Kroger Co., which acquired Roundy’s and Mariano’s in December 2015, and is the largest supermarket chain in the U.S., is acquiring Chicago-based meal kit company Home Chef for $200 million in a deal that will bring the sale of meal kits mainstream in the highly competitive grocery market.
Home Chef was founded in 2013 to develop meals, and deliver ingredients and preparation instructions to customers. The company reports it delivers about 3 million meals per month. Last year, Home Chef earned $250 million in revenue with more than 100,000 product and service reviews every month, giving it insight into consumers’ needs and desires that Kroger likely can learn from, according to Yael Cosset, chief digital officer for Kroger. Home chef headquarters are located on North Michigan Avenue in theWrigley Building.
“We know our customers would love to see more Home Chef meal kits on grocery store shelves,” said Pat Vihtelic, Home Chef’s founder and CEO. “What this allows us to do is to be everywhere our customers are.”
The acquisition deal, which is expected to close in Summer of 2018, includes future “earn-out” payments of up to $500 million over five years, contingent on achieving milestones such as meal kit sales growth.
Meal kit company Plated, was acquired in September 2017 by Albertsons Companies (parent company of Jewel-Osco), also for a reported $200 million. Campbell Soup invested $10 million in Chef’d in May, 2017, and Unilever invested $9 million in meal-subscription service Sun Basket. Two major independent meal kit companies are Blue Apron (also sells products in Costco) with headquarters in New York City, and Hello Fresh with headquarters in Berlin, Germany. There are well over 100 meal kit companies, and many struggle with loss of market share and customer retention.
— Tech In Chicago (@TechinChicago) May 23, 2018
News yesterday of @realhomechef getting bought out by @kroger made @SteveGrzanich think back to 2016 when he chatted with CEO Pat Vihtelic about his thoughts on the company's growth and the early stages of success (conversation starts at 4:56) https://t.co/6NYTGmSboa
— WGN Radio 720 (@WGNRadio) May 24, 2018
— Home Chef (@realhomechef) May 23, 2018
^^ MOBILE? USE VOICE MIC ^^
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This week we brought Taco Tuesday to a whole new level with the Tex-Mex Tofu Salad…? pic.twitter.com/HRGMrSJtah
— Home Chef (@realhomechef) May 22, 2018
Food blogger @FlosFavorite1s went behind the scenes at our new Bedford Park location and instantly found herself #hookedonhomechef. Read more about her experience below: https://t.co/WI3dxvUVHd pic.twitter.com/yAEB20gAnn
— Home Chef (@realhomechef) May 18, 2018
You know patio season is in full swing when our Patio BBQ Steak Sandwich rolls around! ? Don't miss your chance to get the grill fired up and be sure to order before 12 PM CST tomorrow ⌛
— Home Chef (@realhomechef) May 17, 2018
Our new flexible servings option means you can now order twice as many of select 5 minute lunches, making weekly meal prep a snap! pic.twitter.com/OQiuVzLDKV
— Home Chef (@realhomechef) May 15, 2018