AUSTIN, Texas — With a focus on local and regional food procurement, Local Crate Meals is expanding distribution of its fresh and seasonal meal kits, the founder and CEO told the audience at the Potato Expo 2019.
Speaking at a session Jan. 10, Frank Jackman, CEO and co-founder of Minneapolis, Minn.-based Local Crate Meals https://localcrate.com/, said the firm is distributing its meal kits in more than 240 retail locations, including Target, Natural Grocers. Distribution in some Whole Foods stores will begin in February, he said. The company also delivers meal kits directly to consumers.
Local Crate meal kits are distributed in the Midwest and West Coast, and are expanding into the East Coast and South, he said.
“In every region, we have to find new suppliers, new chefs and new retailers,” he said, showing a slide of a Red River Valley potato farm that supplies potatoes for its Midwest region meal kits.
He said the brand is built on the story of the food — both on the story of farmers who provide the produce and other food, and the chefs who create the meal kit recipe.
“We are only as good as they are with their product, and we pull that all together for mass market retailers,” he said.
Local Crate Meals partners with award-winning chefs and brands to create seasonal recipes, he said. The meal kit offers full instructions in the package and also directs consumers online where a video of the chef preparing the meal is posted. The video elements also feature interviews with farmers, he said, providing greater traceability and transparency than national meal kit brands.
Sourcing locally and regionally allows transportation and packaging costs to be lower for Local Crate compared with national players such as Blue Apron and Hello Fresh, Jackman said. The firm strives to source food from within 250 miles of where it is sold, though he said that number is not a hard and fast rule.
“For us, it is more about transparency,” he said.
He said the Local Crates model has lower cost shipping and packaging but spends 61% of its cost on food, flipping the model of national players, whom he said typically spend more on transportation and packaging than food.
“We provide better quality product to our consumers at the exact same prices as national players,” he said.
Featuring about 10 recipes in every region, he said the meal kits are based off trends and needs of consumers in each region. Prices start at $14.99 for two servings.
Shelf life for the meal kits is about 12 days, and deliveries to retail stores are twice a week.
About 14% of retail consumers who buy Local Crate meals visit the company’s website to learn more about preparing the food and finding out where the food was sourced. That is much greater than the typical 2% to 3% consumer engagement with a listed website on food packaging, he said.
Using retailers as micro-distribution points for meal kits is a more economical way to build the Local Crates customer base, he said.
“Customer acquisition costs are way too high ($200 to $400 per consumer) for direct to consumer (marketing) because the retention isn’t there,” he said.
Jackman praised the versatility of potatoes in Local Crate meal kits, along with the vegetable’s familiarity with consumers and its durability and shelf life.
“As we look at ingredients that we utilize we look at variety and prep versatility there’s so many different (potatoes) that we use, different colors and shapes,” he said. “We don’t have to just use a yukon or russet.”
Because 85% of consumers don’t know what they are having for dinner only a few hours before the meal, kits can check the box for convenience, he said.
Jackman said the sweet spot of retail demand are meal kits priced at about $17.99 to $18.99 that take between 25 and 30 minutes to prepare.