Morningstar estimates that Amazon will generate $9 billion in sales from AmazonFresh, its grocery delivery service, and other grocery sales this year, and more than double that business to $20 billion by 2021. Amazon already offers third-party meal ...
Amazon, just weeks after making a $13.7 billion bid to buy Whole Foods Market, is laying the groundwork to start a meal kit delivery service that could shake up the fledgling industry.
The Seattle-based company wants to trademark the slogan "We do the prep. You be the chef" for a business described in its application as a seller of prepared food kits. Amazon filed for the trademark on July 6, according to the U.S. Patent and Trademark Office.
Meal kit delivery services have been rising in popularity over the last several years as more consumers demand home-cooked meals made with the convenience of pre-measured ingredients and the aid of detailed recipes. But the industry still remains small, with only about 5 percent of U.S. households using the kits, according to market research firm The NPD Group.
Analysts also have expressed concerns over the long-term profitability of meal kit delivery services. Those doubts have hurt Blue Apron, the largest U.S. meal kit delivery company, which has seen its stock tumble since it went public earlier this month. Blue Apron shares fell 10.46 percent, or 77 cents, to close at $6.59 on Monday.
In the Chicago area, meal kit delivery companies include national brands and local options like Madison & Rayne, Meez Meals, Home Chef and Chef'd. In a sign of how focused some larger meal kit delivery companies are on Midwest expansion, representatives from HelloFresh, which is based in Germany, can often be seen in downtown Chicago, donning aprons and carrying tablets to sign up commuters for their meal kits on the street. Company representatives from HelloFresh and other meal kit operators in Chicago weren't available to comment Monday.
One of the concerns among industry watchers is that meal kit delivery services are too expensive, with meals generally topping $12 a serving. But that's where Amazon's entrance could help the market. Competition, especially from a juggernaut like Amazon, will bring down meal kit prices, NPD's food and beverage analyst Darren Seifer said.
In a report this spring, Chicago investment research firm Morningstar said meal kit delivery could be the key to driving online grocery sales, which are still relatively small compared with other categories of online sales. Morningstar estimates that Amazon will generate $9 billion in sales from AmazonFresh, its grocery delivery service, and other grocery sales this year, and more than double that business to $20 billion by 2021.
Amazon already offers third-party meal kits from Tyson through its AmazonFresh service. Amazon didn't return a request for comment.
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