Amazon Meal Kit

The growth of competitors in the meal kit industry continues with Amazon’s latest (and not unexpected) announcement that it will be launching its own meal kit delivery service. As of the end of July, the company is testing its new service in limited markets for AmazonFresh customers, including Seattle.

Amazon is offering approximately 17 different meals for these select customers to choose from, and they range in price from $14.99 to $18.99 for a two-person meal. Amazon doesn’t require customers to subscribe for weekly meal kits, something that companies like Hello Fresh and Blue Apron have continued, but instead offer one-time purchase options. Plus with Amazon, you can select the meal you want to prepare, instead of waiting and seeing what meals are delivered.

Amazon shook up the industries of both big grocery and meal kit delivery services with its recent acquisition of Whole Foods Markets, a popular upscale grocery store catering to health-conscious individuals who prefer natural and organic offerings. It seemed a natural fit that the online giant would try to launch its own meal kit service.

Shortly after the acquisition, Blue Apron, one of the leading brands, was the first in the industry to launch an IPO. Unfortunately, Amazon’s news (and potential market dominance) cast a shadow over the initial launch, and since then, the company’s stock has been struggling to live up to investor expectations. The stock fell once again when Amazon began offering meal kits in trial markets.

Amazon has a competitive advantage with its delivery infrastructure and massive customer base. It has around 85 million Prime subscribers in the United States, according to the latest estimate from Consumer Intelligence Research Partners. Plus, Blue Apron has struggled since its inception to make a profit despite exponential growth and increasing revenues, year after year. In recent years, Blue Apron has spent a lot on marketing, and creating a profitable food delivery service with all the complicated logistics to keep food fresh and appetizing hasn’t been cheap.

So what does Amazon’s new offering mean for other industry players?

Open Amazon Meal Kit

Early reviews for Amazon’s service are mixed. Amazon offers ingredients measured and packaged similarly to other meal kit delivery services, and recipe cards to get you started. But the meals are a bit simpler (tacos and corn on the cob for Amazon, compared to catfish with vegetables on a bed of rice for Blue Apron). If you are a foodie, you might find it lacking.

The company offers a low price point – about $15 for one two-person meal, compared to Blue Apron’s $59.94 subscription for two-person meals, delivered three times per week.

So far, it looks like Amazon is making an appealing offering for curious customers wanting to try out a meal kit service for the first time. Amazon has not announced when it will expand its new service to markets throughout the U.S.