The supermarket industry had its first real disruptor step into the mix when Amazon (NASDAQ: AMZN) agreed to buy Whole Foods for $13.7 billion in June. Now others are taking cues from the buyout as part of a broad consumer shift towards subscription models and ordering everything their household needs via the mobile devices so frequently stuck in their hands.
The latest deal consisted of Boise, Idaho-based grocery chain Albertsons Companies buying meal-kit delivery company Plated for an undisclosed amount yesterday.
That acquisition is reverberating across the industry and sparking conversations about other potential acquisition targets. As the axiom goes, "a rising tide lifts all ships."
Montreal-based Goodfood Market (TSX: FOOD) printed an all-time high at $2.45 in Thursday trading following news of the Plated acquisition. Canada’s top meal-kit company’s previous high was $2.40, according to data from Yahoo Finance, which happened on June 9, 2017, the day the company became public.
Following the same business model as others in the space, Goodfood delivers a personalized box of fresh ingredients with step-by-step directions to prepare a complete, healthy meal.
In its brief time as a public entity, the company has reported a growing subscriber base and revenue. During the fiscal third quarter ended May 31, 2017 active subscribers grew 77% from the quarter ended February 28, 2017 to 23,000. Revenues during the quarter surged 592% from the year prior quarter to $6.4 million, although the upstart is, not surprisingly, still operating at a net loss ($1.22 million) as it grows its business.
Last week, Goodfood said that its active subscriber base during Q4 of fiscal 2017 increased to 31,000, representing a rise of 840 percent from the end of fiscal 2016.
That type of growth, accompanied by the assumption that Albertson’s paid a nice premium and solid valuation for former "Shark Tank" company Plated, has investors wanted to get a piece of Goodfood. After bottoming at $1.30 in July trading, shares are up 81.5% at $2.36 as of the lunch break today.
