The anticipated merger comes on the heels of Home Chef’s 150 percent growth in 2017, $250 million in revenue and two profitable quarters. The initial transaction price is $200 million, and future earnout payments of up to $500 million over five years are contingent on achieving certain milestones.
“Customers want convenience, simplicity and a personalized food experience. Bringing Home Chef’s innovative and exciting products and services to Kroger’s customers will help make meal planning even easier and mealtime more delicious,” said Yael Cosset, Kroger’s chief digital officer. “This merger will introduce Kroger’s 60 million shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger.”
Chicago-based Home Chef employs about 1,000 employees and operates three distribution centers in Chicago, Atlanta and San Bernardino. Home Chef’s distribution centers reach 98 percent of all continental U.S. households within a two-day delivery window.
Upon completion of the deal, Home Chef will operate as a subsidiary of The Kroger Co., maintain its eCommerce business and continue to operate its offices and facilities.
“We’ve long believed that the future of our industry is omnichannel and bigger than just meal kits sold online. We want to be where our customers are and want to help make cooking at home easier, more accessible and even more enjoyable,” said Pat Vihtelic, Home Chef’s founder and CEO. “We’re thrilled that we will be part of the Kroger family and plan to maintain our relentless focus on innovation that meets customers’ evolving food needs. Kroger’s expansive retail footprint will allow us to serve millions of more customers across the country with simple, convenient and enjoyable meal solutions.”
Home Chef currently leads the industry with the most variety among the leading meal kit companies, offering innovations like 5-Minute Lunches, Flexible Serving options and easy-to-prepare meals.
“As one of the fastest growing meal kit companies in the country, Home Chef is poised for even more explosive growth,” said Cosset. “We admire their focus on the customer, culture of collaboration, dynamic experimentation and demonstrated financial success. Home Chef’s combination of culinary expertise and a customer data-driven decision-making process is right in line with Kroger’s vision to serve America through food inspiration and uplift by providing meal solutions for every lifestyle.”
Once the deal closes, Home Chef meal kits will be available to Kroger shoppers, both in stores and online.