Woolworths Group has entered into a strategic partnership with subscription-based meal kit provider Marley Spoon.
The partnership includes a $30 million investment in Marley Spoon by Woolworths Group and the issue of Marley Spoon shares. The issue of shares will result in Woolworths Group owning approximately nine per cent of Marley Spoon.
The partnership will see both companies work collaboratively to grow the Marley Spoon brand and Dinnerly, Marley’s Spoon’s budget offering, in Australia. The companies will build operational synergies, with an initial exclusive term of five years.
Marley Spoon says it will benefit from Woolworths’ deep industry experience, with the ability to engage with its large customer base, as well as work with its sourcing and supply chain teams.
Woolworths says it will gain valuable insights from Marley Spoon’s market experience as it looks to complement its current customer offering online by promoting Marley Spoon’s meal kits service through the partnership.
“This partnership gives Woolworths exposure to the high-growth ready-to-cook meal kits segment and aligns with our ongoing goal of meeting our customers’ needs for healthy and convenient meal solutions,” Woolworths Group CEO Brad Banducci said.
“Marley Spoon has demonstrated it has a customer focused, innovative and entrepreneurial culture and we are excited to partner with them.”
Mutual synergies, as grocery spending shifts to online
Marley Spoon CEO Fabian Siegel says the partnership and investment by Woolworths provides validation that home-delivered meal kits is a growing segment, that can complement the traditional supermarket online offering.
“As grocery spending shifts to online, home-delivered meal kits will play an increasingly large role in helping consumers create healthy weeknight meals and save time,” he said.
“We see this partnership delivering important benefits to both Marley Spoon and Woolworths, with both parties incentivised to grow Marley Spoon’s business in Australia.
“We are very excited about this opportunity which will help us to realise our strategic plan and to demonstrate the full potential of this business. The opportunity to improve both our top-line growth, and our contribution margin, along with the injection of further capital, will support the company in its transition to profitability.”
About Marley Spoon
Founded in 2014, Marley Spoon is a subscription-based weekly meal kit service that services customers in three primary regions: Australia, United States and Europe (servicing Austria, Belgium, Germany and the Netherlands). As of 31 March 2019, Marley Spoon had over 190,000 active customers across both the Marley Spoon and Dinnerly brands.
According to Nielsen research, meal kits are a small category with the potential to have a significant impact on the traditional and online grocery retail market.