ConAgra, Unilever mull delivering meals to the home
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Start-up companies such as Plated and Blue Apron have carved out a niche in the food business by delivering meal kits to the home. Major food makers are taking notice. Two of them — ConAgra Brands and Unilever — are considering entering the arena of delivering meals to the home to satisfy the needs of consumers for convenience and novelty.
“This is so different from models we historically have had,” said Bob Nolan, Senior Vice President of Insights & Analytics at ConAgra Brands. “We have to understand: Do we want to partner with someone or acquire them? We need to develop a solution for the next 10 years vs. what has worked for us for the last 50 years.”
Meanwhile, Unilever has been partnering with a lot of customers in e-commerce, and meal delivery is one of the areas it is exploring, according to Allison Scott, Director Shopper Insights.
“Plated has changed my life,” said Ms. Scott, a mother of three. She signed up several years ago for the home-delivered meal service, which provides chef-designed recipes and pre-portioned ingredients. “As a shopper insights professional, [I discovered] so many unmet needs I did not know I had,” she added.
The executives discussed the possibility of meal delivery to the home in a panel discussion about the state of the food industry at OmniShopper 2016 in Chicago.
Ms. Scott, who uses Plated three days a week, is studying the underlying insights that resulted in this market offering and trying to leverage those insights.
“I do not have to shop for those [days] anymore,” Ms. Scott said. “Yet I still have the experience of nurturing.”
Discussion questions: What do you think of the potential of meal kit delivery services for food suppliers? Should suppliers work with retailers or some other delivery partners to roll out such services?
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14 Comments on "ConAgra, Unilever mull delivering meals to the home"
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Principal, Anne Howe Associates
The boxed food giants are way behind in this area. It would be okay to find a branded box of pasta or sauce in a meal kit, but the nutritional label better be clean. The idea of fresh meal kits gets lost entirely with the addition of sugar- and sodium-laden canned goods on board. If big CPGs buy Blue Apron, Plated or others, they might be better served to be quiet about it and learn how to make the food consumers want to eat.
President, The Ian Percy Corporation
I keep hitting the thumbs-up icon, Anne, but it won’t add any. I’d just say you are too kind in referring only to sugar and sodium additives. I was thinking more of glyphosate (weedkiller).
Managing Director, StoreStream Metrics, LLC
Making life easier, more enjoyable and seamless for shoppers is (or should be!) the goal of every retailer. There will always be a market for products and services that offer this trifecta for its shoppers. Offering meal kits is a perfect way to deliver this experience. Providing a well-balanced healthy meal for kids allows time for parents to focus on quality time with their children in a chaotic fast-paced environment. More food makers should be exploring this marketing and merchandising strategy.
Founder, CEO, Black Monk Consulting
President, Global Collaborations, Inc.
Are Unilever and ConAgra planning to really change their product offerings to appeal to this group? The really successful fresh food delivery services offer fresh ingredients, healthy ingredients (low salt, low sugar, low preservatives) and interesting food options. Those three descriptors, in combination, are not what consumers think of when thinking of ConAgra or Unilever. Making ingredients that are pre-packaged with high salt, sugar and preservatives will not make ConAgra or Unilever products competitive in the meal delivery space.
President and CEO, ProLogic Retail Services
Food suppliers should be focusing on their core business, which is creating really great food. Consumer tastes are changing rapidly and big CPGs such as Unilever and ConAgra are perceived as behind the times with their legacy of processed foods.
Rather than build a direct-to-consumer business with meal kits, these CPGs should focus on improving their core offerings with fresh, organic foods along with the marketing to support them. With better products, they will see demand grow through all channels and they won’t have to experiment with risky new business models like meal kits.
Strategy Architect – Digital Place-based Media
Indeed Ross … moving into a new line of business, especially one that challenges exist supply relationships, had better offer the potential to gain significant market share that can be protected as gained, at start up costs that can be recovered quickly.
Duking it out with the delivery services of prepared food providers (pizza, fast casual, etc), caterers who can move down-market easily, “meals on wheels” providers and mail-order services is not a supply consolidation, but thousands of gorilla battles fought daily, which defies a cookie-cutter solution to market share capture.
Uber-delivery from a range of commissaries, exploiting an ordering/payment portal with performance analytics to assure customer satisfaction processes, perhaps are elements of the answer — and the opportunity. I’d like to contribute to the business plan on this.
President, The Ian Percy Corporation
I was going to rant on about the foolish “me too” mentality that seems to pervade our business communities. My goodness, come up with your own breakthrough ideas! We already have five times too many providers of pretty much everything.
However, having read Anne’s comment above, I have nothing further to say and yield my time to her. I can just see it now: “Monsanto Meals” delivered to your home. Their competitive advantage? Shelf life!
Owner, Tony O's Supermarket and Catering
Exactly Ian. Entrepreneurs are busting their butts every day to create fresh new ideas, and I include myself in this category. All these delivery services are available right now, and only a few will survive, as the high income areas where these businesses can turn a profit are filled with similar companies. ConAgra can move forward with outstanding new products that are not only healthy, but also tasty and affordable. With their economies of scale, they would have a huge advantage over smaller start ups, so my advice to Con Agra is to make outstanding new foods that meet the criteria I stated, and success will follow.
Independent Board Member, Investor and Startup Advisor
Forward-thinking grocers should be launching such meal kits for sale in their stores or for home delivery. Giant Eagle’s Market District is already doing so, and more should follow. The kits are a good place for a grocer’s store brand ingredients. Makers of name-brand ingredients would be wise to reach out and partner with these grocers.
Retail Tech Marketing Strategist | B2B Expert Storytelling™ Guru | President, VSN Media LLC
Principal, The Feedback Group
While I too am skeptical that the big CPGs can pull this concept off, I do give them credit for at least considering it. Many need to carefully examine where they are at today and where they are going to be in the future with the quality and healthfulness of food products offered.
SVP Americas, Ariadne
Could be just me, but in any other industry/market these innovators would be natural acquisition targets by larger, well established brands looking to capitalize on the innovation and drive their own business growth, i.e. technology, pharma, transportation, etc. Based on plenty of examples, success would be based on not destroying the value of the innovator while leveraging the economies/scale of the acquirer! Makes for a good business strategy for big brands working to stay relevant.