Meal Kits’ Evolution Should Scare Supermarkets

The Lempert Report
December 09, 2016

Chef'd is the ultimate delivery meal kit service.

While you’ve heard of Blue Apron, Purple Carrot, Atkins and the dozens more meal kits - even those being hawked by celeb chefs and publications like the NY Times and Women’s Health – you probably haven’t heard of the powerhouse El Segundo California based Chef’d who is the foods, delivery and operational supplier to many other brands out there. 

Chef’d strategy is smart, they do have their own consumer brand and meal kits, with recipes sourced from the likes of Allrecipes, good housekeeping, The New York Times, James Beard and a slew of celebrity chefs that they pay a royalty of 50 cents per order to - they are also co-packing for many other meal-kit brands out there. 

Much like the existing model for supermarkets that has branded goods producing the store’s own brands. With one major difference – and the opportunity that crates a barrier for entry by meal-kit competitors. 

The success of meal kits is that every ingredient is measured out perfectly to each recipe. That requires a lot of labor, today mostly by hand, and certainly if this phenomena continues could have elements fulfilled robotically. A producer of a store brand pasta sauce for example, fills vats with the store’s receipt and turns on the switch and out comes hundreds or thousands of cases. 

The approach that Chef’d has taken is smart and expensive, but also creates a barrier to competition, why build your own facility with scores of workers measuring exact portions of pasta, or spices into bags when someone else can do that at a fixed costs? 

 Another big advantage at Chef’d is that a shopper does not have to pre-order off a set menu, or sign up for a subscription. Want to order just one meal (for two) click away. Order two meals and shipping is free.

Their plan is to become as insightful, through their algorithm as is Amazon, Travelocity or Netflix and start recommending meals and recipes based on your past purchases, on-site views and profile.