This fresh-food product failed at Albertsons’ Boise-area supermarkets. Now it’s back
They’re back. And they cost less.
Plated meal kits, which figured prominently when the Broadway Albertsons opened in July 2018 but later disappeared, have returned to the Boise-based grocery chain’s flagship store.
“We have revamped them, and we think they will do well,” John Colgrove, the president of the company’s Intermountain Division, said in an interview.
The boxes, which serve two, sold initially in stores for $18.98 each. They’ are now $4 cheaper at the Broadway store. The kits are also available at the Albertsons Market Street store at 3499 E. Fairview Ave. in Meridian, a spokeswoman said.
And they feature new recipes, simplified with precut vegetables. Previously, customers had to cut those themselves.
A new chicken tikka masala kit tried by a reporter included two chicken breasts, precooked rice, spinach leaves, sliced onions, curry paste, butter and mascarpone. Several other varieties are available, including soy-honey pork lettuce wraps, chicken, kale and peanut salad and beef Bolognese.
“These are our first steps toward growing Plated into a comprehensive in-house culinary brand,” Albertsons spokeswoman Kathy Holland said in an email.. “More store locations will be added throughout the year.”
The first effort faltered. By the time the Market Street store opened in March 2019, the kits had been stripped from the Broadway store and six other Boise-area Albertsons. Customers had to go online to buy the meal kits and pay shipping costs to get them delivered.
Albertsons bought New York-based Plated in September 2017 for a reported $200 million. At the time, Albertsons executives said the purchase would allow the company to get meal kits in the hands of more customers by selling them in stores and eliminating the time and cost of shipping through online ordering. At the same time, Plated would continue to offer the convenience of website purchases.
But Plated and some of its competitors had trouble retaining customers. There’s added now competition from store delivery and pickup services. And dinner selection is often a last-minute decision, which made it tough for companies to retain their subscription customers, said NPD Group, a consulting firm.
Of the 50 million U.S. adults who have tried meal kits, NPD Group found that only about a third have remained as regular users.
“It was a bomb. It did not work,” Bob Goldin, an industry analyst with the Chicago firm Pentallect, said by phone. “The whole category: Blue Apron has had lots and lots of problems, Hello Fresh has slowed down. It’s been pretty much a disaster.”
The sector started with a bang. When Blue Apron offered its initial public sale of stock in 2017, meal kits had become a $4.65 million industry that hadn’t existed 15 years earlier, Salon magazine reported. Blue Apron reported more than a million customers in March 2017.
The early success led grocery chains, including Albertsons, the second-largest grocery company in the nation, and No. 1 Kroger, which owns Fred Meyer, to buy other new meal kit companies. While Albertsons bought Plated, Kroger bought Home Chef.
The timing of Albertsons’ introduction of Plated was not good, Goldin said.
“They bought it while it was a frothy category, but it’s really slowed down,” he said.
By late 2019, Blue Apron’s customer count had dwindled to 386,000, investment website The Motley Fool reported. Many early Blue Apron investors overpaid for the stock, despite early warning signs, The Motley Fool said.
Still, Hello Fresh expanded from 710,000 to 1.5 million during the same period, which The Motley Fool said “was an exception in the market.”
Last November, Albertsons changed direction again. The company said it would no longer sell its Plated kits online. The grocery giant announced plans to return the kits to stores in 2020.
Over the past year, Albertsons and Fred Meyer have expanded home grocery delivery service and programs that allow customers to order online and pick up their groceries at the store. At the same time, Amazon began offering free home delivery within two hours from Whole Foods stores that it owns.
This story was originally published February 10, 2020 at 4:00 AM.
