GNC diversifies into meal delivery space

GNC recently announced a partnership and investment in RealEats, a New York-based meal delivery service that produces vacuum-sealed meals free of additives or preservatives. The partnership marks GNC's entry into the meal delivery space. "I started RealEats as a busy, single dad who wanted to provide fresh, nutritious dinners for my two young boys, but didn't have the time to do grocery shopping, prepping, cooking and cleaning. Through this new partnership with GNC, we will be able to deliver our nutritious and delicious meals to a whole lot more people,” said Dan Wise, founder and CEO of Real Eats. New avenue for growth Later this year, customers will be able to order meal bundles through GNC.com. The bundles will include options for consumers with dietary preferences, such as meat-free or lower calorie offerings. The retailer said the addition of RealEats lends itself to a configuration based on consumer goals and preferences and when you combine that with supplement solutions, it’s a compelling one-stop-shop. "We've teamed with RealEats to mark our entry into the fresh food business because of the high quality of their product and our shared dedication to helping people achieve their health and wellness goals. This exciting partnership was a natural fit for our business that expands our product line to include diverse and delicious meal options, and give GNC consumers access to fresh, healthy meals across multiple channels," said Cam Lawrence, GNC's Chief Financial Officer. "Consumers are increasingly looking for healthy and convenient wellness solutions, and by making these products more accessible than ever through GNC, this unique partnership provides an entirely new avenue to drive growth for our business.” Full circle “I'm glad to see GNC finally circling back to its founding legacy as a health food store. Nutrition is so much more than selling vitamins and sports nutrition products—but even a business named General Nutrition Centers can lose sight of that fact,” said CPG strategist Joshua Schall, president of J. Schall Consulting. “Consumers walk into GNC locations every day with a strong conviction to reach a specific wellness goal. The problem is that most of these consumers don't fully understand the steps that need to be taken to reach those wellness goals. Unfortunately, many consumers believe nutritional supplements are the ‘easy button’ to reaching your wellness goals. "This misinformation ultimately hurts GNC, since those consumers won't change other lifestyle variables. Unable to reach their wellness goals, consumers believe nutritional supplements are a waste of money. All that being said, the new RealEats partnership will give GNC a much-needed commercialization mechanism and brand authority to be more involved within the wellness journeys of its customer base.” GNC said that the new offering will enhance the store experience, as store coaches will be armed with a new solution to help meet consumer needs. Accessibility Earlier this year, Josh Burris, CEO of GNC, told us that the retailer emerged from bankruptcy under new ownership with a stronger balance sheet and a right-sized store portfolio, allowing the company to be better positioned for growth. “Harbin (the Chinese investor that bought GNC out of bankruptcy) has provided GNC with greater opportunities for expansion and brand investment that will make our products more accessible than ever, and their investments in our business are allowing us to capitalize on significant growth opportunities in the health & wellness space,” said Burris. Whether it’s meal kits or supplements, accessibility has been an ongoing theme for GNC as of late. In June, the wellness brand announced an exclusive agreement with Walmart that will include the sale of GNC products through Walmart's national footprint, making GNC's products more accessible. The partnership announcement includes a strategic investment from GNC into RealEats, however GNC told us, “We aren’t going to get into the specifics of the investment but are excited about the partnership and think both GNC and RealEats will see significant upside as we collectively grow this business.” Schall cautioned that as GNC grows its business, it should do so strategically. . “While the ‘COVID-19 Effect’ brought life back to the meal prep subscription companies, the future is still faced with a myriad of challenges. Those include facing low customer retention rates and profitability concerns,” said Schall . “Being that RealEats is relatively small within the meal kit and meal prep market, GNC will need to be careful to not push the go-to-market too aggressively at the beginning to ensure customer experience of this new partnership is optimal.”

GNC diversifies into meal delivery space

The move marks an important step for the retailer as it looks for new holistic and innovative approaches.

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