Blue Apron has given millions of people the chance to cook with fresh ingredients without stepping foot in a store. Now grocers are fighting back.
Whole Foods is experimenting at some stores with displays that feature a recipe and all the raw ingredients a shopper needs to prepare it. Kroger is going further with its own test of kits with premeasured ingredients at four of its Cincinnati stores.
Both offerings are only available in stores, so they do not directly compete with Blue Apron's online business, which ships to a customer's home. But competition for meal kit companies is fierce, even without putting grocery stores in the mix.
Meal kit sales account for only $1.5 billion of the $800 billion grocery business, according to Mikey Vu, a partner at Bain & Company. But new companies are popping up, hoping to capture a piece of what could be a quickly growing business.
"Grocery stores see this as a threat, and they're going to find ways to fight back," Vu said. "It could be with in-store solutions and their own meal kits or partnering to sell meal kits."
There's no doubt, shoppers are looking for convenience and low prices. If grocery stores can master offering both in its meal kits, they could further pressure Blue Apron and the budding industry.
Grocery stores can sell cheaper options than most meal kit companies can because they don't have to pay for packaging and delivering products, said Rob Wilson, managing director and partner at L.E.K Consulting. Online companies do, and that has stunted their ability to make money.