Chef'd and True Chef meal kits to 'double if not triple' retail footprint this year
True Food Innovations (TFI) re-launched its True Chef and Chef'd into US retailers three months ago, boasting a 55-day shelf life after months of reformulating and packaging and high pressure processing (HPP) development. Its True Chef product previously had a 30-45 day shelf life and the Chef'd brand – which it acquired in July last year – just 14-15 days.
'We have quietly amassed about 800 stores'
With four variants under each brand, including black truffle butter sirloin steaks and chicken piccata, the meal kits are now present in a range of retailers, including Ahold stores, Target, and Tops Market. And Robert Jones, president of True Food Innovations, said there are solid expansion plans in place for the rest of the year.
“We have quietly amassed about 800 stores of distribution in the last couple of months and are working with various other retailers on launches, prior to summer, as well as for the Fall sets,” Jones told FoodNavigator-USA.
“We're not in the big headlines which is okay not to be, some of that is obviously just smoke and mirrors to a degree; we have just been charging along with our sales and distribution.”
For the rest of the year, True Food Innovations would be stocking both meal kit brands in more stores nationwide, either individually or side-by-side, he said.
“We're continuing to get additional distribution. We should double if not triple our distribution by the end of the year, based upon conversations and interest today.”
A longer shelf life is 'one of the major opportunities'
The 55-day shelf life of both lines, Jones said, enabled the company to work with distributors as well as retailers directly, something many meal kit brands were unable to do.
“That's one of the major opportunities for a product with our shelf life. More than half of the retailers are serviced through distributors in the US and when you have a very short shelf life, you have to go direct; well, you just lost 60% of the retail market that are serviced by distributors.”
Beyond expanding its physical footprint, True Food Innovations will also be adding an additional retail meal kit line later this year through an exclusive licensing agreement with a major CPG firm, Jones said, although at this point he is unable to name names.
Discussions are also underway with several large retailers to develop private label meal kit variants, likely to be executed in 2020, he said.
We don't believe the direct-to-consumer meal kit offering is ultimately sustainable
All innovation, however, will stay within the retail model, Jones said. “We don't believe the direct-to-consumer meal kit offering is ultimately sustainable, for a multitude of reasons.
"Shipping and packaging is quite costly as part of that model; the subscription aspect of the business is also not consumer-friendly; and we also believe that the product itself, with anywhere from a 30 minute to 1.5 hours cook time is just not commercially viable in the long-run. It's very niche or occasional and it's not something that consumers want to subscribe to on a weekly basis.”
'Every Coke needs a Pepsi'
Asked if the company was worried about competition as the market developed, Jones said: “Every Coke needs a Pepsi, and competition is healthy. I applaud when my competitors are out marketing – all of that provides a focus and a spotlight on the opportunity for meal kits in general.”
The biggest challenge for True Chef and Chef'd, he said, would not be competition but the transition of the category as a whole.
“The transition of direct-to-consumer to retail is a transition that consumers need to make; they initially see meal kits as only direct-to-consumer, so they don't know they are specifically on shelf at brick and mortar stores. But, with Kroger and Home Chef and the expansion of that brand and store count, and some of the other large retailers now coming into carrying meal kits, the consumer will be more conditioned.”
According to Nielsen, in-store meal kit sales in the US reached $93m last year, thanks in part to 187 new items launching onto the market and a 36% increase in meal kit users, largely in-store.
In 2017, the percentage of meal kit users that purchased exclusively online sat at 67% versus just 30% that bought products exclusively in-store; in 2018 exclusive online purchases dropped to 60% and exclusive in-store buys rose to 32%, Nielsen data showed.
Despite the challenges transitioning from direct-to-consumer to retail created, Jones said there were also notable opportunities, namely that meal kits were entering retail as a tried-and-tested category, already worth some $4bn dollars.