Meal-Kit Makers Blue Apron, Goodfood Climb After Kroger's Entry

(Bloomberg) -- Things are looking up for the meal-kit makers of the world.

Blue Apron Holdings, Inc. and Canada’s Goodfood Market Corp. are both rallying on the back of Kroger Co.’s $200 million purchase of Home Chef, the third-largest meal-kit company in the U.S. The deal also includes $500 million of future earnout payments.

The deal “further legitimizes the meal kit industry and illustrates the appetite of large-scale grocers for entering the space,” National Bank of Canada analyst Leon Aghazarian wrote in a note where he reiterated his outperform rating on Goodfood.

Kroger’s move comes eight months after Albertsons Cos. bought Plated, which boosted the odds of a takeout for Blue Apron, Oppenheimer analyst Rupesh Parikh said.

Blue Apron gained as much as 9.1 percent on Thursday while Goodfood surged 14 percent on more than six times its average daily volume.

©2018 Bloomberg L.P.

Bloomberg
Stay Updated With Business News News On BloombergQuint