Food Forum: The next generation of “fast” food

The home delivery of prepared meals may be the way of the future for grocers. By Susan Lee The business of food is facing a unique situation. A growing number of consumers are demanding healthy and environmentally friendly food, while others value convenience and deals above all else. Lack of trust in food safety and a recession that will not quit presents food producers with a hard choice, one that will leave behind a large segment of their customers if they choose one over the other. Recently, specialty supermarket Whole Foods introduced a winning formula in their push away from other major supermarket chains: their line of prepared foods and heat-and-eat products. While other super stores such as Walmart and Costco also offer prepared foods, along with organic and locally sourced produce, Whole Foods is unique in that many of its prepared and pre-cooked dishes are also made with organic and locally sourced produce and meats. The ease and convenience combined with trust in source and quality control of these prepared foods have allowed Whole Foods  to maintain its above-average prices even during recession years. However, with its sales projections flattening out, this premium grocer may need to seek out new revenue streams. The next logical step: make it even easier for shoppers to access organic and locally sourced meats and produce with home delivery. Yes, they do currently offer delivery for those who shop in their stores, but they have yet to sell on their website, other than to allow seasonal orders from local stores. Fresh Direct and Peapod currently offer some of this, but neither do it exclusively. A recent spate of online businesses such as Plated, Blue Apron Meals and Freshology have caught on to this concept, offering very high-end ready-to-cook or prepared meals for customers with specific needs. Some companies, including Eat Tribal and Chef’s Diet, go even further by offering specialty diet options, such as Paleo or Atkins plans. At $12 to $20 and up per serving/per meal, these services still remain cost prohibitive to the majority of consumers. Even at these premium price points, very few brands offer a wide selection of organic and locally sourced produce. With the home-delivery/prepared-meal market growing rapidly, surely this is where a major chain, such as Whole Foods, could discover a new consumer segment. With each store serving as a fulfillment facility with its ingredients at the ready and the ability to make deliveries, this is the next logical step. The initial challenge may be to engineer a front-end module for its shoppers that will take the guesswork out of planning meals in the most convenient and reliable fashion, but also manages to localize availability and timing. One surprising development could turn out to be that the big box stores, such as Walmart and Target, may actually be better equipped to roll out this new way of delivering food. They both have a robust online transactional infrastructure, as well as access to better transportation and delivery methods. The primary hurdle for these larger retailers would be their reputation for being the go-to for bargain hunters. If individual stores could develop new relationships with more local distributors of organic produce and free-range meats, these major brands might end up seeing a shorter ramp-up period. Of course, there is also the possibility that Whole Foods or one of the other giant retailers might acquire startups, such as Plated or Blue Apron Meals. But again, their pricing structure would remain a barrier for Middle America, unless a major national chain could find economies of scale before launch. Perhaps big food’s players already have healthier and more convenient food in the pipeline for America’s dining tables with one swipe on a smartphone. Maybe a brand new startup is currently incubating at Harvard Business School as the next hot food portal that offers home delivery of these healthy meals. However it happens, consumers are finally ready for a truly healthier fast food that helps them also feel good about their environment and the safety of their food sources. Susan Lee is a project manager at Brand Union. She can be reached at [email protected].