Joshua Hix, the technology entrepreneur who co-founded the meal kit delivery service Plated in 2012, might not have imagined he’d one day be working for a supermarket company but saw the convergence of the virtual and physical food retail worlds as an inevitabile outcome.
Upon Plated’s acquisition by Albertsons Cos., which is expected to be complete this month, Hix will continue to lead the New York-based startup as it confronts a future suddenly dotted with new possibilities. In an interview with SN Thursday, Hix expressed excitement at the prospect of exposing the subscription-based service to millions of new customers who will be able to buy its chef-created, preportioned meal kits in stores in as little as 30 days, and provide a signature offering for Albertsons’ forthcoming rollout of grocery home-delivery.
The following conversation was excerpted from that interview:
SN: Your company now belongs to a major supermarket retailer. Is that an outcome you would have imagined as you got Plated started up?
Hix: Actually, it’s something we thought about for a long time. We set out with a mission of applying technology to food to improve the customer experience around it, and we have been talking to retailers about that for a long time, pretty much from the beginning. And we were really excited when we met the cast from Albertsons, because they are great people but also because of how they run their business. They treat customers great. And we now have access to all of their resources that they can offer. It’s a little surreal, but we have been thinking about how to do the right retail partnership for several years.
SN: So why is it happening now?
Hix: I think it’s a lot of market trends out there. What we’ve heard from retailers over the years is that many of them share the same sort of vision around omnichannel. And you’re seeing even enormous technology companies like Amazon that need a retail channel like Whole Foods. And with Walmart and Jet, you had an enormous retailer than needed an online channel. This is the same sort of thing. They [Albertsons] recognized they needed technology in the online channel, and we certainly recognized we needed a retail partnership and more access. So it’s a good marriage, and I think all of the recent movement in the market has created an elevated sense that these sort of alignments are necessary.
SN: So how do Albertsons greater resources play out for a company like yours?
Hix: Right now, we are online only and subscription only. And there are customers that just love that. I think about my sister in Minneapolis, she has two young kids and they love the weekly ritual of the subscription. It fits into their schedule, into their date nights and they love it. But there are others who frequently work late, or they travel, and can’t really use a subscription. So what we can do now is complete that customer experience. So for subscription folks, we’ll be getting them refrigerated home delivery in eight of the 10 biggest cities in the country very shortly. That will bring a higher level of service, less packaging involved, which is better for the customer experience, and a cost advantage. And we’ll be able to sell in stores, so it’s going be something you can pick up on your way home.
And we’re getting just a tremendous amount of scale – 35 million customers. The whole meal kit category today has about 1 million customers. So that’s enormous an amount of customers who already know and trust Albertsons’ brands. We’ll be able to get in front of those folks in a much more economically efficient way than just buying Facebook ads, which is the way the category has done it so far.
So it’s everything. Refrigerated delivery. The stores. The scale. The people, who are great at Albertsons. So it’s going to be a great partnership.
SN: What would you anticipate happens now to your counterparts in the meal kit business today? Do you see them also partnering up?
Hix: I do think it’s going to be vital to be in the retail channel. How that happens, we’ll have to see.
SN: Analysts estimate Plated does between $200 million and $300 million in annual sales. Is that accurate? And can you comment on published reports describing the price of the deal?
Hix: Unfortunately, I can’t share numbers. The meal kit market overall is about a $1.75 billion business, and I can tell you, we’re one of the biggest players in that.
SN: So what happens next? When will we see the first Plated meal kit in an Acme store?
Hix: Very soon. I think the first one will be out there in about 30 days. And we’ll scale very, very rapidly from there.