Big Food Companies Hone in on Meal Kit Territory

Campbell Soup, Hershey and Tyson Foods vie for their share of the stomach in the dinner-in-a-box market.

December 09, 2016

SAN FRANCISCO – Big food companies are diving into the meal kit market, as Tyson Foods, Hershey and Campbell Soup are working to grab a share of the pie, the Wall Street Journal reports. The trio has started working with online deliverers to help consumers who want easy ways to cook at home.

The companies also want to bring back consumers who are drifting to startups like HelloFresh and Blue Apron that tout farm-to-consumer ingredients. However, the entrance of these three food company giants could oversaturate a small niche that already might be too crowded.

In 2016, six meal delivery companies have shut down or restructured after failing to regain startup costs. “There has been a mass rush of people hoping to find the Uber for food,” said Gregory Chang, who invested in Din, which went out of business in October. “There are a lot of points along the value chain where things could fall apart.”

Right now, the meal-kit market is tiny—3% of consumers have tried such a service, according to the NPD Group. But food makers have an advantage, given they already have a stable of products. “Meal kits are a tactic in the strategy needed to combat the bigger threat of e-commerce and online grocery,” said Diana Sheehan, a director at Kantar Retail.

In September, Tyson Foods debuted kids via Amazon Fresh for chicken and beef. The company also sells a different meal kit line at supermarkets and convenience stores. Campbell’s uses Peapod to send meal kits featuring its soups. “It could be extremely profitable because Tyson already has the protein available in-house,” said John Anderson, who leads food and beverage research at Franklin Resources Inc.’s equity investment group.

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