Chick-Fil-A Pecks Its Way Into The Meal Kit Game
If you're in an Atlanta-area Chick-fil-A this week, you might notice something different on the menu: raw chicken and other ingredients packaged to take home and cook yourself.
Chick-fil-A is the first fast food-chain to sell meal kits. The Atlanta-based company is testing the idea at 150 local locations for a few months before deciding whether to expand nationally.
And the food industry is watching the experiment closely.
Stephanie White comes to Chick-fil-A most days. She says she would definitely be interested in the meal kit. "I don't know how to cook. So as long as they can walk me through it, yes, I'd definitely use it," she says.
The company is starting with just five different recipe options, although a Chick-fil-A chicken sandwich isn't one of them.
Instead, the kits lean towards straightforward, family-style favorites like crispy Dijon chicken, chicken parmesan, chicken enchiladas, chicken flatbread and pan roasted chicken with greens. Naturally, it's all chicken, and that's no accident.
Michael Patrick leads the company's Mealtime Kit program. "We're good at serving high-quality chicken," he says. "If you want chicken in your meal kit, we want you to think of Chick-fil-A."
It's an interesting play by the restaurant, because while the American meal kit market has swelled to more than $2 billion, it hasn't been easy to make a profit.
First of all, meal kits are expensive to buy for many consumers. On average, two servings typically cost about $20. Chick-fil-A's two-serving kits are a bit cheaper at $15.89.
Darren Seifer, a food and beverage industry analyst with the NPD Group, called price the biggest pitfall of the industry. He says according to his research, more than half of consumers who stopped using meal kits said they did so because of the cost.
Another pitfall? It's an expensive business to be in.
"What we seem to be finding in this industry is that maybe this paradigm isn't exactly sustainable as a standalone business," Seifer says.
He's talking about meal kit companies that built distribution networks from scratch, like Blue Apron, and how they have struggled: "We've seen Blue Apron has yet to post a profit. We've seen others shut down and we've seen others get gobbled up by larger retailers."
Chick-fil-A noticed that, too.
Patrick says Chick-fil-A has an advantage. "Customers are already coming to us for food, so the opportunity to be convenient — solve two meal problems in one visit — is the definition of convenience," he says.
The convenience of meal kits is appealing to people — no shopping or planning menus. But the subscription model many companies have used — paying in advance and getting a few meal-building kits delivered every week — can be a hard sell for people who are in a hurry or don't want to commit to a particular dinner three days from now.
Chick-fil-A's model is more flexible, says Patrick. "Tonight you're not going to go home and go, 'You know, what am I going to have next Wednesday?' Eighty percent of customers are figuring out what they're having for dinner [that night at] around 4 o'clock," he says. "We're solving that 4 p.m. problem."
Sagonda Ford is a healthcare consultant from south of Atlanta who travels a lot for work. She's a Chick-fil-A fan.
She says she's never tried a subscription meal kit because her schedule doesn't allow much advance planning.
The Chick-fil-A model sounds better to her: "If I'm here for lunch and I see that, I'd pick it up and then cook it later, just so I don't have to go to the grocery store."
Other meal kit companies have been trying to get themselves closer to where consumers are for this very reason. In the last year, both Plated and Home Chef have both been acquired by grocery stores. Blue Apron, Gobble and Hello Fresh have made partnerships with grocery stores so they can get their kits on grocery shelves.
Chick-fil-A has also tried to address other issues plaguing meal kit companies, like complaints about waste. Its meal kits don't have ice bags or extra boxes. They're designed to go quickly into the refrigerator and then fit in a kitchen trash can, explains Patrick.
Plus, the recipes are purposefully simpler, unlike some meal kits that offer more unique, exotic ingredients. "You pretty much know what's in the box," he says.
Brian Todd is president of the Food Institute, an industry research group. He said this is just another example of how the lines between restaurant food and home-cooked food continue to blur in the entire $1.5 trillion American food industry.
"Everyone is fighting for what we call that 'share-of-stomach,' " he says. "Restaurants are competing in supermarket space now and vice versa, where supermarkets even have restaurants within them now."
This is just the beginning for meal kits in the quick-service food industry, says Brittain Ladd, an independent strategy and food-supply-chain consultant. He has worked with several meal kit and other food industry companies.
"This is one of those seminal moments that have a way of sparking a big explosion, and I think that's what we're going to see," he says. "Chick-fil-A is the first, but I certainly don't believe they're the last. I absolutely think we're going to see more of this."