Kroger's Investment in Meal Kit Maker Home Chef Reaches Its Dallas-Fort Worth Stores

One meal kit company seems to have found a good fit with Kroger.Kroger paid $200 million for Chicago-based Home Chef in May 2018 with the intention of bringing the brand into its stores. Kroger first started selling Home Chef kits in its Midwest stores last October and is now adding it to 500 more stores nationwide including Texas.So far more than two dozen Kroger stores in Dallas-Fort Worth are offering the Home Chef meal kits, including a new Kroger Marketplace that just opened in McKinney, said April Martin Nickels, spokeswoman for Kroger in Texas.When Kroger purchased Home Chef it was one of several subscription brands that entered the grocery business in 2013 and 2014 to grab market share from traditional grocers. At that time, Kroger and Walmart had not yet built their own online grocery businesses.The idea behind meal kits is to provide busy households with fresh foods, pre-measured ingredients and recipes that could be made in less than 30 minutes. The business model suffered from customer turnover and defection. Many industry analysts believed meal kit companies needed to be in grocery stores in addition to offering subscriptions that go directly to customers.Kroger's original deal with Home Chef included $500 million in future payments over five years if the company met certain milestones including "significant growth of in-store and online meal kit sales." Before the merger, Home Chef reported sales growth 150 percent to $250 million and two profitable quarters.Albertsons bought Plated in 2017 and the kits have been in D-FW Albertsons and Tom Thumb stores since last spring.Blue Apron said last week it was consolidating its fulfillment operations resulting in about 200 job losses at its Arlington facility.Twitter: @MariaHalkias  Continue reading...

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