HelloFresh has prepped a line of retail-ready meal kits that will be available in all 581 Stop & Stop and Giant-Landover stores beginning this month, marking the first U.S. retail launch for the subscription-based online meal-solutions business and the continued omnichannel expansion for the fast-growing meal-kit category.
The U.S. launch – which HelloFresh projected could be the first of several forthcoming retail store partnerships – comes amid a rash of similar alliances as U.S. supermarket retailers track down their virtual competitors, while meal-kit providers look to expand availability and reduce costs of customer acquisition.
Last month, Kroger said it would pay up to $700 million to acquire the Chicago-based meal-kit business Home Chef, while Albertsons is in the process of rolling out meal kits under the Plated brand it bought last year. Walmart is growing an offering of meal kits from Sun Basket, and Blue Apron and Chef’d kits are also rolling out in retail stores.
Meal kits, or collections of assembled ingredients that enable consumers to quickly prepare quality meals at home, play to consumer trends toward convenience and freshness. For supermarkets, meal kits can help them defend share against restaurants and takeout options.
Meal-kits sales in the U.S. were estimated at more than $2 billion last year, but less than $200 million of those sales came in the grocery channel, which grew by 26%, according to Nielsen.
Berlin-based HelloFresh said it spent two years prepping a retail launch, including a global test program. In the U.S., it has more than doubled its distribution network to 11 facilities and has designed unique packaging to optimize shelf space.
“Grocers needed to profitably replace underperforming or low-margin product categories and meet their customer demands for chef-curated, fresh and convenient meals,” said Tobias Hartmann, North American president of HelloFresh, in a statement. “Our retail line reduces the pressure on grocers to create these meals themselves and easily integrates into growing areas of their business such as online grocery and delivery.”
Stop & Shop and Giant until now have offered their shoppers meal kits through the Peapod online business, also owned by Ahold Delhaize, and in some stores.
HelloFresh said its online business collects more than 60,000 U.S. customer data points per week, and it has used those insights to develop recipes in its retail lineup. The offering includes choices such as Peppercorn Steak, Mediterranean Style Chicken, Homestyle Meatloaf, Chickpea Couscous and Paprika Chicken, with retail prices ranging from $14.99 to $19.99.
Since its U.S. launch in 2013, HelloFresh has amassed 1.2 million active U.S. customers and delivered 26.5 million meals over the course of its fiscal first quarter.