This category is on fire.
Albertsons, the national grocery store chain, announced on Wednesday that it will buy Plated, a startup that makes meal kits. The acquisition is an attempt to appeal to a growing segment of Americans who are using meal delivery services as well as a maneuver to fend off Amazon-owned rival Whole Foods.
The terms of the Albertsons-Plated deal were not disclosed, but the Plated acquisition is expected to close later this month, Albertsons said in a statement.
Founded in 2012, Plated landed an investment deal after founders Nick Taranto and Josh Hix appeared on an episode of Shark Tank. Since then it has risen in the ranks of DIY meal-kit startups. Plated was ranked the best meal-kit service by Money magazine earlier this year.
While Plated’s popularity has grown, the deal with Albertsons gives it access to a new group of consumers. Albertsons has a national reach of more than 2,300 stores under more than a dozen different banners, including Safeway, Vons, Jewel-Osco, Shaw’s, Acme, Tom Thumb, Randalls, United Supermarkets, Pavilions, Star Market, Haggen and Carrs. Albertsons says 35 million customers visit its stores every week.
Still, Plated serves a different clientele. The startup’s core business model today is a subscription service; Albertsons wants to expand upon that and offer Plated meal kits at its “many” of its store locations as well as its “digital channels,” likely in reference to the company’s various websites and apps.
Grocery stores and Big Food manufacturers such as Kroger, Unilever, and Campbell Soup are keen to invest in the food delivery and meal kit category, despite the lackluster IPO of Blue Apron in June. Many already have.
For example, Campbell Soup backed “the first and only meal store” Chef’d in May with a $10 million investment, while Unilever led a $9 million funding round for the San Francisco-based food delivery service Sun Basket. In June, Nestlé acquired a minority interest in health food delivery service Freshly. And in May, Kroger decided to launch its own meal-kit brand, called Prep+Pared.
Suddenly the meal-kit category is more crowded than ever.