H-E-B Acquires Favor Delivery to Become the Digital Retail King in Texas

H-E-B, the largest supermarket chain in Texas, with annual sales of $25 billion, will have an army of 50 thousand contract drivers at its disposal to strengthen their grocery delivery service with the acquisition of the company Favor Delivery.

The grocery chain, with more than 400 stores, seeks to become a leader in the digital retail industry in Texas, enabling customers to choose how they shop, pay for and receive products. The partnership also complements H-E-B’s brick and mortar operations by growing its online presence to meet customers’ evolving needs and expectations, according to a press release.

Founded in Austin, Texas in 2013, Favor has grown to over 50,000 Runners and has delivered more than 8 million Favors to-date. Favor is currently available in 50 cities across Texas, where it is currently the best rated delivery service.

“We see a unique opportunity with this partnership to support and accelerate each other’s growth through the sharing of experience, insight and resources,” said Martin Otto, H-E-B’s Chief Operating Officer.

With Favor, H-E-B gains access to best in class consumer facing technology and the on demand company’s advanced delivery system. H-E-B will also leverage Favor’s data driven approach to capture valuable insights to deliver the best customer experience possible.

Favor, which has a corporate staff of about 140 people, will continue to operate independently as a separate brand and be led by chief executive officer Jag Bath.

H-E-B becomes the largest privately held employer in Texas

“H-E-B’s extensive resources, capital and retail food industry experience will enable us to further build on our momentum and significantly accelerate our growth throughout Texas,” Bath said.

The Dallas Morning News reported that companies are spending hundreds of millions of dollars in some cases to buy technology and support services to boost their online shopping capabilities.

The Food Marketing Institute and Nielsen issued a new forecast last month saying that in as few as five to seven years, 70 percent of consumers will be grocery shopping online. The estimated $100 million in sales, which is equal to every U.S. household buying $850 worth of food and beverages online in a year, will be reached by 2022 or 2024.