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Kroger buys Home Chef meal-kit delivery service

The grocery-store chain will acquire Home Chef, the largest private meal service in the US, for $200 million in a bid to grow its meal-kit business.

Kroger will buy the Home Chef meal-kit delivery company for $200 million, the grocery store chain announced Wednesday. Kroger's purchase of the largest private meal kit company in the US gives the store a huge advantage as it, like other traditional brick-and-mortar groceries, competes with online alternatives in the form of meal kits and grocery delivery from companies like Amazon, which owns Whole Foods grocery stores.

"Customers want convenience, simplicity and a personalized food experience," said Yael Cosset, Kroger's chief digital officer, in a statement. "... This merger will introduce Kroger's 60 million shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger." (Restock Kroger is the company's intiative to "redefine the food and grocery customer experience in America.)

Meal kits contain the preportioned, uncooked components of a meal that you cook on your own. Kroger already sells its own line of meal kits called Prep+Pared in more than 500 stores in the country. When the merger is finalized, the grocery store will sell Home Chef meal kits alongside Prep+Pared in its stores and on its website, according to a statement from Kroger. 

"We've long believed that the future of our industry is omni-channel and bigger than just meal kits sold online. We want to be where our customers are and want to help make cooking at home easier, more accessible and even more enjoyable," Pat Vihtelic, Home Chef's founder and CEO, said in a statement.

Kroger could pay out an additional $500 million to Home Chef over the next five years if the company reaches certain milestones, which include a significant growth of in-store and online sales. According to Kroger's statement, Home Chef grew 150 percent in 2017 with $250 million in revenue.

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