Salted has ditched the traditional direct-to-consumer model for meal kits and is instead teaming up with Whole Foods and other grocers to sell meal kits inside physical grocery stores.
Starting today, shoppers in the Los Angeles area can pop into Whole Foods stores in Venice, West Hollywood, Downtown LA and Playa Vista to pick up a Salted meal kit. The Whole Foods partnership comes a couple of months after Salted began selling its meal kits in Gelson’s. By the end of 2018, Salted aims to be in 2,000 stores.
Each Salted meal kit has seven to nine ingredients, which come packaged in four-by-four-inch cubes, along with a recipe and a link to a how-to video. One kit, which has a shelf life of two weeks, costs $12 and can feed up to two people. With Salted, you get everything but the meat, which you could quickly pick up on aisle whatever.
“This concept of cooking kits is not going to exist under the confines of the Blue Apron, Plated model,” Salted CEO Jeffrey Appelbaum told me. “There are lots of questions around unit economics and retention of subscribers. For most of these businesses it’s very low and what you have is this perfect storm where these direct-to-consumer businesses are spending hundreds of millions of dollars educating the market on the convenience of kits.”
There are three main problems with the way the direct-to-consumer model functions, Appelbaum said. For one, it generally takes too long to actually make the meal (Appelbaum says you’d have to try really hard to spend longer than 30 minutes making a Salted meal). The second common qualm is that the subscription aspect of a lot of these services results in food ultimately spoiling in the fridge.
Third of all, shipping a refrigerated box “ends up being a big environmental footprint,” Appelbaum said. “To their credit, [Blue Apron and others have] made it easy for people to recycle, but that’s certainly not commonplace.”
Last June, Salted launched SaltedEats, a sort-of Blue Apron-style product minus the subscription. Salted initially went ahead with the direct-to-consumer model before ultimately ditching it.
“There was this kind of eureka moment where we realized there was a bigger opportunity working with retailers with this massive brand footprint,” he said.
When it comes to grocery shopping, Appelbaum pointed to the fact that, although online grocery shopping is increasing, there are still a ton of people who shop IRL. Shopping at physical grocery stores still makes up 80 percent of the grocery shopping market, according to a Food Marketing Institute and Nielsen study earlier this year. He went on to say that retailers see what’s happening with direct-to-consumer food businesses and are wondering what their kit strategy is.
“What we’re doing with Whole Foods is innovating and trailblazing and they wouldn’t be doing it unless it had the opportunity to be a national thing,” Appelbaum said in response to my question about a rollout of Salted in Whole Foods stores nationwide.
But Salted is not the only meal kit company taking its business to traditional grocers. Whole Foods also has a partnership in place with vegan meal kit company Purple Carrot in one of its stores in Dedham, Massachusetts.
“At our modest scale, we’re already leading this category,” Appelbaum said. “We’re having a lot of conversations with retailers that would put us in hundreds of stores in short order.”