Food Business News - July 15, 2014 - (Page 24)

Kroger makes move to bolster e-commerce presence we can extend the reach of Kroger's business by finding new customers who appreciate complementary health-focused brands like Simple Truth." The Kroger Co.'s Simple Truth line of products, launched in September 2012, has proven to be a success story. The company earlier this year said that sales have grown at an "astonishing pace." Mark Ellis, president and chief operating officer of Kroger, in March said Simple Truth could be a billion-dollar brand by the end of fiscal 2014. He said Kroger added more than 100 items to the line during fiscal year 2013, ended Feb. 1, 2014. Expanding the digital footprint CINCINNATI - The Kroger Co. has agreed to acquire, Inc., an on-line retailer of products that include natural and organic foods. Under terms of the transaction, Kroger would purchase all of's outstanding shares for $8 per share in cash, or approximately $280 million. " offers more than 45,000 items, including vitamins, minerals, herbs, supplements, sports nutrition, beauty care products, and natural and organic foods to approximately 2.3 million active customers," Mike Schlotman, senior vice-president and chief financial officer, said during a July 2 conference call with analysts to discuss the transaction. "Their core focus on healthy living products is highly complementary to our fastgrowing natural foods business, and we intend to grow's position in the on-line nutrition market. We believe 24 FOODBUSINESS NEWS ® Mr. Schlotman also said Kroger is excited about's extensive e-commerce expertise, proprietary technology and turnkey ship-to-home fulfillment capabilities. "We see opportunities to integrate Vitacost's platform with our existing digital footprint," he said. "For example, we could potentially link's more than 45,000 s.k.u.s (stock-keeping units) to, and, over time, use the Vitacost on-line retail platform to make even more products available for purchase on-line. By linking it to our extensive digital offerings, we can create exciting new levels of personalization and convenience for our customers." Mr. Schlotman said about 10,000 of's 45,000 s.k.u.s overlap what Kroger currently sells. Change in thinking? A little more than a year ago, then Kroger president and chief operating officer Rodney McMullen told analysts that Kroger was hard at work on getting the scale and profitability needed to make ecommerce a viable service for the company. He said the company had been experimenting with on-line retailing and home delivery at its King Soopers stores in Denver for several years, and the service was continuing to grow "at a modest rate." In the question-and-answer portion of the conference call on July 2, Mr. Schlotman was asked whether Kroger is now a little more optimistic about the potential of on-line grocery as a viable business model. "If you listened to our words, exactly what we said, we aren't talking about delivering fresh product and those kinds of items, which we have always thought is a difficult formula to get right," Mr. Schlotman said. "That is why we have had what we are doing in Denver for so long and haven't expanded it. We keep learning from that, but we haven't solved the formula for that in the Denver market, which is why we haven't expanded it outside that market. "When you look at that home delivery model, and you compare and contrast that with the Express Lane model that Harris Teeter has, and the success of that and the growing sales that are on that platform, and the fact that that's profitable. And combine that with the opportunity for the customer to now have another way to interact with us for shelf stable products, I think the combination of those three winds up becoming pretty powerful." FBN July 15, 2014

Table of Contents for the Digital Edition of Food Business News - July 15, 2014

Food Business News - July 15, 2014
ADM betting billions on flavor category
Bumper corn, soybean crops on the way
Dairy Business News - Managing the mouthfeel of dairy products
Table of Contents
Web Contents
Editorial - Food as medicine trend gaining momentum
Bob Evans trying to capitalize on chicken
Protein, gluten-free products coming from General Mills
Mars accelerating health and wellness strategy
Path cleared for Tyson to acquire Hillshire Brands
Nestle sells Juicy Juice business to private equity firm
Five profiles for protein-rich product development
Hormel adding muscle to its Specialty Foods business
Major C.P.G. manufacturers having trouble getting noticed
CVS launches better-for-you snack line
Kroger makes move to bolster e-commerce presence
Raising the bar on sports nutrition
Making insects inviting to eat
What’s for dinner?
The case for insects
Washington - 'Nano' ingredients
Health and Wellness - Cost, ‘cleanliness’ and flavor innovation
Ingredient Innovations - Masking protein’s undesirable flavors
Highlights and Photos from I.F.T. 2014
New Food Products
Ingredient Market Trends - Spring wheat production forecast 6% higher than in 2013
Ingredient Markets
Supplier Innovations and News
Ad Index
Food Business in the News

Food Business News - July 15, 2014