Peapod, Amazon and Meal kits

           Since Amazon’s acquisition of Whole Foods over the summer, many supermarket chains are making changes to acclimate to the new competition. Amazon’s entering into the grocery-retail space is impactful due to the breath of Amazon’s capabilities. Thomas Parkinson, co-founder of Peapod grocery delivery was quoted in an article published in The Wall Street Journal, “They are one of our first competitors who doesn’t really care about making money”. Amazon’s fearlessness may prove to cause some trouble for some grocery retailers. Many in response are making moves towards a more digital shopping experience, while others are making different choices. Peapod is beginning to develop meal kits—the new market in grocery shopping. Companies like Blue Apron are known for delivering fully prepped meal kits which include raw ingredients to make meals.

           Peapod, a grocery delivery service is beginning to create their own version. The issue with grocery delivery services is no company has truly been able to make money from it. Pardeep Elankumaran, co-founder of Farmstead, a grocery delivery service, was quoted in The Wall Street Journal “No one has ever done a good job in grocery delivery” further, Elankumaran says he hopes to make his company profitable soon—a goal not yet reached by many delivery companies. So, despite all the changes happening in supermarkets, none are particularly successful currently. A chief executive from Wal-Mart, Doug McMillion, was quoted saying, “I believe vast majority of grocery shopping will happen in stores for a long time”. Despite the company investing a great deal of money in online shopping services, people are able to admit that the digital age hasn’t quite taken over the brick-and-mortar supermarket business.

           So what does this all mean? Is digital the new wave? Or are Meal Kits going to become much more prominent? Currently, it’s too soon to tell for despite data indicating that online shopping will rise from 4% to 8% of grocery shopping. No company has been able to create a successful business model to meaningfully rival major supermarket chains.