Hy-Vee Inc. will invest more than $86 million in its behind-the-scenes food production operation in Ankeny, state documents show, including building a new production center for prepared foods and meal kits.

Plans call for expanding the Hy-Vee-owned Perishable Distributors of Iowa warehouse in Ankeny and building a $64 million facility that will house the grocer's central bakery and produce prepared foods and meal kits.

The move appears to position Hy-Vee to compete for more market share in the $2.2 billion meal-kit business, competing with at-home delivery businesses like Blue Apron and Hello Fresh.

Those companies ship kits that include perfectly portioned ingredients and seasonings with detailed cooking instructions.

Hy-Vee offers prepared meal kits at some of its stores but does not have a company-wide program.

Some locations have been participating in Hy-Vee’s Simple Fix program in which store dietitians help customers create take-home meals. Other stores offer Fresh Meal Kits with pre-measured ingredients and cooking instructions that customers order online and pick up at the store.

The at-home meal kit market is expected to grow 25 to 30 percent over the next five years, according to Pentallect, a food industry consulting firm in Chicago.

And now, after a $13.7 billion purchase of Whole Foods, Amazon has announced plans to enter the meal-kit business.

Hy-Vee officials declined to discuss details of the company's expansion or its plans for meal kits.

But supermarket analyst Jim Hertel said Hy-Vee's investment in prepared foods and meal kits is a smart move and an acknowledgment of how consumer eating patterns continue to evolve.

"What it really is, is a recognition that the center of gravity in the consumer base has shifted from the baby boomer to the millennial," said Hertel, senior vice president of Chicago-area Willard Bishop, an Inmar analytics company. "It's also a recognition that that millennial shopper or consumer has a high focus on convenience, a high focus on quality and a high focus on speed. And they have very little ability in the kitchen itself."

Hertel said younger generations care about the integrity of food ingredients, but they don't know much about making those foods themselves.

"We were the McDonald's generation," Hertel said. "Now our kids, they go to Panera. They know what high-quality food is, but they have no idea how to make it. So this is perfect for the Panera generation."

Hertel said Hy-Vee could win market share by offering meal kits in its stores, rather than in the mail such as subscription services, which often send ingredients for multiple meals in one box.

That added convenience, paired with consumers' longstanding trust in Hy-Vee, means the grocer won't have to undercut the big meal-kit players on price, he said.

"I think there's going to be a convenience aspect and a quality perception," Hertel said. "Whether or not it's prepared centrally, it's going to feel to the consumer like they just made it: 'I picked it up, and now I'm taking it home to make.' So I think they can compete on quality and freshness."

The West Des Moines-based grocery chain is asking for about $6.3 million in taxpayer assistance to build the new 202,000-square-foot building and extend its PDI distribution center off of Southeast Delaware Avenue in Ankeny.

The expected 209 new employees at the new facility will prepare food for all 244 Hy-Vee locations, according to documents filed with the state.

The Iowa Economic Development Authority board will consider $2.67 million in tax credits and refunds at its monthly meeting Friday.

The two separate state awards are contingent upon local matches from Ankeny in the form of about $3.6 million in tax increment financing rebates and abatements.

Only nine of the 209 new jobs at the new facility qualified for state incentives, meaning those nine positions must pay at least $27.92 per hour, state documents show. PDI's expansion is expected to create one new job, state documents show.

PDI will add 108,000 square feet to its 350,000-square-foot warehouse in Ankeny, documents show. There, PDI will add freezer and dock space, and move its flower distribution center there.

Hy-Vee currently leases space at 1947 Hull Ave. for its central bakery operations and at 2403 Bell Ave. for Floral Distributing Inc., the floral distribution subsidiary that the grocer has owned since 1992.

Ankeny City Manager David Jones declined Thursday to discuss the city's proposed incentives. The city council will hold a special hearing to discuss the issue at 5:30 p.m. July 31.