Dive Brief:
- Kroger announced it's kicking off its nationwide in-store expansion of Home Chef meal kits with rotating selections in 225 Midwestern stores. The retailer will also test out a limited supply of its new Home Chef Express line, which features meal kits that can be prepared in 15 minutes.
- Stores will feature four meal selections at any time and will rotate the selection weekly. Shoppers can also find recipes for each selection on Home Chef's website. The in-store kits will roll out at Mariano's locations in Illinois; at Pick N' Save and Metro Market stores in Wisconsin; and at Kroger-branded stores in Kentucky, Michigan and Ohio.
- Each meal kit serves two people, with pricing starting at $8.50 per serving. Customers can also purchase the meal kits online through Home Chef's website and choose from 18 weekly menu items. The first week the meal kit will feature sirloin steak, breaded Italian chicken, blue cheese and smoked almond pork chop, and adobo chicken enchiladas. Meanwhile, the Express line will feature steak tacos, Mongolian meatballs, chicken alfredo, and honey butter pork chop.
Dive Insight:
As more and more grocers have begun offering in-store meal kits, Kroger is hoping that owning a strong brand in the space will help it stand out. The grocer acquired Home Chef back in May for $200 million plus $500 million in incentives, joining Albertsons as the only grocery company to acquire its way into the red-hot but challenged meal kit market.
Selling its meal kits in a weekly rotation and testing out Home Chef Express could help Kroger address key consumer demands. Providing a variety of options appeals to those who want to spend time cooking or to those who want a fresh home-cooked meal in a fraction of the time. The format also entices shoppers to come into the store once a week to try the newest meals being offered.
Kroger has the advantage of offering the full range of grocery products to complement its Home Chef kits. It also can pour resources into the brand and help it develop its online-only offerings.
Those aren’t the only benefits Kroger sees in selling Home Chef’s meal kits. Now that the grocer has acquired Home Chef, it has more control over manufacturing and can gain valuable culinary experience. Most importantly, it also gets valuable customer data and technology that it can use across its growing prepared foods and foodservice business. Recently, Kroger expanded its Easy For You! line of customizable meals to 350 stores.
In addition to Kroger and Albertsons, Costco is offering Blue Apron meal kits in some of its stores, while HelloFresh kits are available at 600 stores run by Ahold Delhaize. In-store meal kit sales don’t measure up to online meal kit sales in terms of sales, but that could change quickly as more retailers bring offerings into their stores. In-store meal kit sales were just $154.6 million last year, according to Nielsen, compared to an estimated $5 billion for online meal kits.
For Kroger, offering Home Chef meal kits is another step towards solidifying its stores as meal destination. As pressure on the company intensifies, it's focusing on innovative partnerships and solutions in high-demand segments outside of traditional grocery offerings.
