Grocers, Meal-Kit Services Must Approach Each Partnership Differently
It’s well known that not every grocer approaches its job the same – different regions, demographics and more call for different approaches to food retail. This also is why every partnership between a grocer and a meal-kit service must be approached differently.
That’s the philosophy of Home Chef, a Chicago-based meal-kit-delivery provider that understands the value of collaborating with food retailers in a time when in-store exposure can determine whether a service lives or dies. It’s one of a few currently working with physical retailers to sell their kits, others including Chef’d through Gelson’s and Tops Markets, and True Chef through Bashas’ stores.
“A number of brands in the category have really chosen not to interface with … retailers in general and are taking more of a go-it-alone approach,” Rich DeNardis, chief revenue officer of Home Chef, told Progressive Grocer, whereas Home Chef is collaborating with grocers. “Every partnership [of ours] has a slightly different flavor to it, and that’s driven by a couple of things.”
Different types of meal-kit users and shoppers approach retailers in different ways, especially depending on how the retailer operates. For example, a particular retailer might have a larger ecommerce presence and require a different type of partnership to reach its customers than a retailer more focused on physical stores.
“And certainly within the food space, different retailers are at different points along that spectrum – whether it’s offering something more akin to an Instacart or something more like click-and-collect,” DeNardis said.
And with meal kits being relatively new, grocers might not necessarily have a category manager who can simply slot the kits in between two other traditional categories. Adding to that, Home Chef is selling individual kits in some cases, and bundles of kits in others, requiring different ways to get marketing communication across to the consumer.
“And in general too, awareness certainly is growing about the meal-kit category, but there’s still a lot of education required to help users understand exactly what it is,” DeNardis said, noting that many customers who are still learning are coming from a world of frozen or prepared foods, or purchasing individual ingredients.
Home Chef currently partners in two manners with food retailers to sell its meal kits. First, it leverages physical footprints, distributing and merchandising through brick-and-mortar locations, and second, it sells through ecommerce storefronts. The service employs the second method in its partnership with Bentonville, Ark.-based Walmart: A search on the mega-retailer’s website late last year turned up 11 Home Chef kits – including ones under the Family Favorites, Farmhouse Favorites, Everyday Supper, Comfort Classics and Chef’s Choice lines, as well as options for carb-conscious, calorie-conscious and gluten-sensitive consumers – for delivery.
Ultimately, Home Chef wants to find partners that are willing to invest the amount of time required to get the partnership structure right on the front end. Potential retailer partners also must demonstrate a willingness to work together through initial launches, ensuring the right amount of time and effort is being dedicated to make the partnership as smooth as possible while also being open to making tweaks along the way to better ensure success.
At the moment, Home Chef is working with one retailer to do a lot of behind-the-scenes testing to iron out “logistical wrinkles” that might exist so the service can get products to the retailer in a way that is predictable and fresh, as well as optimizing the customer experience, DeNardis noted.
In addition to not taking a cookie-cutter approach, grocers and meal-kit services should consider six other things when looking to partner, including experience in building retail-ready kits, the grocer's reputation and quality regarding fresh foods, and the ability to provide choice, among others.