Albertsons Agrees to Buy Plated

Albertsons, one of the largest grocers in the U.S., has agreed to acquire Plated the meal kit service, which is the first high-profile acquisition by the company since Amazon purchased Whole Foods Market.

In the U.S., Albertsons has 2,300 stores and announced on Wednesday it was buying the e-commerce company after completing talks that started months ago.

This acquisition is Albertson latest example of meeting customers however and wherever they want to shop, said the grocers’ CEO and chairman Bob Miller.

The deal gives Albertsons access to the data and technology of Plated, which is easier than going through a buildup of the entire infrastructure said Miller.

It also is going to help to address one of the biggest challenges facing companies specializing in meal kits: extensive marketing costs in fighting for market share and high operational costs of delivering fresh food over a large area.

Albertson will soon put the Plated meal kits inside its stores and in time help deliver them with their own trucks.

This deal separates Plated from the largest competitor in the meal kit arena, Blue Apron. One analyst said Blue Apron likely is feeling a bit left out in the cold, and likely feels it needs to find a partner in the form of a store chain and as soon as possible.

Stock at Blue Apron jumped 2% during trading after hours after it had traded down during the day by over 5%.

Both meal kit businesses and grocers have been scrambling in reaction to the acquisition by Amazon for $13.7 billion of Whole Foods Market earlier during the spring.

Stock at Kroger has dropped by close to 30% since Amazon’s deal became public. The largest and only meal kit company that is public, Blue Apron, has a current market capitalization of more than $992 million, far below its $2.2 billion value that it held in private markets.

Amazon experimented with making meal kits before it acquired Whole Foods, and put meal kit businesses on alert during July when it registered a new U.S. trademark for a new service where it said it would do the prep and the customer would be the chef.

The soon to be service would provide its customers with prepared food kits that are ready to assembly and cook as a complete meal, showed the contents of the application for a trademark.

Amazon has nearly 31 million households that have access to Amazon Prime and over half of those already buy groceries online through its website.

The access it has to close to 400 Whole Food locations across the United States could fortify further its place as a competitive player in the meal kit space.

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