Albertsons Makes Strong Statement With Purchase Of Meal Kit Firm Plated
Finding it difficult to launch its IPO, struggling with earnings and sales IDs (it lost $204.9 million in its recent first quarter and identicals dipped 2.1 percent) and unable to complete a major retailer acquisition in more than a year (although it came close with Price Chopper), Albertsons Companies pulled the trigger on an “alternative” big deal on September 20 when it purchased Plated, a New York City-based meal kit firm. Industry sources said the deal will initially cost Albertsons $175-$200 million, though the final price could end up double that amount because of “earnout” payments based on how Plated grows.
Plated will operate as a wholly-owned subsidiary of Albertsons Cos. In teaming up with Plated, Albertsons said it adds a meal kit company with leading technology and data capabilities, a strategic step for the company as it continues to focus on innovation, personalization, and customization. This move advances a shared strategy to reinvent the way consumers discover, purchase, and experience food, the retailer added. Albertsons noted that one of the projected key outcomes is for Plated to become the first omnichannel meal kit offering with national scale.
“Today’s consumer is looking for a variety of personalized shopping alternatives, and this transaction is the latest example of Albertsons Cos. meeting our customers wherever and however they like to shop,” said Bob Miller, chairman and CEO of the large Boise, ID-based merchant. “With Plated, we’ve found a partner who shares our commitment to delicious, affordable food; superior technology and innovation; and world class customer service. Plated knows its customers better than anyone, and together we will accelerate our ability to serve them. We are excited to offer our customers more online options and fresh, quality ingredients along with distinctive recipes at their doorstep or through traditional shopping trips.”
Plated will benefit from Albertsons’ resources and national reach with over 2,300 stores to scale its business and improve its customer experience with new offerings. Albertsons will enable Plated to expand beyond its existing subscription model by offering Plated meal kits at many store locations, across its digital channels, and through a variety of distribution options to make it easy to create delicious meals at home by providing the flexibility, convenience, and access to high-quality, fresh ingredients coupled with chef-designed recipes that customers are looking for. Plated’s marketing and acquisition efforts will also benefit by gaining exposure to Albertsons’ 35 million customers per week, Albertsons noted.
Josh Hix, co-founder and CEO of Plated, said, “Joining Albertsons Companies presents an amazing opportunity to accelerate our positive impact on the future of food in America by making fresh, delicious food more widely available. Albertsons Cos. is at the forefront of the changing food and grocery landscape
with their customer obsession, their large national store footprint, and their exciting plans for the future of the grocery store. We’re excited to be partnering with them to shepherd our growth while preserving the unique strengths that define Plated today. There’s tremendous upside for Plated’s customers whose experience with our brand will only get better. As meal kits continue to gain traction in the marketplace, we believe the winning formula combines choice, flexibility, culinary expertise, and the ability for customers to buy across channels–all of which we are now singularly positioned to deliver in collaboration with Albertsons Cos.”
Plated will continue to operate as a distinct consumer brand with its own leadership team led by Hix. The company will remain headquartered in New York City, with five fulfillment centers across the country and Hix and his team will work directly with Pat Brown, Albertsons’ group VP of deli/prepared foods and business initiatives, to determine how the company can best scale Plated’s offers to its stores and customers.
Plated was launched in 2012 with a stated mission to change the way America eats by leveraging data and technology to disrupt the traditional food supply chain and make it easy for people to cook delicious meals at home. Founded by Hix and Nick Taranto, the company has rapidly scaled and evolved with a customer-centric model focusing on choice and flexibility to provide a personalized dinner experience. At the same time, the brand has an unwavering commitment to creating delicious recipes that appeal to people who are passionate about food and seek discovery in the kitchen. The culinary team is led by Le Cordon Bleu-trained chef Elana Karp, the company’s chief culinary officer. Plated sales for 2017 are projected to be in the $150-$175 million range. Plated received a boost three years ago when it was featured on the popular show “Shark Tank.”