Whole Foods is jumping in on the meal-kit craze (WFM)

AP

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Whole Foods announced in a July 27 conference call with investors that it may be looking to invest in a meal-kit service, reported Quartz.

The meal-kit industry — made up of companies that send specific recipes and corresponding ingredients directly to a consumer’s door for home cooking — is becoming increasingly crowded. The market is dominated by Blue Apron and Hello Fresh, though new entrants are rapidly emerging.

The New York Times recently launched its own service in partnership with Chef’d, while the Food Network and Instacart have teamed up to deliver meal kits. Most notable is likely Amazon’s decision to get into the meal-kit space. Amazon has partnered with Tyson Foods to launch “Tyson Taste Makers,” a meal-kit service that will be part of Amazon Fresh.

But Whole Foods’ existing reputation with shoppers may be enough to help it see success in this market, even as competition heats up.

Whole Foods is capitalizing on the popular meal-kit trend, as well as a solid second-quarter earnings report. Revenue reached a record $3.7 billion in Q2 2016, marking a 2% YoY gain for the company, driven by new store openings.

Meanwhile, Whole Foods has been ramping up its efforts to increase sales further and attract new shoppers. The company launched its “365 by Whole Foods Market” chain of stores this past May. The new chain is aimed at more price-sensitive shoppers, but still offers the company's usual fresh and organic products. The grocery chain also recently began testing a rewards program for shoppers at its Dallas store.

The rewards program will allow shoppers to save on certain products and earn rewards through special discounts. Given the company's recent momentum, and plethora of new initiatives, its interest in the meal-kit delivery space is unsurprising. Launching an e-commerce platform would provide an entirely new revenue stream for Whole Foods and help it drive overall sales even higher.

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