Albertsons buys its way into the meal kit business with Plated acquisition
Albertsons Companies, the second largest operator of supermarkets in the U.S., announced yesterday that it has reached a deal to acquire Plated’s meal kit service.
Plated will operate as a subsidiary of Albertsons and will continue to sell its meals, currently priced between $10 and $12 a serving, directly to consumers through its online subscription service. Plated meals will also be sold in Albertsons’ stores in the months ahead, making it “the first omnichannel meal kit offering with national scale,” according to a press release announcing the deal.
“Today’s consumer is looking for a variety of personalized shopping alternatives, and this transaction is the latest example of Albertsons Cos. meeting our customers wherever and however they like to shop,” said Bob Miller, chairman and CEO of Albertsons Companies, in a statement. “With Plated, we’ve found a partner who shares our commitment to delicious, affordable food; superior technology and innovation; and world class customer service.”
Plated, which has raised $95 million from venture funds since its start, is one of the top five meal kit providers in the country. Blue Apron, which had a disappointing initial public offering in June, is the largest with a 39 percent share of the market, according to Market Force Information. HelloFresh (30 percent) and Home Chef (10 percent) were the only others with share levels in double digits.
A report by Pentallect puts the size of the meal kit market at $2.2 billion with annual sales growth projected to range between 25 percent and 30 percent over the next five years. The firm estimates fewer than four percent of households have tried a meal kit service.
The potential of the market has prompted companies including Amazon.com, Campbell Soup, Kroger, Nestlé USA, Publix and Unilever to either buy into third-party services or develop their own meal kit offerings.
At least one of meal kit providers sees the Albertsons/Plated deal as a good sign.
“With the Amazon/Wholefoods acquisition and the Blue Apron IPO, our industry has been somewhat frozen and unsure of what lies ahead,” Michael McDevitt, CEO of Terra’s Kitchen, told RetailWire. “This partnership provides significant validation and credibility to the ecom [e-commerce] grocery model. We have always believed that the grocery industry was going to evolve to a unified world of retail and ecom options for consumers. This helps expedite that merging of these two worlds.”
- Albertsons Companies Acquires Plated to Transform the Food Experience for Consumers – Albertsons Companies
- Albertsons to Buy Meal-Kit Company Plated – The Wall Street Journal https://www.wsj.com/articles/albertsons-to-buy-meal-kit-company-plated-1505938666
- Does Blue Apron’s ‘meh’ IPO spell trouble for meal kit services? – RetailWire
- Will Unilever’s investment in an organic meal kit maker pay off? – RetailWire
- Terra’s Kitchen
DISCUSSION QUESTIONS: How will Albertsons’ acquisition of Plated affect its core business as well as that of the meal kit service? How will the acquisition affect other grocers and meal kit service providers?