Tyson joining meal-kit upsurge

New brand going online, in stores

Tyson Foods Inc. is rolling out a new line of meal kits for purchase online and at grocery stores to meet a growing demand for partially prepared meals that require limited preparation.

The meal kits, called Tyson Tastemakers, include measured ingredients, fresh vegetables and seasoned meats. They are available at a few grocery stores in Texas and online at Jet.com or Amazon. Tyson Premium Pairings are also available, which are chef-inspired prepared meat options without vegetables or side items.

Tyson is the first national consumer packaged-goods company to bring the protein meal kit model to the supermarket, said Megan Huddleston, vice president and general manager of Tyson's Fresh Brands.

After taking into account negative consumer reviews for meal delivery services, "we eliminated the complicated subscription model while still meeting consumer demand for time-saving meals that deliver on quality and freshness," Huddleston said.

Consumers have given mixed reviews to Blue Apron, a New York-based meal delivery service, with negative reviews largely attributed to supply chain and logistical errors. Some subscribers reported rotting food in packages on their doorsteps.

In spite of negative reviews, about a quarter of all American adults have tried a meal kit and 70 percent, after their first purchases, continue to buy the kits, according to Nielsen research.

Other companies are cashing in on similar products.

Kroger launched its Prep + Pared kits last month. Whole Foods recently began selling meals kits prepared by a new company called Salted. Vice Media announced two weeks ago that it would sell $20-$40 meal kits named after the media startup's company, Munchies, with recipes developed by Chef Matty Matheson, star of Viceland TV channel's Dead Set on Life.

Meal kit sales at U.S. grocers totaled $80.6 million last year, up 6.7 percent from the year prior, according to Nielsen data. On the basis of the market's reaction to the meal kit method made popular by food subscription services, sales are prepared to rise in the years to come.

Researchers say about 19 million Americans will have tried meal kits by 2021, with 11 million making regular orders by then, according to a study by Morningstar.

Blue Apron is pitching an initial public offering in an attempt to raise as much as $586.5 million. The New York-based meal delivery company plans to price its shares between $15-$17 and expects to be soon valued around $3 billion.

Martin Thoma, principal at Thoma Thoma marketing agency, saw Tyson's move into the meal kit market as natural and expected. He said it's an opportunity to continue Tyson's vision of reinventing its brand and the public's perception of the company.

"Tyson's marketing more of a day-in, day-out meal," Thoma said, it's "clearly a push into a new niche."

This move could also be a potential risk for the nation's largest meat company.

Compared with Blue Apron, Tyson isn't known for organic, fresh or gourmet foods, which could be a factor for consumers who prefer supporting a startup line over an established company, Thoma said.

"[As a consumer] I may go toward a more special option," he said. "And that's going to be a current that Tyson is swimming against with this product."

Business on 06/21/2017

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