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H-E-B Acquires On-Demand Delivery Service Favor

Favor delivery service

Favor Delivery, an on-demand delivery service, will become a wholly owned subsidiary of H-E-B. The terms of H-E-B’s acquisition of Austin-based Favor were not disclosed.

H-E-B says it is accelerating its plan to become a digital retail industry leader in Texas with the acquisition. The partnership also complements H-E-B’s brick-and-mortar operations by growing its online presence to meet customers’ evolving needs and expectations.

Favor will continue to operate independently as a separate brand led by CEO and President Jag Bath. H-E-B will retain all of Favor’s employees and its 50,000 “runners,” who operate as contract delivery drivers.

“I am thrilled to have H-E-B join forces with another well-respected and innovative Texas company,” said H-E-B COO Martin Otto. “We share similar values, including a commitment to excellence in customer service and to our greatest resource—our people. Over the past two years, we have established a strong working relationship with Favor that has proven to be immensely successful for both companies. We see a unique opportunity with this partnership to support and accelerate each other’s growth through the sharing of experience, insight and resources.”

Founded in 2013, Favor has expanded its presence to 50 cities in Texas. In 2017, Favor more than doubled its footprint across the state and became the first U.S. on-demand delivery company to achieve profitability at scale.

“We could not be more excited to be part of H-E-B,” said Bath. “I am incredibly proud of our team’s success and the business we have built at Favor. H-E-B’s extensive resources, capital and retail food industry experience will enable us to further build on our momentum and significantly accelerate our growth throughout Texas.”

With Favor, H-E-B gains access to consumer-facing technology and the on-demand company’s advanced delivery system. H-E-B also will leverage Favor’s data-driven approach to capture customer experience insights.

This transaction is the latest in a series of strategic investments in technology and partnerships that H-E-B has forged to enhance its digital and delivery offerings in Texas. Home grocery delivery is already a key pillar of its offering through HEBtoYou. H-E-B also already offers customers the convenience of “Curbside Pickup” at more than 100 stores. The service enables customers to order online and have their groceries delivered to their cars, and HEB.com offers customers the ability to order and ship grocery, drugstore and general merchandise products to 48 states and military bases worldwide.

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