Peapod bets on meat with new online butcher shop

Dive Brief:

Peapod announced the launch of an online butcher shop, which the company claims is an industry-first. The online portal features a variety of meat products, an “Ask the Butcher” Q&A section and a dry aged steak room where shoppers can view the aging process as it happens.
Online grocer Peapod also announced a partnership with family-owned meat company Meatz by Linz to provide a direct-to-consumer distribution channel for the manufacturer's products to grocery retail, according to a company release.
As part of the agreement, Meats by Linz — which provides meat to steakhouses such as Maple and Ash, Ditka’s Restaurant and Michael Jordan’s Steak House — will offer a variety of cuts and aging styles to Peapod customers.

Dive Insight:

Though the online grocery channel is on a solid growth trajectory, consumers have been reluctant to go all-in on purchasing perishables like meat and vegetables through the channel. Just one in 10 Americans buy fresh produce, meat, poultry and fish through e-commerce, according to market research company Mintel. Most are concerned about freshness and safety, and want to have in-person purchasing control over those specific items.

An online butcher shop may break down some of those barriers to adoption that retailers face in the category. Peapod customers can customize their cuts, ask questions of meat experts and learn some of the same helpful tips a butcher might provide customers in-store.

Partnering with a dedicated — and reputable — meat purveyor, Peapod could help further boost adoption, especially among meat consumers who make up a huge chunk of grocery shoppers. According to the Food Marketing Institute, meat/poultry makes an appearance in an average of four home-prepared meals per week. The household penetration of meat is 98% — definitely a big enough audience to chase, and it could explain why a growing number of online meat sellers, such as Porter Road and Greensbury Market, are starting to pop up. The Food Marketing Institute's recent “Power of Meat” survey showed that 19% of shoppers reported buying meat online at least once last year, up from just 4% who said the same in 2015.

Its ability to stay nimble and innovative is the main reason Peapod is the only online grocery player to survive the dot-com crash. As the company faces a growing threat from deep-pocketed challengers like AmazonFresh and Instacart, it has no choice but to continue to innovate and this partnership is a good start. As Peapod SVP Spencer Baird said in the release, the partnership “gives the Peapod customer a truly unique experience delivered right to their door.” This should be a concerning statement for mostly brick-and-mortar grocers who have relied on their in-person space to provide unique experiences consumers crave.

Peapod will use the holiday season as a marketing springboard for its new meat partnership, introducing a “Gourmet Butcher Shop” that will allow shoppers to customize orders for holiday parties. If this campaign goes well, it will illustrate whether or not consumers are more willing to trust buying meat online if the right approach is taken.