X5 Group acquires Nice Ice smart kitchen to expand ready-to-eat food operations
X5 Group, a premier Russian food retailer listed on the London Stock Exchange (LSE) and Moscow Exchange (MOEX) under the ticker “FIVE”, has announced the acquisition of the Nice Ice ready-to-eat food business located in the Vsevolozhsky District of the Leningrad Region. This strategic move, facilitated by obtaining the necessary governmental permit, positions X5 Group to significantly enhance its food production capabilities.
Integration into X5 Food Business Unit
The acquisition includes a 4,200-square metre smart kitchen that will be integrated into the X5 Food business unit. This unit is tasked with developing the ready-to-eat segment across X5’s extensive retail chain network, including Pyaterochka and Perekrestok stores. The facility is currently capable of producing about 7,000 meals daily and can potentially ramp up production to 70,000 meals per day after further upgrades.
Expansion of Ready-to-Eat Offerings
Olga Feldt, Managing Director of X5 Food, highlighted the benefits of this acquisition, stating, “The acquisition of the smart kitchen will help us to expand the ready-to-eat assortment on our store shelves, accelerate the launch of new product lines and cut production costs, which will make ready meals at Pyaterochka and Perekrestok even more affordable.” This development is expected to bolster X5’s market presence by enhancing its product diversity and cost efficiency in meal production.
Current Production and Future Goals
The existing infrastructure under X5 Food’s management, including both in-house and contracted facilities, currently produces approximately 100 tonnes of ready-to-eat food daily, spanning over 400 different stock keeping units (SKUs). By the end of 2023, ready-to-eat food accounted for 2.3% of sales at Pyaterochka and 6.3% at Perekrestok. With this new acquisition, X5 Group aims to grow its market share in the combined retail and HoReCa (Hotel/Restaurant/Café) ready-to-eat sectors to 9% by the year 2026.
The acquisition of the Nice Ice smart kitchen significantly enhances X5 Group’s capabilities in the ready-to-eat food market, aligning with the company’s strategic goals to increase its market share and improve service offerings across its retail brands. This move is poised to create substantial value for X5 Group, its stakeholders, and customers, by improving the availability and affordability of ready-to-eat meals throughout its retail outlets.