Kroger is buying Home Chef, the largest private meal-kit company in the U.S., for $700 million in order to boost the chain's online grocery business.
Severin Weiss, CEO of SpecPage, a leader of innovative solutions for the recipe-based manufacturing industry, says the acquisition will be a big win for Kroger, a brand that strives to exceed customer expectations, as the home-delivery meal service is a huge market trend.
"They have an opportunity to wow customers with fresh, convenient, healthy meals," Weiss told FierceRetail. "Consumers have a right to know what’s in their food and they are demanding transparency. There are only two ways to guarantee transparency—cook from raw materials grown in home gardens or purchase only products from manufacturers who provide accurate, transparent product labels."
The move is also important in growing competition that exists in the area of grocery. The partnership illustrates that Kroger is innovative and has more to offer than the traditional sale of groceries.
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"This acquisition shows that Kroger is invested in catering to consumer needs—and is always looking for ways to give the customer what they want. It redefines the entire grocery shopping experience for their customers," Weiss said.
The merger will also benefit Home Chef, as Kroger has been a leader in the food industry for more than 100 years. Home Chef stands to benefit from Kroger’s solid reputation while gaining access to vast resources.
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Moving forward, Weiss says the meal-kit models that evolve will survive and thrive beyond 2018. The brands will need to innovate to meet consumer and regulatory demands.
"The absolute most important component will be transparency and traceability—you can’t have transparency without traceability," he said. "Companies that thrive will employ efficient and effective systems management from end-to-end to provide greater traceability—that is what satisfies the consumer and regulatory agencies."