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Meals kits getting popular, but price is obstacle

Grocery stores and online retailers are starting to invest in meal kit delivery services, hoping to lure in customers obsessed with convenience.

Though increased competition has grocery stores jumping at the next trend, local business owner Kate Kennard said each service offers something for different customers. Kennard, a Centerville resident and owner of Kate’s Plate, launched her business about three years ago.

“There will be options for everyone,” she said. “We don’t provide frozen meals. I can direct them to someone who does do frozen meals, and there are other services for someone who wants to learn fully how to cook. We have a special niche, and I’m excited to see where everything goes.”

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Kate’s Plate offers local, organic food prepared and delivered to customers’ doors in time for dinner. She said the model works for people who want to eat healthy, fresh food from local Dayton sources. Two-portion meals are $16 per person, and four-portion meals are $14 per person. Customers can order meals like spicy black bean burgers, avocado BLT salad, carnitas street tacos and cauliflower rice summer skillet.

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“Every week, we deliver or you can pick it up locally,” she said. “My whole entire goal is to make it easier to eat well and fresh. And if delivery makes it easier for people do that, then that’s the model we’ll use.”

The meal kit service concept is fairly new, and only 19 percent of U.S. adults have tried a home delivery meal kit service like Blue Apron, Hello Fresh or Plated, according to data group Morning Consult. Of that group, 38 percent currently subscribe to a meal kit service. However 39 percent of those surveyed who have tried a home-delivered meal kit service used the service just once, and 26 percent used the service for less than a month.

The services aren’t retaining customers mainly because of hefty prices, the survey found. Approximately 49 percent of customers who canceled meal services cited expenses as the reason. More than half of millennials said the services were too expensive to budget into their monthly costs.

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Even with lingering cost concerns, meal kit offerings have room to grow, said Darren Seifer, an executive director and food consumption industry analyst at the NPD Group. Companies could get ahead by “proving their value to consumers,” he said.

It’s a trend that retailers and online giants are trying to capitalize on. Meal kits are a $2.2 billion industry, which is expected to grow 25 to 30 percent in the next five years, according to consulting firm Pentallect.

To compete with Blue Apron, Amazon is testing its own meal kit for a limited time in Seattle. The Amazon meal kits contain all the ingredients required to cook meals by the customer — and they’re available through Amazon’s grocery service, which costs about $15 monthly. Amazon grocery service members can purchase the meal kits for $8 to $20, and there are currently 17 test meals to choose from including roasted cod and tacos al pastor.

Blue Apron’s stock plummeted when Amazon announced it was testing meal kits, but the service still has a hold on the industry. Launched in 2012, Blue Apron offers family-style meals for $72 or two-person meals for $60.

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Even grocery stores like Cincinnati-based Kroger are trying to compete in the industry. The grocery chain, which employs 8,100 people in the Dayton region, started offering Prep+Pared meal kits in select stores in May. Meals are “fresh-made, chef-inspired, restaurant quality, easily prepared at home and affordable,” a company statement said.

“Kroger continuously looks for ways to make our customers lives easier and they have told us they want fresh, convenient and affordable meal solutions,” said Vanessa Egle, senior director of culinary strategy and development, in a news release. “With Prep+Pared, we’ve taken all of the work behind planning and preparing a fresh, delicious meal and made it easy to cook in just minutes.”

The meals take about 20 minutes or less to prepare, and costs range from $14 to $18 for two people. Meal items include: Japanese-Inspired Beef Bowl, Chimichurri Steak, Moroccan-Inspired Spring Vegetables, Creamy Chicken and Bacon Alfredo, and Chicken Enchiladas Rojas.

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