Kroger’s Home Chef meal kit biz joins the billion dollar sales club

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Photo: Kroger
Oct 26, 2021

The Kroger Co. and its Home Chef subsidiary announced yesterday that the meal kit service has reached $1 billion in annual sales.

Home Chef, which was founded in 2013 and acquired by Kroger in 2018, comes off a record year in 2020, benefitting from Americans eating more meals at home during the pandemic. The service offers traditional meal kits that instruct consumers to prepare supplied ingredients, as well as options for those not looking to do it themselves.

“We’re on a mission to make mealtime easier with fresh ingredients and simple instructions,” said Erik Jensen, president of Home Chef, in a statement. “By offering time-saving meal solutions at Kroger Family of Stores, we’re able to simplify the cooking process, provide a wide variety of options, and allow customers to enjoy a delicious homemade experience. We’re excited to continue scaling the brand and creating new products that are accessible to customers nationwide.”

Home Chef offers more than 500 products across categories. It has expanded from its meal kit beginning to incorporate heat-and-eat meals, ready-to-eat products and seasonal options. The brand’s products are available at more than 2,200 Kroger-owned chain stores across the U.S. and through a home delivery subscription at homechef.com.

Dan De La Rosa, Kroger’s group vice president of fresh merchandising, said the supermarket giant’s “Fresh for Everyone” commitment is exemplified by the Home Chef brand. The line helps Kroger “bring families together in the kitchen with meal options for any occasion,” he said.

Kroger sees plenty of upside for Home Chef and is committed to seeking ongoing opportunities to make the brand a household name in America.

“Whether it’s meal kits, or heat-and-eat and ready-to-cook solutions — which are available via subscription, in-store, pickup, or delivery — it’s safe to say that Home Chef has mealtime covered,” said Mr. De La Rosa.

Pat Vihtelic, Home Chef founder and CEO, said, “We’ve grown from delivering meals [in 2013] with a rented truck to becoming a leading brand for Kroger. With Kroger’s support, our two brands offer a collective passion to make mealtime easy and bring people together over a meal.”

DISCUSSION QUESTIONS: What do you see as the current opportunities and challenges facing meal kit brands? What is your assessment of Kroger’s handling of Home Chef and do you see significant growth potential for the brand going forward?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Kroger has created a behemoth in this space through thoughtful curation, consistent innovation, and unwavering passion."
"Kroger really integrated Home Chef into its model thoroughly, which helped ensure a synergistic relationship and therefore success for both brands."
"Price can still be a limiting factor – these are not inexpensive meals. We can make the same meal for close to half or two-thirds the price."

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11 Comments on "Kroger’s Home Chef meal kit biz joins the billion dollar sales club"


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Michael La Kier
BrainTrust

Booming meal kits show we still want convenience regardless of cost. Kroger has done a masterful job of growing the Home Chef brand and business. A perfect example of vertical integration of a business. A strong brand could be licensed to other grocers in the future.

Dave Wendland
BrainTrust

Love the licensing idea, Michael. When a brand has reached this scale, the canvas becomes much larger!

Dr. Stephen Needel
BrainTrust

Price can still be a limiting factor – these are not inexpensive meals. We can make the same meal for close to half or two-thirds the price. That said, Kroger’s variety is very good and if you can’t cook, these are a simple solution.

Dave Wendland
BrainTrust

Kroger has created a behemoth in this space through thoughtful curation, consistent innovation, and unwavering passion. The opportunities for Kroger to continue its growth far outweigh its challenges.

Although obstacles have emerged regarding the supply chain, labor, and rising costs overall, the Home Chef brand and its appeal to time-starved shoppers who have increasingly spent time at home is gaining momentum. I foresee significant growth with expanded personalization and options for shoppers.

Congratulations on another $1 billion brand, Kroger!

Melissa Minkow
BrainTrust

Kroger really integrated Home Chef into its model thoroughly, which helped ensure a synergistic relationship and therefore success for both brands. It was a strategic acquisition that filled a void in Kroger’s model and in Home Chef’s. However it’s hard for me to envision much growth for meal kit companies post-pandemic. The pandemic makes a lot of sense in terms of driving so much interest in this space, but now that interest is returning to on-premise dining, I’m concerned about this category.

Gary Sankary
BrainTrust

Meal kits are extremely popular these days. The barrier is the subscription cost and lack of flexibility. An on-demand meal kit from the local Kroger sounds like a winner for families in need of something on short notice, or who look at their week’s calendar and realize that there are a couple nights they won’t have time or don’t want to make time to plan and cook a meal. The downside is the question of how to manage shrinkage around unsold, pre-made kits. If Kroger can figure out the sweet spot between demand and availability, I suspect this will be very successful.

David Spear
BrainTrust

Home Chef will continue its positive sales trend as consumers look for more value and convenience. Coincidentally, my wife and I enjoyed a meal kit last night for dinner (taco salad) and it was delicious! The packaging was appealing, the contents were fresh and it contained more tasty ingredients than I would normally put on a taco salad myself. With a standard like this, consumers will flock to these prepared meals more frequently.

Raj B. Shroff
BrainTrust
Opportunities for Home Chef are as follows: Continue to drive trial and awareness to grow; Integrate delivery more effortlessly; Better integrate it into the e-commerce experience; Probably place it in different areas of the store as part of the awareness driving; Continue to expand the menu to align with regional palates, trends, etc; Use their loyalty program to make suggestions aligned with shopper profiles and conduct 360 feedback to maintain a pulse on quality, taste, and future offerings. I think there is upside potential with Home Chef. It’s an easy way to address the age old question of what’s for dinner. It feels closer to fresh and homemade which, I think, many value. Different preparation methods allows for choice, putting the shopper in control in terms of items, sides, timing, and level of prep. With fast delivery becoming ubiquitous, it can compete with restaurant meal orders. For Kroger, they can create a diverse menu that no restaurant can compete with. Normally fewer options are better for a menu but in Kroger’s instance, I think they… Read more »
Richard Hernandez
BrainTrust

The meals are a little on the high-priced side but the packaging is attractive and the instructions are easy to understand. They have a varied assortment of options and I anticipate that they will keep expanding the line and perhaps grow into more affordable meal kits for their customers.

Joel Rubinson
BrainTrust

A billion dollar brand is rarified air! My assumption is that the demand for this is nested within shopping at Kroger so those who shop elsewhere represent other retailers who can take advantage of Kroger doing their marketing research for them. As a seasonal Florida resident, I know that Publix has a similar concept but it is in the store. Last time I was there, there was a tasting station but I’m not sure how that might have been suspended during COVID-19. All the products necessary to make the meal had secondary placement by the tasting station. If we think the billion dollar brand is conditioned on Kroger’s percentage ACV, we see how much room there is for this new category to expand.

Venky Ramesh
BrainTrust

Last year, as the away-from-home food consumption went down due to lockdowns, restaurant closures and general consumer nervousness to venture out, Kroger and other grocers benefited from it in a big way. Meal kits are a great strategic lever for them to continue to keep those eat-at-home consumers while providing them an alternative way to experience restaurant quality meal with their families without having to go out.

wpDiscuz
Braintrust
"Kroger has created a behemoth in this space through thoughtful curation, consistent innovation, and unwavering passion."
"Kroger really integrated Home Chef into its model thoroughly, which helped ensure a synergistic relationship and therefore success for both brands."
"Price can still be a limiting factor – these are not inexpensive meals. We can make the same meal for close to half or two-thirds the price."

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