3 Reasons Why Walmart Wants to Feed You Meal Kits

Consumer insights explain why the retail giant is getting into meal kits

“More than 80 percent of Americans don’t know what they will have for dinner tonight…scrambling to find a meal “puts pressure on a family,” said Tyler Lehr, a Walmart senior vice president.

This quote sums up why one of America’s largest supermarkets’ move[has moved full force] into the packaged food business. Walmart’s prepared meal-kits, already available in 250 locations, will expand to 2,000 more this year. Meal-kits for two are priced between $8 and $15 and are prepared in Walmart’s culinary innovation center.

Does this move seem curious? It shouldn’t; food has always been dear to Walmart, and the brand has been constantly working to improve the quality and reliability of the food it sells — It upgraded the quality of its beef to certified Angus and cultivate a sweeter variety of cantaloupe that can be sold year-round. The company also developed a better way to track the freshness of fruits and vegetables as they travel from farms to its shelves.

But why? Is it to siphon off restaurant-goers? Or compete against existing meal-kit brands like Blue Apron and Hello Fresh? Or is it to bolster its grocery business, its biggest source of revenue? The answer is all of the above.

In this post, we analyze consumer insights from social media conversations to help us understand why this move makes sense by looking at:

  • The rise of subscription boxes
  • Consumers’ growing preference for dining in
  • Steep competition in the grocery market

Meal in the mail

A decade ago, the term “subscription box” was essentially non-existent. People probably scoffed at the idea of meals arriving in the mail. In just a few years, the subscription economy has rapidly emerged as one of the fastest-growing retail segments, and a true industry disruptor. Nimble entrants have cropped up in every corner of the retail industry, and long-standing cornerstones like Walmart and Target have themselves entered the fold. Subscription boxes are now a micro-industry, and they show no signs of slowing.

Last year alone, subscription boxes attracted 11 million subscribers, and the industry has been growing 200% annually since 2011. And meal-kits made $5 billion in sales last year.

Consumer preferences and demands are constantly evolving but, luckily for brands, people flock online to talk about reviews and recommendations. And the social audience loves talking about subscription boxes. The dominant emotion expressed in the subscription box conversation was joy.

We know that people are excited different meal-kit services and discuss it on social, but can we figure out the exact reasons for their popularity Yes. On social, people discussed the convenience and taste of the meals and lauded them for being healthy.

But the rise of meal-kits is an offshoot of a larger trend: the growing consumer preference for eating at home instead of in restaurants.

Eating in..the new dining out?

People are fond of repeating the old saw “you are what you eat,” but new consumer eating habits may mean we need to update the saying. You are what you eat, sure — but, increasingly, you are where you eat as well.

This approach means turning over a new leaf for many Americans, especially considering 72% of them visit a quick service restaurant for lunch and 20% enjoy visiting a full service restaurant with table service once a week.

So what’s causing the change to eat at home rather than go out? Several different reasons, but they all start with awareness and mindfulness towards a healthy diet and its integral role in daily life.

Attitudes about healthy dietary choices are changing, and the relevant stakeholders in this conversation — be it online grocers, subscription meal kits providers, or food retailers — must pay attention.

Americans are increasingly concerned with the origins, sources, and ingredients of the food they eat, and we see habits change as consumers buy into the idea that managing health starts with good food. Being in control of consumption is reflected in people’s choices of dining in or going out to eat.

Social conversations vouch for this. Dining out was discussed more frequently from 2010 until 2015, but over the last year, staying in and ordering takeout was talked about more than it was in previous years.

Surveys also show that millennials are twice as likely to eat at home as their older counterparts. According to USDA, More than half of all food commodities obtained in the U.S. between 1994 and 2008 were for at-home consumption.

What was once confined to the margins of the American food conversation,  the organic conversation has officially taken center stage in the US. For those who may not have access to and/or cannot afford farmers markets produce, big retail chains like Walmart can always be relied upon.

Brands know that planning meals can be time-consuming — making detailed lists to shop online can seem tedious  when compared to neatly organized supplies, along with recipes for the entire week’s meals arriving at the doorstep like clockwork.

Companies like Blue Apron, Hello Fresh, and Plate Joy have transformed the dining in experience by eliminating meal planning and shopping altogether. The success of these services and a market rapidly growing from $1.5 billion has prodded retail giants like Walmart to tap into the industry.

Conclusion

There is a confluence of factors pushing people toward healthier food choices — the notion that eating out is unhealthy, increased awareness of the benefits and easier access to organic foods, falling prices of different eat-at-home foods, and make-at-home meal kits, and busy lifestyles that has made meal times the only time families get together.

This consumer insight into changing diets and consumption patterns can help CPG brands understand their consumers and their needs better. Shoppers flock to social media to talk about their food choices. Are brands listening?

To get a full report on consumer packaged goods, click here.

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