Elementaree service buys out the business of its competitor “Taste for Home”

Consolidation continues in the meal kit delivery market. The Elementaree service is buying out the business of its competitor, Taste for Home, which is experiencing difficulties during the crisis. It is now easier for large players to manage costs and find new sales channels than for small ones. In this regard, experts expect further consolidation of the segment, where in the end there will be two large operators.

Elementaree is buying out the business of the Taste at Home service, which also delivers food kits for preparing recipes, the parties to the transaction told Kommersant, without disclosing the amount. Elementaree will take over the Taste at Home customer base, as well as the commitment to continue to provide the company’s customers with kits.

The main owner of the service is its founder Olga Zinovieva, her share is not disclosed. Ex-CEO of Rusagro Maxim Basov owns 15% of the company. Also co-owners are the founders of Damate Group of Companies Naum Babaev and Rashid Khayrov, and investors are the Russian Direct Investment Fund and Bonduelle, which invested about $5 million in the service in 2020.

The transaction amount between Taste at Home and Elementaree could be about 10–15 million rubles. based on 3 thousand rubles. for each client of the company, the number of which is about 5 thousand people, says General Director of Infoline-Analytics Mikhail Burmistrov. The founder of Shefmarket, Sergei Ashin, does not rule out that the deal could have been without money, given the small client base of Taste for Home.

The crisis and blocking of social networks, which were the main channels for promoting products, had a tangible impact on the Taste for Home business, explains co-owner of the service Kirill Pertsovsky. With a sharp drop in orders, the service faced financial difficulties, he continues. After several unsuccessful attempts to support the sustainability of the business with investments, a decision was made to partner with Elementaree to acquire part of the assets, adds Mr. Pertsovsky. Elementaree also suffered from social media blocking, but thanks to a stable base of loyal customers, the service was able to continue operating, adds Olga Zinovyeva.

Small players in the segment of delivery of ready-made kits now do not have many options for development, so it is logical to sell the business to a larger operator, says Mikhail Burmistrov. Against this background, he notes, market consolidation continues. The presence of large players with their own facilities allows them to control the cost of production, while small players with contract manufacturing do not have such opportunities, notes Mr. Burmistrov. He predicts that by the end of 2023, only two players will remain in this segment – Elementaree and Shefmarket, the rest will be absorbed or leave the market.

The market for the delivery of food packages and ready-made food rations has also been affected by the trend towards savings. This year, Infoline expects, the total revenue of operators may decrease to 15.5 billion rubles. This will happen, in particular, due to the launch of budget lines by players, as the Performance Group did in 2023, and in 2022 – Grow Food, which launched a separate brand in the low price category “Priyem”.

Daria Andrianova