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DoorDash, ALDI Expand Service to Include Alcohol

DoorDash, the local commerce platform, and ALDI, the grocery price leader for six years running, have expanded their partnership, announcing that consumers can now order on-demand alcohol delivery from more than 1,200 ALDI locations across 21 states on DoorDash. With the addition of ALDI, one of America’s fastest-growing retailers, nearly 80% of DoorDash consumers can now access alcohol through safe, age-verified delivery.

“In addition to giving merchants a new way to reach customers, on-demand alcohol delivery helps partners grow their business. On DoorDash, adding alcohol may increase grocers’ average order value by up to 30%. Order values for U.S. convenience orders were on average over 50 percent higher when alcohol was added,” said Fuad Hannon, vice president of new verticals at DoorDash. “We’ve worked hard to build a trusted alcohol ordering and delivery experience. The expansion of our partnership with ALDI reinforces our commitment to provide growth opportunities for local merchants, while simultaneously providing a safe, high-quality experience for customers.”

This expansion comes just a few months after DoorDash and ALDI first announced their partnership to bring on-demand grocery delivery to nearly all ALDI locations nationwide. Now, consumers can conveniently shop the private-label selection of top-quality, award-winning wine, beer, hard seltzers and ciders, along with all their grocery needs, at the affordable prices they expect from ALDI. On-demand orders can be placed from local ALDI stores via the DoorDash Marketplace app or website.

“ALDI offers an everyday selection of private-label adult beverages and rotates in limited, seasonal flavors so there’s something for everyone,” said Scott Patton, VP of national buying, ALDI. “Earlier this month we also launched a new, premium ‘Specially Selected’ wine collection, with most bottles costing under $10. With the expansion of our DoorDash partnership, more consumers can now sip their favorite ALDI products at the prices they love, delivered straight to their door.”

Earlier this year, DoorDash released its inaugural Alcohol Online Ordering Trends Report, a deep dive into the changing landscape of consumer online ordering preferences and emerging dining and drinking trends. The report found that delivery was the preferred way for consumers to safely purchase alcohol with more than 100 percent year-over-year growth for alcohol pickup and delivery on DoorDash from 2021 to 2022. Comfort, convenience, and time-savings are the top reasons consumers say they enjoy using alcohol and delivery services.

Since launching alcohol in 2020, DoorDash has built an impressive alcohol catalog including more than 100,000 SKUs available for purchase across thousands of grocers and restaurants nationwide. U.S. customers across 32 states can access a wide selection of alcoholic beverages, whether it’s to-go drinks from a favorite local restaurant or celebratory champagne from a nearby local store.

DoorDash is deeply committed to delivering alcohol safely and in compliance with local laws and regulations, and has enacted best-in-class safety protocols, including advanced two-step ID verification, alcohol-specific safety compliance modules and a streamlined returns flow for Dashers, and a voluntary self-exclusion or opt-out register for consumers who don’t want alcohol delivered on the platform or in marketing. The company will continue to develop and launch innovative safety features so alcohol deliveries can be responsibly facilitated through the DoorDash platform.

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Kroger, Albertsons Agree to Sell Some Stores, Assets to C&S

The Kroger Co. and Albertsons Companies Inc. have entered a definitive agreement with C&S Wholesale Grocers, LLC for the sale of select stores, banners, distribution centers, offices and private label brands in connection with their proposed merger previously announced on Oct. 14.

The proposed merger will create meaningful and measurable benefits for America’s consumers, Kroger and Albertsons associates, and communities that both Kroger and Albertsons serve by expanding access to fresh, affordable food and establishing a more compelling alternative to large, non-union retailers. This comprehensive divestiture plan marks a key next step toward the completion of the merger by extending a well-capitalized competitor into new geographies. The divestiture plan ensures no stores will close as a result of the merger and that all frontline associates will remain employed, all existing collective bargaining agreements will continue, and associates will continue to receive industry-leading health care and pension benefits alongside bargained-for wages.

C&S is an industry leader in wholesale grocery supply and supply chain solutions, with a strong track record as a successful grocery retailer. Founded in 1918 as a supplier to independent grocery stores, C&S services customers of all sizes, supplying more than 7,500 independent supermarkets, retail chain stores and military bases.

Grounded in its commitment to feeding families across America, C&S operates Grand Union grocery stores and Piggly Wiggly franchise and corporate-owned stores in the Midwest and Carolinas. C&S is deeply invested in the communities where it operates, and this retail expansion will continue its long-standing mission to keep communities fed.

Through its wholesale and retail operations, C&S purchases more than 100,000 products, giving it the ability to provide customers with the best product selection and pricing available. In addition to its franchise and corporate owned supermarkets, C&S provides end-to-end wholesale, supply and marketing services to its retailer customers. C&S also brings experience with the merger process, having been an FTC-approved divestiture buyer in prior grocery transactions with a strong track record of successfully transitioning union employees and their associated collective bargaining agreements.

In anticipation of the agreement, C&S’s 1918 Winter Street Partners retail holding company has been established to ensure a seamless closing process. C&S’s depth of industry knowledge, financial strength and commitment to growing its associates’ careers makes it the right fit to ensure the divested stores, distribution centers and offices grow and thrive for years to come.

“Following the announcement of our proposed merger with Albertsons Cos., we embarked on a robust and thoughtful process to identify a well-capitalized buyer who will operate as a fierce competitor and ensure divested stores and their associates will continue serving their communities in the ways they do today. C&S achieves all these objectives,” said Rodney McMullen, chairman and CEO of The Kroger Co. “C&S is led by an experienced management team with an extensive background in food retail and distribution and has the financial strength to continue investing in associates and the business for the long run. Importantly in our agreement, C&S commits to honoring all collective bargaining agreements which include industry-leading benefits, retaining frontline associates and further investing for growth.”

McMullen continued, “We appreciate our incredible associates who support and serve our customers and communities, and who help both of our companies succeed. C&S will offer exciting opportunities for associates to advance their careers – from frontline associates and store leaders to merchants and other professionals. We are confident the associates joining the C&S family will have an amazing opportunity to continue to build a thriving career in the food industry in one of the largest private companies in our country.

“C&S’s strong operational focus and financial resources, along with a comprehensive operational infrastructure included as part of the divestiture agreement, will position it to successfully operate and continue to grow these iconic brands for years to come. C&S is a values-driven organization that is committed to ending hunger while creating healthier communities – now and for future generations.”

The divestiture plan fulfills the commitments Kroger and Albertsons Cos. set out in their original merger agreement in October 2022 with regard to divesting stores, including:

  • Extending a competitor to new geographies through the sale of stores to a well-capitalized buyer that is led by seasoned operators with a strong balance sheet and a sound business plan;
  • Ensuring that no stores will close as a result of the merger;
  • Maintaining all current collective bargaining agreements, which include industry-leading healthcare and pension benefits, bargained-for wages, and ensuring frontline associates remain employed; and
  • Committing to invest in associates and stores for the long term.

Kroger took several steps to ensure a thoughtful and comprehensive divestiture plan. The terms of the plan support C&S’s ability to operate divested stores effectively and efficiently by providing:

  • Strong teams, with deep industry expertise and the ability to operate at scale, and to drive growth and operational advancements in the divested business;
  • A cohesive set of stores in each geography supported by two regional headquarters as well as banners, and private label brands with strong consumer recognition that will provide C&S with an established base on which to grow its store network; and
  • A robust operational infrastructure, including distribution centers and offices to support both the immediate and long-term success of the divested business.

“I have long respected C&S and its leadership team,” said Vivek Sankaran, CEO of Albertsons Companies. “I am thrilled that C&S’s outstanding capabilities and financial strength will ensure these divestiture stores can continue to grow and serve their communities as they do today. Most importantly, they have made a clear commitment to continuing to invest in and care for associates, including by honoring all collective bargaining agreements currently in place. I echo Rodney’s confidence in the bright future ahead for the associates joining the C&S team.”

“We look forward to welcoming thousands of new associates to the C&S family and providing them the opportunity to build long and successful careers,” said Eric Winn, chief operating officer and designated CEO (effective Oct. 2) of C&S Wholesale Grocers. “As a leader in the grocery industry, we have a strong heritage of value and customer service that is enabled by a deep commitment to our consumers, employees and communities. Today’s announcement is another exciting opportunity for C&S to further expand into the retail market, which is an important component of our growth and future success. We look forward to providing a superior shopping experience that delivers both quality and value to our customers.”

Transaction Details

The divestiture transaction includes 413 stores, along with QFC, Mariano’s and Carrs brand names. Stores under these banners that are retained by Kroger will be re-bannered into one of the retained Kroger or Albertsons Cos. banners following the close of the transaction. In the four states where C&S will have the license to the Albertsons banner, Kroger will re-banner the retained stores following the close of the merger with Albertsons Cos. Kroger will maintain the Albertsons banner in the remaining states. In addition, Kroger will divest the Debi Lilly Design, Primo Taglio, Open Nature, ReadyMeals and Waterfront Bistro private label brands.

The number of stores contained in the divestiture plan by geography is as follows:

  • WA: 104 Albertsons Cos. and Kroger stores
  • CA: 66 Albertsons Cos. and Kroger stores
  • CO: 52 Albertsons Cos. stores
  • OR: 49 Albertsons Cos. and Kroger stores
  • TX/LA: 28 Albertsons Cos. stores
  • AZ: 24 Albertsons Cos. stores
  • NV: 15 Albertsons Cos. stores
  • IL: 14 Kroger stores
  • AK: 14 Albertsons Cos. stores
  • ID: 13 Albertsons Cos. stores
  • NM: 12 Albertsons Cos. stores
  • MT/UT/WY: 12 Albertsons Cos. stores
  • DC/MD/VA: 10 Harris Teeter stores

The above stores (regardless of banner) will be divested by Kroger following the closing of the merger with Albertsons Cos.

Additional Terms of the Transaction

The definitive purchase agreement has customary representations and warranties and covenants of a transaction of its type. The transaction also provides a comprehensive operational infrastructure including eight distribution centers, two offices, five private label brands, and expert district, division and functional associates, to ensure C&S can continue to operate the divested stores competitively and cohesively with no disruption to the associate or customer experience. All fuel centers and pharmacies associated with the divested stores will remain with the stores and continue to operate.

Subject to fulfillment of customary closing conditions, including FTC and other governmental clearance, and the completion of the Kroger-Albertsons merger, C&S will pay Kroger an all-cash consideration of approximately $1.9 billion, including customary adjustments.

Prior to the closing, Kroger may, in connection with securing FTC and other governmental clearance, require C&S to purchase up to an additional 237 stores in certain geographies. If additional stores are added to the transaction, C&S will pay to Kroger additional cash consideration based upon an agreed upon formula.

As a result of the comprehensive divestiture plan announced with C&S, Kroger has exercised its right under the merger agreement to sell what would have been the SpinCo business to C&S. Consequently, the spin-off previously contemplated by Kroger and Albertsons Cos. is no longer a requirement under the merger agreement and will no longer be pursued by Kroger and Albertsons Cos.

Benefits for customers, associates and communities

The divestiture plan is another key step toward the completion of the proposed merger between Kroger and Albertsons Companies. The combination will bring together two complementary companies and create meaningful and measurable benefits for customers, associates and communities. The combination will advance Kroger’s Leading with Fresh, Accelerating with Digital strategy, which is grounded in Fresh, Our Brands, personalization and seamless. By doing so, the combined company will continue to invest in improving the customer experience and serving more communities across the country with fresh, affordable food. With a family of well-known, trusted brands, the combined company will offer customers lower prices and more choices for the fresh foods customers need, want and love – all with a seamless, omnichannel shopping experience.

The combination will allow Kroger and Albertsons Cos. to unlock significant benefits, including:

  • Advancing a Brighter Future for Our Associates. The combined company will benefit associates seeking to grow their careers. Kroger added more than 100,000 good-paying union jobs since 2012, and it anticipates continuing on this trajectory. The retailer committed to investing $1 billion in improving associates’ wages and comprehensive benefits post close. This commitment builds on the $1.9 billion in incremental investments Kroger made in wages and comprehensive benefits since 2018. The combined company has also committed to providing associates with programs aimed at continuing education and financial literacy following the completion of the merger. The combination will create a compelling alternative to large, non-union competitors.
  • Serving More of America with Fresh, High-Quality and Affordable Food. Kroger built its business model on a foundation of bringing customers lower prices and more choices for the foods their families need to thrive. The retailer committed to investing $500 million beginning day one post close to reduce prices for customers in stores across the U.S. An incremental $1.3 billion will also be invested to enhance the customer experience. The combination advances Kroger’s work to make its products more affordable and accessible to more families, ultimately supporting a food system that will feed people across the U.S. for years to come.
  • Driving Meaningful Improvements Where It Matters Most. The combination will create more opportunities to invest in communities across America as the company continues its journey to eliminate hunger and food waste. In June 2023, Kroger announced its commitment to donate 10 billion meals as a combined company upon completion of the proposed merger to families across the country by 2030. Putting this commitment into context, ten billion meals are enough to feed every person in the cities of Seattle, Denver, Chicago and Boston every meal, every day, for nearly two years. As a result of a strategic focus on donating surplus fresh food and charitable giving, the combined company will accelerate its ability to feed its neighbors and reduce waste, especially food waste.

The merger remains on track to close in early 2024, subject to the receipt of required regulatory clearance and other customary closing conditions, including receipt of clearance under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Kroger and Albertsons Cos. remain committed to working cooperatively with the regulators and all other interested parties to complete the transaction and unlock the many benefits it offers.

Read more about the combined company’s commitment to customers, associates and communities at www.krogeralbertsons.com.

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Craft Ice Maker Lux Ice Appoints F&B Veteran Crouse as CEO

Craft ice manufacturer Lux Ice USA has appointed food and beverage industry veteran Michael Crouse as chief executive officer. Crouse joins Lux Ice with over 30 years of commercial and general management experience in both the retail and foodservice sectors in North America. His previous roles included president of US Foodservice at Kraft Heinz and VP/GM of US Supermarkets at the Frito Lay division of PepsiCo. Most recently, he was the head of US prepared foodservice at Tyson Foods.

“We are very excited to have a leader of Michael’s caliber join Lux Ice to lead us in the next chapter of our growth story,” said Shawn Kilcoyne, founder & chairman at Lux. “As we expand our premium craft ice business from retail into restaurants and across other foodservice channels, Michael is ideally suited to rapidly build our distribution and customer partnerships.”

Lux Ice managing partner Mark Rogers adds, “Michael embraces our core values and has quickly demonstrated a passion for our vision to elevate every beverage experience, and to be a company that positively impacts our community.”

“I am thrilled to join the team at Lux Ice USA,” said Crouse. “It’s incredible how far the company has come in such a short period of time, and I’m honored to work with such a talented and diverse group of team members that we have here at Lux.”

Lux Ice USA a leader in the fast-growing craft ice industry, was founded in 2020 by  Kilcoyne. Elevating beverage experiences with slow-melting, crystal clear ice spheres, Lux Ice USA is available at leading retailers, restaurants and other foodservice locations nationwide. Through its core values of trust, agility and ownership, Lux Ice strives to be the “coolest” place to work and engage in its communities to support long-term self-sustaining employment.

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