Metro’s acquisition of a majority interest in the ready-to-cook meal delivery subscription service MissFresh is a low-risk move that adds new organizational capabilities, and provides a gateway into the fast-growing subscription based e-commerce space, an analyst says.
Stewart Samuel, program director of IGD Canada, said Metro’s investment would accelerate MissFresh’s growth and development in Canada, while extending the retailer’s reach outside of Ontario and Quebec for the first time. According to its website, MissFresh delivers “almost anywhere in Canada.”
He said the deal complemented Metro’s nascent e-commerce business while also benefiting its brick-and-mortar stores – which could sell MissFresh meal kits and serve as an alternative pick-up location for the service’s customers.
MissFresh is part of a growing wave of online services specializing in ready-to-cook meal kits, including Blue Apron, HelloFresh and Canadian entrants such as Personal Gourmet and Chef’s Plate.
A 2016 report by Chicago-based research firm Technomic noted the global meal kit industry topped US$1 billion in 2015. It predicted revenues would top US$10 billion by 2020, fuelled by consumer acceptance of the subscription service model and a “strengthening” food culture among mainstream consumers.
Samuel said MissFresh would further complement Metro’s in-store offer, where it has developed what he described as an “extensive” range of prepared and food-on-the-go offerings.
Entrepreneurs Marie-Eve Prevost, Bernard Prevost and Ritter Huang established MissFresh in Montreal in 2015. According to Metro, the co-founders will retain a 30% stake in the company, while continuing to take an “active part” in the company’s management. Financial terms of the deal were not disclosed.
Metro spokesperson Geneviève Grégoire called the ready-to-cook segment a “promising market” and said the deal reflected the company’s commitment to responding to “emerging needs and behaviours” in the food sector.
“MissFresh’s offer is complementary to what we have in store, which will help us better meet the needs of consumers,” she said. “MissFresh is a young, dynamic Quebec company focused on healthy eating. They were chosen for the quality of their concept, [their] way of doing business and products. It is also a passionate and skilled management team.”
Grégoire said Metro would share its knowledge of the Ontario and Quebec markets, in terms of both operations and marketing, with MissFresh, while also providing the financial resources to help accelerate its development.