What Albertsons' Deal to Acquire Plated Means for the Food Business

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By Erik Thoresen, Principal, on September 26, 2017

What does Albertsons’ $200 million deal to acquire Plated (DineInFresh, Inc.) mean for the food business? First, while many analysts point to the acquisition as a signal that the meal kit market is maturing, it is not entirely unexpected. In fact, it’s fair to expect that the rate of future acquisitions of players in the meal kit space could accelerate, particularly as retailers intensify their focus on expanding online offerings in wake of the Amazon acquisition of Whole Foods.

As an industry, we’ve discussed that the traditional definitions of “online” and “brick-and-mortar” continue to change. It is important to keep in mind that food is a dynamic business and the emergence of the meal kit market in the U.S. over the last five years helped to demonstrate that consumers are willing to adopt new approaches to sourcing food. Like many of the emerging direct-to-consumer platforms, the meal kit business model has changed and been fine-tuned over the last several years. The Albertsons deal will likely bring about a more significant shift in terms of where meal kits are sourced (in-store versus online). It also further contributes to the growing omnichannel movement when it comes to food sourcing.

But at its core, the value proposition of meal kits involves a box of premeasured ingredients, customized for buyers, that are typically designed to drive discovery of new recipes and new methods for preparing food at home. The Albertsons-Plated deal will impact the balance in terms of whether these kits are delivered to consumers’ doorsteps or whether an in-store strategy also makes sense. Furthermore, it may also trigger discussions about future acquisitions within the meal kit sector—the futures of Blue Apron and others in the meal kit space are already talking points in the media this week.