Meal-Kit Service Chef’d Shuts Down Unexpectedly

Randy Hofbauer
Digital and Technology Editor
Gelson's was the first grocer to offer Chef'd meal kits in its stores

Meal-kit service Chef’d has shut down and laid off its employees, Business Insider has reported, citing four sources with knowledge of the situation and an internal company e-mail.

The company reported to its 350 employees yesterday that it was immediately ceasing operations, Business Insider said. Most of the workers operated out of Chef’d’s warehouses in Brooklyn, New York; and California.

As of today, customers no longer are able to order meal kits via Chef’d’s website, the news outlet reported.

"We have had some unexpected circumstances with the funding for the business," said founder and CEO Kyle Ransford in an email to employees obtained by Business Insider. It added that "due to setbacks with financing, unfortunately, we are ceasing operations for all employees, effective today."

In May 2017, Chef'd raised $10 million in funding from Campbell Soup Co. It raised another $25 million that August from Smithfield Foods.

El Segundo, Calif.-based Chef’d was one of many meal-kit providers on the market but differentiated itself in several ways. First, the brand positioned itself as a gourmet-focused option that leveraged popular chefs and brands to help develop its meals and recipes. Second, it was one of the earliest to understand the importance of partnering with brick-and-mortar retailers to gain more exposure and sales, as well as get a leg up over the competition.

The service had begun its physical distribution agreements last year with Gelson’s Markets and Northeastern food retailer Tops Markets. It followed by expanding availability to a number of other brick-and-mortar grocers, including Costco, Harris Teeter, Hy-Vee and Weis Markets.

Other partnerships outside of physical grocers inked include ones with
eating-technology company Innit, which claims to be the developer of the world’s first connected food platform, with the two companies integrating to provide ingredients of select meals on Innit to be ordered as a meal kit through the service; Byte Foods, which supplies patented smart refrigerators to sell fresh food via unattended storefronts in workplaces, hospitals and apartments, to sell kits inside the devices; and drug store giant Walgreen Co. and its stores in the New York metropolitan area.

The news comes as a surprise to many, given Chef'd's early adoption of a partnership model. Recent research from Schaumburg, Ill.-based market researcher Nielsen revealed that while services such as Blue Apron and Hello Fresh might make up the majority of meal kits purchased, kits offered through brick-and-mortar food retailers have experience impressive gains. In-store meal kits saw a 26.5 percent rise in sales over the past year, reaching $154.6 million.

About the Author

Randy Hofbauer

Randy Hofbauer is the former digital and technology editor of Progressive Grocer. He has more than a decade of experience as a content strategist, researcher and marketer, almost all of it covering CPG retailing. His insights and work have been cited in a number of media outlets, including The New York Times, the Associated Press and the Chicago Tribune, and he was named a finalist in the Software & Information Industry Association's 2018 Emerging Leader Awards. Follow him on Twitter or connect with him on LinkedIn.

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