Metro Inc. divests meal kit business

Stewart Samuel
Program Director - Canada
@RetailAnalysis

Date : 10 December 2019

Metro is selling its stake in the MissFresh meal kit business it acquired in 2017.

Company being acquired by Cook it

Founded in Montreal in 2015 by Marie-Eve Prevost, Bernard Prevost, and Ritter Huang, MissFresh is a Canadian meal kits company. Following the deal in 2017 MissFresh's three cofounders retained 30% of the capital and continued to take an active part in the company's management. The entire company is being acquired by Cook it, an established meal kit business that is also based out of Montreal. Metro will continue to sell MissFresh’s ready-to-cook meals within its stores.

Low risk investment

Metro’s acquisition of its stake in MissFresh was made at the high point of the industry’s focus on subscription-based meal kit programmes. At the time, it was viewed as a good move for Metro, being relatively low risk, bringing in new capabilities into the organisation and enabling it to enter subscription-based ecommerce. It also aligned with Metro’s foodservice focus. Recently the retailer has broadened its business in this area to offer home delivery through partnerships with DoorDash and Uber Eats.

Source: IGD Research

Limitations of subscription-based model

However, there are limitations to the subscription-based model, where customer acquisition costs are also typically high. Several retailers have developed private label ranges, making them available in-store and online through their grocery ecommerce services. In many cases, this has provided customers with more flexibility than the traditional subscription-based model. Last month, US-based Albertsons announced that it’s terminating the subscription service for its Plated meal kits range, choosing to build a stronger in-store presence for the brand.

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