Why poultry companies should be interested in meal kits

Meal kits, an emerging food trend placing all the ingredients for a meal in a single container, present an opportunity for poultry companies to work with others in the food industry to develop new products.

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Meal kits place all the ingredients for a dish together for consumers looking for convenience. | Merrimon, Bigstock.com
Meal kits place all the ingredients for a dish together for consumers looking for convenience. | Merrimon, Bigstock.com

Meal kits, an emerging food trend placing all the ingredients for a meal in a single container, present an opportunity for poultry companies to work with others in the food industry to develop new products.

Diana Sheehan, director of retail insights at London-based research and data firm Kantar Consulting, said meal kits are among many trends grocers and those in the food industry should monitor in the near future. She spoke about the present and near future of food retail as part of the National Chicken Council’s 63rd Annual Conference in Washington on November 2, 2017.

Just like many other industries, disruptive technology is changing how people shop for groceries and how retailers present themselves to consumers. She said grocers will expand their electronic commerce opportunities, automation of how consumers buy and receive goods and blur the line between a grocery store and a restaurant.

Meal kits on the rise

The biggest opportunity for the poultry industry to capitalize on changing consumer behaviors lies in the emergent meal kit trend. Sheehan said retailers want to work directly with the suppliers to source ingredients in kits designed to make shopping and cooking simpler.

Meal kits place all of the ingredients a consumer would need to cook a dish into the same package. This is a more convenient option for consumers who want to try something different for dinner but not spend the time coming up with a new recipe or hunting down quality ingredients at their local grocer.

Online, subscription-based meal kit delivery companies like Blue Apron Inc. and HelloFresh – founded in 2012 and 2011, respectively – raised the profile of the kit in recent years, but Sheehan said traditional retailers are much better prepared to capitalize on the trend. Delivery companies see consistent growth but they aren’t making a profit. She predicts the online delivery companies will continue to suffer as more grocers enter into the meal kit space.

“Meal kits as a concept, as a product innovation, as a category are never going away. They’re just not,” Sheehan said. "But subscription services will."

While one grocer, Albertsons, acquired one such company to gain meal kit knowhow, Sheehan said grocers show little interest in acquiring meal kit companies because they can do it themselves at much greater profit. Subscription-based services struggle to retain customers and show limited appeal to households with children, she said.

How the industry can partner with retailers and food companies on meal kits

Along with creating another avenue to sell the protein, Sheehan said meal kits can highlight where their ingredients come from and advertise the poultry brand. Protein suppliers in the meal kit can promote properties that consumers care about like environmental sustainability, local sourcing and health and nutrition benefits.

Chicken, she said, is already well recognized by shoppers as a desirable light, healthy protein. Producers should play a supporting role, either through working directly with the retailers or developing their own, independent product.

While retailer-developed mealkits are just getting off the ground, retailers are open to and interested in partnering with poultry producers and getting them into innovation labs and test kitchens to create a product. The next step will be working with other food and ingredients companies to develop kits independently of the grocers. The industry may not be there yet, she said, but a road map does exist. She said one of the first meal kits was developed by Peapod, an online grocery delivery service, working with Italian pasta maker Barilla SpA.

 

 

Other retail trends worth monitoring

Diana Sheehan’s presentation centered on the changing consumer and what it means for grocers. A large demographic and technological shift is powering a move toward four main concepts:

  • Fresh and better: Driven by demand from millennial shoppers, grocers will emphasize products that are fresher and viewed as higher quality by the key consumer segment. This means placing a greater emphasis on what she called natural and organic products and ingredients.
  • Innovation: Along with the meal kits, grocers will need to continue innovating on how products are brought to market, whether it’s through expanded foodservice options, the addition of sit-down restaurants or bars inside the store, or the inclusion of greater e-commerce delivery and in-store pick up options.
  • Localization: Grocers are not immune to the local food movement, and will prioritize communicating the local origin of food to shoppers. This is also seen as a sustainability issue, as products traveling longer distances create a larger carbon footprint.
  • Retailers differentiating themselves: Established grocers already own billion- and trillion-dollar brands but they will try new methods to either get shoppers in their stores or get them to make purchases online. These include expanded customer service and information along the perimeter and possibly further blurring of the line between a grocery store and a restaurant.
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