Kroger Co. on Friday announced it has made a “meaningful investment” in Lucky’s Market, the Niwot, Colo.-based natural and organic chain with 17 stores in 13 states.
Described as a strategic partnership, Kroger said the investment would “significantly accelerate Lucky's Market's growth in new and existing markets.” Financial terms were not disclosed.
The deal provides more indication of Kroger’s ambition to explore smaller, fresh-focused stores. It opened a similarly focused store under the Main & Vine banner earlier this year near Seattle and was among the finalists in pursuing a potential acquisition of The Fresh Market, which last month announced it would be sold to private equity firm.
Lucky's "Organic for the 99%" store format emphasizes an expansive selection of natural and organic food, including fresh produce, meat and seafood, prepared foods and baked goods, as well as wine and beer and personal care goods. The company was founded by CEO Bo Sharon and his wife in Boulder, Colo. in 2003. It has located a number of its stores in university towns and grown rapidly since 2013.
Steve Black, a former top executive at Sprouts Farmers Markets, joined Lucky’s last year as its president.
With stores averaging approximately 30,000 square feet, Lucky's layout resembles an indoor farmers market, with "garage door" entrances, field bins, barrels and wooden crates. Its culinary department showcases great tasting, restaurant-quality prepared foods made from recipes that include those developed by Sharon and his wife Trish.
Through its "L" private label, Lucky's provides a broad range of grocery items at great value that have no artificial colors, flavors or preservatives, and 10% of profits from its private label are reinvested in the communities it serves.
“This strategic partnership is designed to further enhance the best products, practices and techniques Lucky's Market has to offer,” Kroger said. “These strengths, combined with Kroger's scale and experience, will in turn create benefits for customers and help Lucky's Market grow over time. This alliance also demonstrates Kroger's deep ongoing commitment to providing customers with affordable fresh organic and natural foods as a part of its Customer 1st strategy.”
“It is a very special day in our industry when our largest traditional grocer and one of our fastest-growing specialty grocers form a strategic growth partnership,” said Scott Moses, head of food retail investment banking at Sagent Advisors, LLC, and advised Lucky’s on the transaction. “Lucky’s is truly unique in its mission, its ethos and its egalitarian approach to good, healthy food. With Kroger’s help, we expect Bo and the Lucky’s team to continue their rapid growth and really make a mark in the sector over the next few years. We are honored to have played a part in helping these two great companies embark on this exciting journey together.”