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AmazonFresh & Hungryroot Partner to Deliver Healthy Meals

Amazon.com 's AMZN online grocery delivery service, AmazonFresh, recently partnered with Hungryroot to distribute ready-to-eat meals in continental U.S. While the meals will initially be distributed on the east and west coasts, the mid plains will follow soon. The deal will help Hungryroot leverage Amazon's logistics and distribution expertise to expand all over the country.

Who is Hungryroot?

Long Island City, Queens-based Hungryroot was founded in 2015. The company offers packaged meals, containing 70% to 80% vegetables and 20% protein that remain fresh for 14 days. The base ingredient used are vegetable noodles, made from sweet potatoes, radishes, beets, zucchinis, and served with a special sauce, and an optional protein side dish.

The company, run by a team of entrepreneurs including co-founder and CEO Ben McKean, aims to offer "good-for-you" meals with fresh ingredients instead of the ones cooked in a microwave.

The nature of the meals and the short delivery time make them unsuitable for traditional grocery stores. So Hungryroot partnered with online players like Amazon's AmazonFresh and FreshDirect to reach customers without any delay.

These products cater to consumers' changing food preferences. Consumers are now increasingly opting for gluten-free and organic food items. They prefer fresh food with high nutritional value, and preferably no artificial additives.

Therefore, Hungryroot is also expanding into other food categories, such as sweets and desserts made from chickpeas and sweet potatoes.

The food industry is undergoing a change in keeping with the shift in consumer preference away from artificial sweeteners, sodium and saturated fat. Consumers now prefer a nutritious diet and are even ready to pay more. In this fiercely competitive food market, companies are devising newer ways to capitalize on the evolving demand for products by enhancing the freshness and the quality of the products.

What's In It for Amazon?

AmazonFresh was introduced in 2007 on a small scale near Amazon's headquarters in Seattle. The service enables users to order groceries online which are delivered either the same day or the next, thus saving time and effort. The service has been expanded to other cities.

Amazon is basically a retailer of electronics clothes etc, but it recognized growing opportunity in the grocery delivery market. This is a new chapter in Amazon's Fresh's existence because it's the first time the company will be delivering ready to eat meals. In fact, it could be the beginning of a trend where smaller food suppliers utilize its distribution strength to grow.

Currently, Amazon sports a Zacks Rank #3 (Hold).

Stocks that Warrant a Look

A couple of better-ranked stocks in the same industry are JD.com, Inc. JD , Expedia Inc. EXPE and The Priceline Group Inc. PCLN . JD.com sports a Zacks Rank #1 (Strong Buy), while Expedia and The Priceline Group carries a Zacks Rank #2 (Buy).

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JD.COM INC-ADR (JD): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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