New Competition for Meal Kits

About a year and a half ago I was interviewed by the Atlanta Tribune about a story they were running about prepared meal kit services (think Blue Apron, HelloFresh, or my family's favorite Martha and Marley Spoon)  One of the questions they asked me was whether I expected the market to grow  Here's what I said then.

Hard to say. It will depend on the ability of the box services to continue to offer competitive offerings with grocery stores and restaurants, and it will depend on how these other food service outlets respond in turn. For example, restaurants already offer take out. And, what’s to stop Walmart or Kroger from offering their own boxes ready for pickup?

As it turns out, I heard a story on NPR this morning by Dan Gorenstein with Marketplace covering precisely this topic.  Apparently Kroger and Publix are, in fact, going to create their own prepared kits.  It's doesn't take a genius to see that this was going to happen.  Gorenstein interviewed Northwestern economist Mike Mazzeo who said supermarket chains are "well positioned" to take a bite out of the growing business.  Mazzeo said  

Supermarkets can get things at lower prices. They have access to all of the ingredients for these meals. They don’t have to do marketing. They can just put it on their shelves.

That is, grocery stores can provide a similar service at a fraction of the cost.  In some ways the grocery story offerings will be more convenient because one doesn't have to sign up for a subscription and pre-plan which and how many meals to buy and plan to be home when the box is delivered.  But, it would require you to go to the store, and that's part of the convenience of the meal delivery service - not having to visit the store.  

While I'm sure Blue Apron et al. can't be thrilled to see new competition from grocery stores, this is a good sign for consumers.  We'll have wider availability of options at lower cost.