy the convenience of buying meal kits in their grocery store. Nielsen estimates supermarkets sold $80 million in the category last year, and should see exponentially higher sales this year, while a Field Agent survey shows 78% of shoppers want stores to sell their own kits.
Private label kits have the advantage of higher margins and can give retailers control over branding, but the supply chain and market expertise can be tough to develop. With so many meal kit companies struggling to make money, partnerships could be made for an attractive price.
