Dive Brief:

• Albertsons has bought meal kit company Plated for an undisclosed amount, the company announced in a news release yesterday. The deal is expected to close later this month.
• The deal, which had been previously rumored, gives Albertsons the brand recognition and expertise of a leading meal kit company, while Plated gains access to 2,300 stores and the financial backing of one of the largest supermarkets in the U.S. The companies say they plan to offer meal kits in stores as well as online. 
• "Plated knows its customers better than anyone, and together we will accelerate our ability to serve them,” Albertsons CEO Bob Miller said in the release. “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.”

Dive Insight:

Speculation has been building in recent weeks that a major grocery retailer would acquire a meal kit company. On paper, the partnership makes sense: Grocers want to tap into the fresh appeal and personalization that meal kits offer, while meal kit companies are eager to break out of the crowded online-only market and get inside stores. The deal could also be an effective way to battle Amazon, which has begun testing its own meal kits.

Still, there have been lingering questions. Would grocers be scared off by the challenges meal kit companies — most notably Blue Apron — currently face? And do retailers that already have considerable culinary know-how and plenty of fresh ingredients on hand really need to acquire another company to put everything together? Major grocers like Kroger and Publix have come up with their own meal kit brands, and are seeing strong sales so far.

For Albertsons, at least, this deal seems like a winner. The Boise, Idaho-based retailer has been in acquisition mode for several years, and has a reputation for effectively cutting costs while leaving businesses to run autonomously. This approach could very well rein in the high marketing costs that meal kit providers like Plated are incurring, while at the same time leave the company to do what it does best — culinary innovation.

Albertsons is also aggressively expanding its e-commerce footprint, with plans to soon offer home delivery across its collection of banners. A strong meal kit offering could draw new customers to the platform.

At the same time, meal kits are proving a natural fit inside grocery stores. They’re a convenient meal solution that shares DNA with the prepared foods that have become so popular in recent years. Some retailers are choosing to merchandise them at the front end, where customers can easily grab them for a quick purchase or tack them onto a larger shop. According to Nielsen Fresh, supermarkets tallied $81 million in meal kit sales last year, and stand to make considerably more this year.     

As for Plated, this deal amounts to a major expansion and a chance to become the first omnichannel meal kit company. Customers, meanwhile, can expect the service to continue as usual. 

“Alongside other premium Albertsons brands including Pavilions on the West Coast and Safeway on the East, we’ll operate independently and Plated will continue to be the brand you love,” Plated wrote in an email to customers.