Weight Watchers Goes After Blue Apron With Meal-Kit Effort

(Bloomberg) -- The meal-kit industry is getting a little more crowded.

Weight Watchers International Inc., the weight-loss company backed by billionaire Oprah Winfrey, is launching a line of “quick prep” kits that will be sold in grocery stores. The move is part of an expansion by Chief Executive Officer Mindy Grossman, who is trying to parlay a rebound in membership into a business that stretches into new areas.

The weight-loss program also will start selling kitchen tools and is teaming up with Los Angeles-based celebrity chef Eric Greenspan to develop recipes that work with Weight Watchers’ new Freestyle program.

For Blue Apron Holdings Inc., a company that helped pioneer the subscription meal-kit industry, the move brings one more potential competitor. Brick-and-mortar retailers have increasingly been offering the ingredient boxes in a bid to appeal to consumers looking for convenient meals.

Walmart Inc., the largest seller of groceries in the U.S., announced this week it would offer meal kits in its stores. And supermarket chain Albertsons acquired Blue Apron rival Plated last year.

Weight Watchers, which was saddled with debt and struggling with a customer exodus, has mounted a comeback since Winfrey took a stake in the company and agreed to pitch the brand in 2015. The company’s shares nearly quadrupled last year and have surged in 2018 -- helped by technology upgrades and the more flexible Freestyle program.

Blue Apron shares slipped as much as 17 percent to $2.06 after the announcement, dropping to their lowest intraday price since their initial public offering in June. Weight Watchers, meanwhile, is up more then 40 percent this year.

As it seeks to maintain its momentum, Weight Watchers is looking to offer more packaged food and other items. The products announced Thursday, which will be sold under the brand “WW Healthy Kitchen,” will be unveiled next week at a conference in Chicago.

“Our goal is to be a partner to everyone on their pursuit toward healthier living,” Grossman said in a statement.

To contact the reporter on this story: Craig Giammona in New York at cgiammona@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Jonathan Roeder

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