Will meal kits be a hit on Walmart’s virtual shelves?
Whether as a move to continue boosting its Millennial appeal, to stay neck and neck with Amazon.com, to give its e-commerce customers some new eating options or all of the above, Walmart is now offering meal kits on Walmart.com.
Walmart introduced the meal kits, by Home Chef and Takeout Kit, early last week according to The Verge. Both of the brands offer kits through Walmart.com (Walmart earns a commission and referral fee on sales) as well as subscriptions through their own individual websites. Home Chef’s selection swaps out every Tuesday afternoon. Of the initial 30 meal kits offered, some have already sold out.
At the time of this article’s writing, a search on Walmart.com produced results for 22 meal kits between the two vendors. Takeout Kit meals appeared in the $32 to $35 range and serve four. Home Chef kits ranged from about $40 to about $80 with two or four servings per kit.
In a Market Force Information study, Home Chef was the third most frequently-tried meal kit service among those who had tried them, ranking below Hello Fresh and the most popular, Blue Apron.
The emerging meal kit space has grown into somewhat of a battleground for major CPG companies and retailers, with Amazon, Publix, Unilever and Kroger among others establishing a footprint in the space, either with their own kits or, like Walmart, through third-party partnerships.
Meal kits ideally offer customers the excitement of cooking something new and interesting alongside the convenience of delivery.
But success hasn’t been surefire for the big meal kit players. Blue Apron’s hotly anticipated IPO was a bit of a bust. Recently, the stock has been trading at around $3.80, after experiencing a slight bump on the early-December news that the company’s CEO was stepping down to be replaced by the CFO.
In a blog post on LinkedIn, Professor Daniel McCarthy of Emory University crunched the numbers to estimate a potential customer churn of 72 percent every six months for Blue Apron.
It is not clear whether Walmart will be moving any products from Home Chef or Takeout Kit onto its physical shelves.
- Walmart meal kit takeout home chef cooking – The Verge
- Meal Kits – Walmart.com
- Does Blue Apron’s ‘Meh’ IPO spell trouble for meal kit services? – RetailWire
- A detailed look into Blue Apron’s Challenging Unit Economics – LinkedIn
DISCUSSION QUESTIONS: Is Walmart making a smart move by getting involved in the meal kit space through online third-party relationships? Do you see Walmart eventually developing its own meal kit offerings?