On Wednesday, the grocery store chain announced that Kroger will buy the Home Chef meal kit delivery company for $200 million. This purchase will give Kroger a big boost as, like other traditional groceries; it will compete with online giants in the mealkit section and grocery delivery, just like Amazon, which owns Whole Foods grocery stores.
“Customers want convenience, simplicity and a personalized food experience,” said Yael Cosset, Kroger’s chief digital officer, in a statement. “… This merger will introduce Kroger’s 60 million shoppers to Home Chef, enhance our ship to home and subscription capabilities, and contribute to Restock Kroger.” (Restock Kroger is the company’s initiative to “redefine the food and grocery customer experience in America.)
Meal kits basically contain proportioned, uncooked raw materials required to cook a meal, which one has to cook on your own. Kroger already sells its own mealkits called ‘Prep+Pared” in a number of stores in the country, this merger will help sell Home Chef meal kits alongside Prep+Pared in its stores as well as online, according to a statement from Kroger.
“We’ve long believed that the future of our industry is omni channel and bigger than just meal kits sold online. We want to be where our customers are and want to help make cooking at home easier, more accessible and even more enjoyable,” Pat Vihtelic, Home Chef’s founder and CEO, said in a statement.
If the company achieves significant growth and profits, Kroger could payout an additional $500 million to HomeChef, which includes both in store and online sales. Kroger said that HomeChef had grown 150%in 2017 with $250 million in revenue.