Following the acquisition of the meal kit company, Home Chef, earlier this year, a new range of meal kits is being launched into selected Kroger stores.
Acquisition accelerated progress
Kroger acquired Home Chef in a $200m deal earlier this year. The meal kit company grew sales 150% to $250m last year as the concept grew in popularity. Although Kroger had developed its own range of kits, Prep & Pared, in-house, the acquisition enabled Kroger to accelerate its progress in this area. Home Chef is operated as a subsidiary of the second largest grocery chain in the US and continues to offer a subscription-based delivery service.
Testing Home Chef Express range
A rotating range of meals will be introduced to stores in Illinois, Kentucky, Michigan, Ohio, and Wisconsin, with further stores expected to be added in 2019. The retailer is also undertaking a limited test of a new Home Chef Express range. This is a quick-cook meal kit, enabling dishes to be ready in around 15 minutes.
Migrating to the physical store
Meal kits have experienced rapid growth over the last 18 months, with most major retailers moving into this space. Many have chosen to develop their own ranges, while like Kroger, Albertsons undertook a major acquisition with its deal for Plated. Although most of the meal kit companies were originally founded as online only, subscription-based services, several have formed retail partnerships. These include Blue Apron and Costco and Hello Fresh and Ahold Delhaize.
Redefining how customer shop for and prepare meals
At Kroger, the deal with Home Chef brings to life its strategic priority to redefine the customer experience and how its customers shop for and prepare meals. The retailer has also been investing in developing new in-store hot food concepts and is testing standalone restaurants. Kroger’s move into ecommerce is also part of this. In addition to extending its store pickup service, it has formed partnerships with Instacart and Ocado for grocery delivery and is currently testing driverless deliveries in partnership with tech start-up Nuro.
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