Amazon's new meal kit is already selling to some Prime members

Yolanda Curtis
July 18, 2017

Amazon has not said exactly what it would do with Whole Foods' stores and other assets, but analysts and investors say the deal could upend the landscape for grocers, food delivery services and meal-kit companies. "You be the chef" for a business described in its application as a seller of prepared food kits.

Amazon may be entering the meal-kit market, with the company showing its hand by filing a trademark for the phrase: "We do the prep".

Josh Chadd a Seattle resident, confirmed to GeekWire that the online retailer is selling its meal kits in the city to select Amazon Fresh customers.

Meal kit sales have "mushroomed" to $5 billion, according to a report from consumer marketing research firm's Packaged Facts unit, thanks to entry from traditional grocers as well as disruptive delivery players like Blue Apron. Blue Apron holds the title as the largest meal-kit provider in the United States, followed by Germany-based HelloFresh. It also sliced its initial share price by a third, just a few weeks after Amazon announced plans to acquire Whole Foods Market for $13.7 billion.

Europe's largest meal kit service, HelloFresh, is still privately held but is reportedly planning to go public this autumn. According to research conducted past year by The NPD Group, only 3% of consumers, or 8 million people, have tried meal kit services - and about half of those quickly canceled their subscriptions. Until now, though, Amazon's testing of meal kits has carried no official label, slogan nor branding. Last week, Marley Spoon said it will soon begin selling Dinnerly, a more cost-conscious box of ingredients aimed at helping families cook up an affordable, but quality dinner.

But analysts also have expressed concerns over the long-term profitability of meal kit delivery services, and these doubts have hurt Blue Apron, the largest US meal kit delivery company, which has seen its stock tumble since it went public month. Packaged Facts calls the list of companies in the meal kit space a "food industry 'Who's Who" including, along with Amazon, Campbell Soup, Kroger, Martha Stewart, Peapod, Publix, Tyson and Unilever.

Amazon's planned service is identical to the one offered by Blue Apron, one of the largest meal-kit delivery services in the United States.

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