Meal Kits’ Evolution Should Scare Supermarkets

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

Chef’d's strategy is smart: It has its 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 it pays a royalty of 50 cents per order to, and it's also co-packing for many other meal kit brands out there. 

This is much like the existing model for supermarkets that have 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 recipe and turns on the switch, and out come 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 cost? 

 Another big advantage at Chef’d is that a shopper doesn't have to pre-order off a set menu, or sign up for a subscription. If you 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.