Is meal delivery better value than the grocery store?

Meal-kit service Blue Apron says it’s a better value than grocers like Whole Foods. We put it to the test.

Sally French, MarketWatch

Fresh, delicious dinners delivered to your doorstep at a reasonable price -- it’s a tantalizing idea and one that more startups are looking to make a reality. Most ready-to-eat or ready-to-cook meal deliveries range in the $10-to-$15 price-per-serving range, which you may consider either outrageously expensive or a good deal depending on your dining and shopping habits. Either way, it’s a fair bet that you’ll pay a premium for the convenience of having a high-quality meal planned out and the ingredients brought to you.

Doing the math ingredient-by-ingredient, we found Blue Apron to be 35% more expensive than Whole Foods.

But just how much of a premium are you paying? Dollar for dollar, here’s how meal-delivery service Blue Apron, which claims to be a better value than your local grocer, compares with shopping at Whole Foods WFM, -1.63%

Blue Apron: Better value than your local grocer?

We ordered a week’s worth of meals from Blue Apron, one of the longer running meal-delivery startups on the scene, which is available across 85% of the U.S. and serving up more than 2 million meals each month. The New York-based startup is in talks to raise money from investors at a valuation of around $2 billion and has been called one of the most innovative startups of the past few years. So outlook on the company is bullish. Blue Apron promises “exciting,” “seasonal” recipes for beginners and experienced cooks alike (all of which are available on its website for free), and farm-fresh ingredients from family-run businesses, all at a “better value than your local grocery store.”

Blue Apron, like other meal-delivery services, doesn’t disclose how much you are paying per item or, even, per specific meal. The cost averages out to $9.99 per person but you are charged per weekly order, which contains 6 meals for $59.94 (that’s the 2-person plan; the family plan is $139.84 per week, or $8.74 per serving).

Blue Apron tells you how much of each ingredient they are sending you and pre-measures ingredients to reduce waste. We weighed each ingredient and found that nearly all of them matched exactly the amounts Blue Apron listed. One major mishap occurred, though: We were missing one yellow onion. (Customer service offered us a $9.99 credit for the missing onion.)

The Blue Apron vs. Whole Foods smackdown

(1:39)

Blue Apron says it's a better value than grocers like Whole Foods. Dollar-for-dollar, we put it to the test.

Is Whole Foods actually more expensive?

Blue Apron did its own price comparison research and claims that, on average, it can deliver ingredients for less than 60% of what your grocery store charges. So we headed out to the local Whole Foods to put that to the test.

Whole Foods aka Whole Paycheck is hardly a budget grocer and is known for high-quality organic goods and produce, so we felt the comparison would be fair. Plus, Whole Foods says that any produce items priced by weight it will cut down to exactly the amount you need -- if you only want to buy a half-bunch of asparagus, you can ask a worker to portion that out for you.

Meal-kit service Blue Apron says it’s a better value than grocers like Whole Foods. We put it to the test.

We priced out the exact same ingredients (or close substitutes) and then hit the calculators to find out how the cost of each meal would compare to Blue Apron’s average of $9.99 per person.

Orecchiette Pasta with English Peas, Pecorino Cheese & Mint

Ingredient	Amount for 2 Servings	Whole Foods price
Orecchiette Pasta	8 ounces	$1.09
Pea Tips or Bok Choy (Whole Foods did not have pea tips, so we priced out bok choy as a substitute)	3 ounces	32 cents
Garlic	1 head	90 cents
Lemon	1	89 cents
Red Onion	1	63 cents
English Peas or Snap Peas (Whole Foods did not have english peas so we priced out snap peas as a substitute)	½ Pound	$2.49
Mint	1 Bunch (weighed at 0.3 ounces)	60 cents
Part-Skim Ricotta Cheese	½ Cup	$1.84
Grated Pecorino Cheese	⅓ Cup	$2.44
WHOLE FOODS MEAL COST:		$11.20, or $5.60 per person

Flat Iron Steaks with Ramps, Fingerling Potatoes & Shaved Asparagus Salad

Ingredient	Amount for 2 Servings	Whole Foods price
Flat Iron Steaks	2 (weighed at 9 ounces)	$5.62
Fingerling Potatoes (Whole Foods did not have fingerlings, so we priced out jewel potatoes as a substitute)	6 Ounces	86 cents
Asparagus	½ Bunch (weighed at 3.1 ounces)	$1.55
Ramps (Whole Foods did not have ramps, so we priced out green onions as a substitute)	½ Bunch (weighed at 1.27 ounces)	$1.49
Lemon	1	89 cents
Chives	1 Bunch (weighed at 0.25 ounces)	49 cents
Dill	1 Bunch ((weighed at 0.28 ounces)	55 cents
Butter	4 Tablespoons	50 cents
Shallot	1 (weighed at 1.87 ounces)	58 cents
Crème Fraîche	2 Tablespoons	60 cents
WHOLE FOODS MEAL COST:		$13.13, or $6.56 per person

Turkey Kibbeh with Cucumber Salad & Mint-Yogurt Sauce

Ingredient	Amount for 2 Servings	Whole Foods price
Ground Turkey	8 ounces	$5
Bulgur or Quinoa (Whole Foods did not have bulgur, so we priced out quinoa as a substitute)	½ cup	$1.12
Plain Greek Yogurt	½ cup	$1.59
English Cucumber	1	$1.99
Lemon	1	89 cents
Yellow Onion	1 (We were missing our Blue Apron yellow onion, so couldn’t weigh it. We assumed a 6 ounce weight)	63 cents
Mint	1 Large Bunch (weighed at 0.63 ounces)	1.25 cents
Parsley	1 Large Bunch (weighed at 0.42 ounces)	83 cents
Pine Nuts	2 Tablespoons	$1.87
Dried Apricots	1 ounce	78 cents
Turkey Kibbeh Spice Blend (Za’atar & Aleppo Pepper)	1 Tablespoon	$4.27
WHOLE FOODS MEAL COST:		$20.22, or $10.11 per person

In total, the same amount of ingredients at Whole Foods would cost $44.55 -- that’s $15 less than the $59.94 Blue Apron price, making it a 35% premium to get those meals delivered to you.

However, if you look at each meal individually, there are wildly different price differentials: The pasta dish at Whole Foods comes out to nearly half the price of Blue Apron (a 78% premium), while the turkey dish -- which features a pricey spice blend and a few more ingredients than the other meals -- was slightly more expensive at Whole Foods.

That price difference often depends on Blue Apron’s suppliers.

“Blue Apron has built its own grocery distribution platform where we work directly with hundreds of family-run farms and artisans to remove waste from the supply chain, and in turn, pass that savings along to our customers,” said Blue Apron founder and CEO Matt Salzberg. “These direct relationships also allow us to get food to our home chefs faster and fresher than what is available at their local grocery stores, and give them access to hard-to-find seasonal specialty produce (e.g. pea tips, green garlic and watermelon radishes) nationwide.”

Bottom line: A 78% premium for a pasta dinner doesn’t seem worth it. No one said meal delivery would be cheap, but Blue Apron does say that its meals are a 60% better value than grocery shopping -- which is hard to believe from these three examples.

“When shopping for ingredients at a grocery store, you often have to buy far more that you need for a recipe and much of that food goes to waste,” Salzberg said.

Blue Apron’s portioned ingredients are supposed to save you money, but that 60% figure assumes leftover ingredients go to waste. That might be the case for unique, perishable foods but doesn’t make sense when it comes to basic pantry items like pasta. Of the 30 ingredients in our three meals, only two were both perishable and unavailable to be purchased by weight: the herbs and crème fraîche (though herbs can be easily reused, frozen or dried). Adding in the full cost (versus the by-weight cost) of those items at Whole Foods, the grocery total would come to $51.18, which is still a few bucks cheaper than Blue Apron.

The Blue Apron meals were all delicious, though the portions varied -- the pasta dish was more than enough for 2 people, while the steak dish left us ransacking the fridge for leftovers. So if you do decide the convenience is worth that extra cost? Order the meals with interesting spices, unusual ingredients and lots of them. Otherwise you’re better off taking your paycheck, Whole or not, to the grocery store.

Canada's Freshii plans tie-up with U.S. retailer in 60 days

BY AMRUTHA GAYATHRI AND SNEHA BANERJEE

Canadian fast-casual restaurant operator Freshii is planning to announce within the next two months a tie-up with a large U.S.-based retailer to open its eateries inside the retailer's stores.

The retailer has a "very sizeable real estate footprint and access to thousands of customers coming in everyday," Freshii Chief Executive Matthew Corrin said, but declined to provide details.

Corrin drew eyeballs last month with an open letter to McDonald's Corp (MCD.N) in which he urged the fast-food operator to co-brand a Freshii outlet. He promised that such a move would boost the outlet's same-store sales by 30 percent and its annual profit by $250,000.

"We have spoken to other fast-food giants and other big-box retailers and we will be announcing within the next 60 days our first roll out partner," Corrin told Reuters on Wednesday.

Corrin, 33, worked at the marketing department of fashion designer Oscar de la Renta in New York before moving back to Canada. He launched Freshii in 2005 after he found very few healthy and affordable eating options in the country.

Freshii, which offers wraps and quinoa bowls, and uses kale liberally in its salads, has become a household name in Canada with consumers increasingly looking for healthier eatout options.

Fast-casual chains such as Freshii are also wooing North Americans with their customizable menus and pocket-friendly prices. A string of U.S. fast-casual chains including Shake Shack Inc (SHAK.N) and El Pollo Loco Holdings Inc (LOCO.O) have listed their shares within the past year.

U.S.-based Noodles & Co (NDLS.O), which went public a couple of years earlier, said on Wednesday it would expand into Canada with its first restaurant in Toronto, scheduled to open next week.

Corrin said he was not currently looking to list Freshii on the public market and has no plans of selling the company either.

The company operates 160 restaurants in 13 countries including the United States and in Europe and the Middle East.

Freshii has been opening two restaurants every week on an average this year, and will continue that rate of expansion for the rest of the year, a company spokeswoman said.

Sales at Freshii in Canada rose nearly 28 percent last year to C$26 million ($21 million), versus an average 7.5 percent growth rate at Tim Hortons and McDonald's - the top two restaurant chains in the country - according to data from restaurant consultancy firm Technomic.

Wal-Mart offers a peek at robot grocery pickers and other innovations

Submitted by The City Wire Staff on Wed, 06/03/2015 - 6:39pm

story by Kim Souza
ksouza@thecitywire.com

If there is a measure for how focused Wal-Mart is on using technology to dig deeper into the pockets of consumers, this may be it: 2,500 Wal-Mart employees at “labs” in California and Bentonville tests hundreds of innovations at any given time around the globe. Many of those tests geared toward improving the shopping experience for Millenials and other demographic disruptors.
Wal-Mart’s United Kingdom-based business ASDA just launched a fully-automated collection point for online grocery pickup for shoppers in the United Kingdom. It’s the first of its kind for Walmart ASDA given that it’s just a collection point for online orders that are picked at nearby stores and dropped off at the distribution hub within minutes of the customer’s desired pick up times.
Kieran Shanahan, vice president of grocery home shopping at Walmart Global eCommerce, demonstrated how the new pickup model works at a media session Wednesday (June 3) as part of Wal-Mart shareholders week in Bentonville.
He said shoppers start their orders online either by phone or desktop devices. They pay online and select a convenient pick up time. They notify ASDA by alert when they start toward the destination. They scan a QR code into the kiosk upon arrival and their order is dispensed with seconds. The frozen food is bagged separately and kept cold. Fresh food is bagged together at the correct temperatures.
Shanahan said the collection point is fully automated with robots that dispense the orders which are loaded by the drivers who bring the orders from the nearby stores. He said the launch was just a week ago and if the format proves successful it will be replicated.
Grocery pick up is being tested in five U.S. markets now by Wal-Mart and in all Sam’s Club. The team in San Bruno, Calif. – home of @WalmartLabs – has fashioned a more streamlined check-in process which Mobile Check. Eytan Daniyalzade of @WalmartLabs demonstrated this new feature. He said one thing they noticed with grocery pick-up was that the time spent waiting to retrieve their order could be shortened to improve the overall experience.
He said the frozen food many times is kept a long way from the pick-up station and it can’t be bagged early for food safety concerns. Daniyalzade said with Mobile Check-in the shopper notifies the retailer when he’s leaving for the store by selecting a prompt on the app. When he arrives in the parking lot he’s sent a message that his order is being picked. By the time he arrives at the pickup station the order should be there or within seconds.
“We are testing this now. When we nail this down on a service perspective it will be rolled out,” he said.
Wal-Mart is also working on geo-mapping its stores in the mobile application so shoppers who activate the instore mode while shopping can type in an item such as “toothpicks” and the map will show them the aisle and map the location out for easy retrieval, according to Justin Toupin of @WalmartLabs.
Geo-mapping is being tested in 10 stores, including Store 100 in Bentonville. He said the tech team is working with store operations to implement the store layouts more broadly. They are doing it without RFID, a spokesman said.“The full store map serves like a personal shopping assistant,” Toupin said.
Wal-Mart also has worked on a responsive design to its website and mobile application that allows users more flexibility with screen display. The new design is now part of Walmart.com’s check-out page and will gradually be integrated throughout the site.

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Lastly Sam’s Club gave reporters a glance at its “Data Cafe” which is a high tech center that crunches data from 100 different sources to help the clubs and stores with merchandising, tracking promotions, heading off logistics delays and other operational issues.
One application of the data gleaned is to track return trips and then tweak the promos sent to the club member that reflects items they will more likely choose rather than just generic and random offers. The retailer said this focused marketing approach is helping drive more sales from repeat shoppers.

8 Ways to Connect Food Stores to Millennials

Here's how to become the destination for Gen Y, once they're ready to form families and consume more.

June 1, 2015

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Originally published in the free, weekly e-newsletter, Facts, Figures & the Future.

The closer the Millennial connections, the brighter the prospects for supermarket retailers. Grocers that understand and serve them better than competing channels should be poised to stem share erosion, possibly reverse it, and become destinations of choice when Millennials marry and have babies at later ages. 

Give Whole Foods Market credit for being open about its plan to develop a sister chain of smaller, tech-rich stores with lower prices to be more affordable to younger shoppers - this tech-savvy, food-adventurous, but financially strained cohort of 80 million. Wall Street investors did punish the stock price at first over fears of cannibalized sales and margins, but Facts, Figures & The Future (F3) sees the WFM initiative as a potentially innovative step to resolve the Millennial challenge facing food chains today. Our view is supermarkets nationwide must acknowledge Millennial differences and life challenges, and alter businesses to be part of their food futures - whether or not the new WFM format turns out to be a winner.

F3 has eight steps in mind for supermarkets to consider:

1. Put Millennial workers in the ears of corporate leadership.Keep stores sensitive to their trip planning and shopping patterns, their use of mobile, apps and other technology, what they want from stores and websites, what they share and say on social media about foods, beverages, brands and stores. This also means hiring more Millennials into growth positions. See our related story. (5 Key Culture Steps to Successfully Recruit Millennials)

2. Curate selections. Create excitement in line with Millennials' adventurous palates, since they help spearhead food trends such as artisanal, ethnic, local and organic. Do this within smaller store formats to help them be more efficient picking up satisfying choices.

3. Show you have their safety and health in mind. Prominently display antibiotic-free and grass-fed meats, locally farmed fresh foods, organic choices, and less-processed foods in center-store, especially in baby foods and pet foods. Also, have a great recall system.

4. Keep their fun in mind too with grocerants, craft beers on tap and in growlers to go. Be cool. Spur Millennials to take a quick brew and food break, and supply inventive drinks for playoff parties and other fun beer-based events at home. Where grocerants are available - at chains such as Wegmans and Hy-Vee - nearly 60% of respondents to a SupermarketGuru poll say they eat there because it's convenient, 36% because they can food shop on the same trip, 32% because it tastes good, and 31% because it costs less than a restaurant.

5. Communicate the way they want - run omnichannel. The generation that lives on Seamless and GrubHub with restaurant food wants similar convenience from supermarkets - to order via website or app, then pick up or have food delivered. For store shopping, power has shifted to mobile-toting Millennials who research food products, compare prices, find sales and coupons, and plan to recipes as they gain confidence in the kitchen. 

6. Step up the pace - when introducing new foods, serving Millennials face-to-face or via technology, running checklanes with safer high-tech payment systems, staging themed events, and executing store pickup and delivery. Joe Gagnon and Jason Dorsey, co-authors of The Aspect Consumer Experience Index, say "Millennials, mobile technology and social media are colliding to radically change customer service as we know it. This new generation will not tolerate waiting in lines...or being treated like a number. Companies that do not adapt risk obsolescence...." The study says 36% of Millennials would contact a company more often if texting were an option, and 47% of them regularly pay for goods via smartphone.

7. Have transparent sustainability policies and support charities. Be in sync with Millennials who want to make the world a better place.

8. Be affordable. Millions of this generation are under-employed and burdened by college debt and high rents.

Grocerants Have Room to Grow: SG Quick Poll

In a new survey fielded by SupermarketGuru.com, U.S. adults express their views on grocerants, their visit frequency and eating patterns out-of-home.

March 18, 2015

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Americans enjoy the grocerants they know (sit-down eateries inside or adjacent to supermarkets), but the uncommon format has yet to mature.

This term - defined ten years ago by Christopher Muller, Ph.D., Professor of Practice at Boston University's School of Hospitality Administration - has been brought to life and refined by operators such as Wegmans, Hy-Vee, Lund & Byerly's and Mariano's. These chains are gaining image and share of the 40 percent of food dollars spent on out-of-home consumption in the U.S., according to data on food consumed away from home from the USDA Agricultural Research Service. 

In a new survey fielded by SupermarketGuru.com, U.S. adults express their views on grocerants, their visit frequency and eating patterns out-of-home.

Two-thirds of respondents (68 percent) say they're aware of a nearby grocerant. Yet just 10 percent call it a magnet that causes them to shop in that supermarket "always" or "often"; another 14 percent say it "sometimes" pulls them in while most (55 percent) say it doesn't at all.

The takeout market grocerants vie for is robust. Three out of ten respondents (29 percent) eat takeout six or more times a month, 20 percent do so three to five times per month, and 40 percent do so once or twice per month; 11 percent not at all. Dinner commands the most takeout interest (93 percent), lunch is second (42 percent), and breakfast and snacks tie for third (15 percent), in a question where respondents could cite multiple takeout occasions.

The most frequent resource for takeout is restaurants followed by the supermarket's prepared food section at the deli and finally the grocerant.

In the limited markets where grocerants are available, nearly 60 percent of respondents say they eat there because it’s convenient, 36 percent say they can food shop on the same trip, 32 percent say it tastes good, and 31 percent say it costs less than a restaurants. Other less common reasons are comfort, easy place to sit without feeling rushed, easy to park, and the family enjoys it.

Survey takers describe that overall "restaurants satisfy them the most, by a lot" (30 percent) or "satisfy them the most, by a little (17 percent).  Next is the prepared foods section "by a lot" (11 percent) or "by a little" (5 percent), followed by grocerants "by a lot" (4 percent) or "by a little" (2 percent).  Some 16 percent said "none" of these eateries satisfy them, while 14% say "there is not much difference - they're about the same." 

Over half US grocery store purchases are highly processed foods, says study

Americans are buying more processed foods than fresh. (AP Photo)

Although organic foods sales are on the rise, don’t fool yourself: We’re still loading up our shopping carts with chips and cookies. 

A new study from the American Journal of Clinical Nutrition has found that almost two-thirds — 61 percent — of American grocery purchases are highly processed foods. In addition, 77 percent of American grocery purchases consist of either moderately or highly processed foods.  

This means the average American consumes more than 1,000 calories of processed foods every day.

But don’t get too nervous and start cleaning out your pantry: The word processed, according to USDA standards, is defined as “a retail item derived from a covered commodity that has undergone specific processing resulting in a change in the character of the covered commodity.”  By this definition, pasteurized dairy products, like milk, yogurt, and cheese, as well as frozen vegetables, are processed foods: not just your usual suspects like Oreos and Twinkies.

“Highly processed food purchases are a dominant, unshifting part of U.S. purchasing patterns yet may have higher saturated fat, sugar, and sodium content compared with less-processed foods,” the authors concluded. “Wide variation in nutrient content suggests food choices within categories may be important.”

Omni-channel by any other name

Jun 2, 2015

^by Craig Rosenblum

Partner, Willard Bishop

The term “omni-channel” has become so pervasive that it may soon be added to the list of phrases found in the corporate game, Buzzword Bingo. While there’s no disputing its importance, I find it odd that there are so many interpretations and arguments over the term. Some see omni-channel as digital engagement, while others think it has more to do with order picking, home delivery, and/or pick up. Still others argue that omni-channel is a misnomer because it’s not technically omni (all) channels. If I sell my goods in a physical store and through my proprietary mobile app, but don’t offer hardcopy catalogue sales, is it really omni-channel? What about the likes of vending, multi-level marketing, fund raising, etc.? These are all viable channels in the conventional sense. And if I’m engaged in omni-channel, does that mean there are no more channels for which to expand?

Maybe omni-channel is directionally accurate, and the term “omni-channel” is an error in nomenclature. Perhaps it’s nothing more than jargon gone bad. I propose — at least for the sake of this article — that we toss the term aside. If we call it something more relative, like integrated promotion, shopping and fulfillment, I believe we can avoid confusion. However, instead of starting a movement for changing the term, I will ride the horse the direction it’s going, and hopefully provide a deeper dive into the frequently misunderstood areas.

Integrated promotion, shopping and fulfillment (a.k.a. omni-channel)

First, I’ll address fulfillment since there seems to be more agreement as to what this entails. Fulfillment is simply receiving an order, filling it, and getting it to its final destination. This would include orders that are filled by the shopper (traditional in-store), picked in a DC, dark store or at the store level. Delivery would include parcel, home delivery, drive-up/drive-through or may be provided by a concierge-type service such as Instacart.

Integrated shopping is also fairly straightforward since shoppers can select the shopping paths, or combinations thereof, that best suit their needs. This includes in-store, online and mobile apps.

Promotion is the trickiest element because it requires an expanded mindset — one that goes way beyond our conventional understanding of what promotion actually means. Old school promotion meant “deal.” Promotions, just a few years ago, included such instruments as TPRs, BOGOs, circulars, displays and coupons. But promotion in an omni-channel environment is much more complex because promotion and engagement are rapidly becoming synonymous. So much so that we may need to segment promotions further by defining them as direct or indirect.

Image courtesy of Willard Bishop

As illustrated above, direct promotional platforms include the items listed in the outer ring. These are the platforms that deliver digital offers such as coupons and circulars. These are also the items that can easily be localized — even personalized — based on the needs of the shopper and their behaviors. Similarly, Twitter and Facebook offer an avenue for digital promotions, although they are currently less personal.

The other social media services are considered indirect promotions. These are more like commercials; however, they can be linked to direct promotions. For example, a shopper finds a recipe for spare ribs on Pinterest, and then jumps to YouTube to watch a video on barbeque prep and grilling. Inside the YouTube and Pinterest posts there are links to a retailer’s site, which offers special promotions on ribs, charcoal and related picnic items.

At the center of the digital universe is the retailer’s website. All the direct and indirect promotions represent opportunities to transform the user into a buyer, and ultimately into a loyal patron — one that helps to promote your banner across other social platforms. While the retailer’s website is currently the primary path to purchase, their proprietary mobile app is likely to become the hero, since shoppers are likely to spend more than four times more time in a retailer’s app than in their browser.