Following last year's acquisition of Whole Foods, Amazon continues to explore the Meal Kit Market.
Amazon continues to move through the Grocery Category in 2019. Between the acquisition of Whole Foods, and the inception of AmazonFresh and AmazonGo, the growth has been exponential. Amazon's exponential growth continues as they are now exploring the U.S. Meal Kit Market, which research firm, Packaged Facts, tallied sales of $2.6 billion in 2017, and an estimated $3.1 billion in sales in 2018.
For those unfamiliar, meal kits are made up of ready-to-cook ingredients for consumer convenience by providing health-conscious meals without wasting food. These meal kits can be found in grocery stores like Kroger, or can be received weekly for a fee via membership, such as with meal delivery service, HelloFresh.
Now, Amazon has launched its own Amazon-branded meal kits at Whole Foods during a time where meal kits are back on the rise. Packaged Facts pointed out that subscription meal kit providers - like Blue Apron, HelloFresh, and EveryPlate - struggle with a conflicting dynamic prompted by the rise in online grocery shopping and consumers’ increased demand for instant convenience. These challenges demand that meal kit companies tweak their business models or prove unsustainable. As they currently exist, delivery kits need an alternative way to reach customers because meal kits alone have a much larger interest than what the delivery side offers.
Amazon was poised to capitalize on this by cutting out the middleman and going straight to Whole Foods. Amazon is predicted to further develop Whole Foods' ability to prepare customized meals for convenient pickup and delivery. With a $15 billion bump in annual revenue after the acquisition, the e-commerce giant certainly has the financial incentive and the infrastructure to give meal kits the business model they need.
Amazon is never looking to follow the next trend but to recreate the grocery experience for consumers online and offline. Adding meal kits into the mix of Amazon’s already excelling position in the grocery market would be another step in creating the “Amazon Grocery Ecosystem” in the homes of its consumers.
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