Supermarket chain Kroger Co. will acquire meal kit company Home Chef for $200 million, according to the Chicago Tribune. The deal is expected to expand the reach of the company to more customers while also defining their shopping habits.
The purchase is expected to close in approximately one month. It includes future earn-out payments up to $500 million over a five-year time period, which is contingent on reaching certain milestone marks.
Home Chef was founded in 2013. The company is based in Chicago. It produces meals and delivers the ingredients as well as the instructions to prepare the meals to customers. It delivers an estimated 3 million meals a month. In 2017, the company produced revenues of $25 million.
Home Chef also receives more than 100,000 reviews each and every month, helping to tailor its products to the demands of its customer base. Kroger is hoping to capitalize on these reviews and enhance its product offering as well.
Kroger said it plans to make Home Chef meal kits readily available online as soon as the purchase is approved. Customer data will give insight into which brick and mortar locations to provide the kits initially.
Kroger has 2800 stores throughout the U.S. More than 10 million shoppers frequent the stores and visit its website daily.