Kroger buys Home Chef to take bigger bite of meal-kit market

FILE - This June 17, 2014, file photo, shows a Kroger store in Houston. Kroger, looking to take a bigger bite of the online grocery market, is buying meal-kit seller Home Chef. Home Chef, like other meal-kit companies, sends a box of raw ingredients and recipes to its subscriber’s doorsteps. Kroger will pay $200 million for Chicago-based Home Chef, and may pay an additional $500 million over five years if sales reach certain milestones. Kroger plans to put Home Chef kits in its supermarkets. (AP Photo/David J. Phillip, File)

NEW YORK — Kroger, looking to take a bigger bite of the online grocery market, is buying meal-kit seller Home Chef.

Home Chef, like other meal-kit companies, sends a box of ingredients and recipes to its subscribers' doorsteps. Kroger will pay $200 million for Chicago-based Home Chef, and may pay an additional $500 million over five years if sales reach certain milestones. Kroger plans to put Home Chef kits in its supermarkets.

Competition among meal-kit companies is fierce. Albertsons bought Plated last year, Walmart is expanding its easy-to-make dinners, and meal-kit company Blue Apron started selling some of its kits in Costco stores. Amazon, which bought Whole Foods last year, also sells its own meal kits.

Kroger Co., which has 2,800 stores, says it expects the deal to close in the second quarter.

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