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Kroger Will Accelerate Meal Kit Growth With Home Chef Merger

Home Chef, Kroger merger

The Kroger Co. and Home Chef will merge, the companies said today. Kroger says the transaction will significantly accelerate the availability of meal kits for its 60 million shoppers. Home Chef is the country’s largest private meal kit company; it grew 150 percent in 2017 to $250 million in revenue with two profitable quarters. Kroger believes the merger will revolutionize how meals are shopped for, prepped and cooked.

The initial transaction price is $200 million and future earnout payments of up to $500 million over five years are contingent on achieving certain milestones, including significant growth of in-store and online meal kit sales. Home Chef’s offerings complement Kroger’s Prep+Pared offering that is currently available in more than 525 stores.

“Customers want convenience, simplicity and a personalized food experience. Bringing Home Chef’s innovative and exciting products and services to Kroger’s customers will help make meal planning even easier and mealtime more delicious,” said Yael Cosset, Kroger’s chief digital officer. “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.”

Home Chef features approachable meals that fit every taste preference and easy-to-follow recipes for every experience level. The company currently leads the industry with the most variety among the leading meal kit companies and has gone beyond the one-size-fits-all model to bring new innovations like 5 Minute Lunches, Flexible Serving options and new, easy-to-prepare meals that require minimal prep.

“We’ve long believed that the future of our industry is omnichannel 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,” said Pat Vihtelic, Home Chef’s founder and CEO. “We’re thrilled that we will be part of the Kroger family and plan to maintain our relentless focus on innovation that meets customers’ evolving food needs. Kroger’s expansive retail footprint will allow us to serve millions of more customers across the country with simple, convenient and enjoyable meal solutions.”

Home Chef employs approximately 1,000 employees, is headquartered in downtown Chicago, and operates three distribution centers in Chicago, Atlanta and San Bernardino. Home Chef’s distribution centers reach 98 percent of all continental U.S. households within a two-day delivery window.

“As one of the fastest growing meal kit companies in the country, Home Chef is poised for even more explosive growth,” said Cosset. “We admire their focus on the customer, culture of collaboration, dynamic experimentation and demonstrated financial success. Home Chef’s combination of culinary expertise and a customer data-driven decision-making process is right in line with Kroger’s vision to serve America through food inspiration and uplift by providing meal solutions for every lifestyle.”

After the deal closes, Home Chef will operate as a subsidiary of The Kroger Co., maintain its e-commerce business on homechef.com, and assume responsibility for Kroger’s meal solutions portfolio. The company will continue to operate its offices and facilities.

Following closing, Kroger will make Home Chef meal kits available to Kroger shoppers, both in stores and online.

About the author

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Terrie

An 11-year employee of The Shelby Report who writes for and about food. In previous lives, she worked at a police department in Texas and an amusement park in Arkansas. She also was a newspaper publisher for more than a decade. Not sure which of those qualified her for this job.

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