Weight Watchers International Inc. wants a bite of the home-delivery meal business. The weight-loss products e-retailer, in conjunction with Chef’d, a service that sends customers ingredients and recipes, is selling meal plans that adhere to Weight Watchers’ point system for losing weight.
Weight Watchers, No. 89 in the Internet Retailer 2015 Top 500 Guide, on Friday introduced the partnership with Chef’d. Kyle Ransford, founder of Cardinal Investments and Bank of Manhattan, told Internet Retailer Monday that he started Chef’d in April with business partner Jesse Langley so busy consumers could order meal ingredients online, including through their mobile devices. The agreement with Weight Watchers lets shoppers order the Weight Watchers meals through either company’s website.
Ransford says he and Langley have together invested more than $10 million into the startup, and he says much of that is dedicated to the company’s e-commerce platform. He says the company has tens of thousands of customers nationwide and adds new recipes each month with such categories as gourmet, family friendly, vegan and gluten-free. Chef’d is using Shopify for its e-commerce platform and has signed on 75 brands, including Weight Watchers, for which it will distribute recipes and food, Ransford says.
Chef’d is able to distribute nationwide because its principals recognized the need to invest in such a platform; it owns a distribution center in El Segundo, Calif., a warehouse in Philadelphia and is considering buying a facility in New Jersey, Ransford says.
Weight Watchers announced its agreement with Chef’d in an email to customers less than two weeks after Oprah Winfrey on Oct. 19 said she had bought a 10% stake in Weight Watchers and taken a seat on the company’s board. Ransford declined to say whether Winfrey is involved in the venture. Winfrey paid about $43 million for her stake.
Chef’d differs from existing meal-delivery services such as Blue Apron, Plated and Hello Fresh because it requires no subscriptions and lets consumers re-order meals as many times as they like, he says. Prices vary for the meals, made for two people or four people, depending on ingredients.
“Instead of trying to build our own brand and convince consumers we know what we’re doing, there are already many brands that consumers follow,” Ransford says. “Those brands don’t have the ability to get ingredients in the right quality and quantity delivered to their customers’ door. We’re the engine that allows for that to happen.”
Ransford says Chef’d will collect customer data so that it can serve them more efficiently.
“If you came online and ordered chicken teriyaki and spaghetti bolognese and told us you have a family, we know that,” Ransford says. “And we know which type of canned tomato you chose. We have a product-level history of your orders and re-orders and data around your lifestyle preferences.” Chef’d has hired a vendor, which Ransford declined to name, to help with its data analysis.
Ransford says the free Chef’d app in the Apple store lets shoppers sign in and order two meals with four touches or clicks on their smartphones. “Our app is set up so you can order two dinners in four clicks off your phone, in less than two minutes, based on pictures of meals from your favorite food brands.”
So far, 60% of Chef’d’s customers interact through mobile, he says.
“We see the food space as one of the last frontiers of the Internet,” Ransford says. “The winners in the Internet food space are going to be very, very large. Just like in any market, you tend to end up with three to four brands.
Morningstar analyst R.J. Hottovy says he sees the Weight Watchers program as an effort to attract younger members—the core membership of Weight Watchers is women older than 50, he says—with a service that offers convenience and fresh ingredients.
“These kinds of home-delivery services tend to skew toward a younger demographic, with lots of the orders taking place with apps and on mobile devices,” Hottovy says. Though Weight Watchers initially struggled to compete with interactive fitness monitors and personal trainers, Hottovy says the company plans to increase member engagement with games that offer virtual rewards and through its acquisition of Wello, which connects consumers with fitness consultants and personal trainers through online video chat. Weight Watchers also is creating on-demand, personalized support programs featuring 24/7 ExpertChat, which gives Weight Watchers subscribers access to a live weight-management coach online and via mobile devices, and personal coaching, a premium platform offering one-on-one support and personal planning services.
Weight Watchers could not be reached for comment, and Ransford did not disclose terms of the deal with Weight Watchers. He says Chef’d pays royalties on sales to its meal partners, including Weight Watchers.