Sushi merger could mean additional kiosk growth in grocery stores

Dive Brief:

London-based chain Yo! Sushi is merging with SnowFox, a Houston-based supermarket sushi operator with 700 kiosks across the U.S., according to The Wall Street Journal. The sale is expected to cost Yo! more than $100 million. The combined group is expected to have annual sales of $425 million.
The merger will open up growth opportunities in North America, where the U.S. grocery sushi market alone is estimated to be worth more than $1 billion dollars, the companies said.
In 2017, Yo! purchased Canada’s largest sushi business, Bento Sushi. Bento had more than 600 locations and supplied sushi to 1,700 partners in Canada.

Dive Insight:

The new entity gives Yo! Sushi a broader customer base and the opportunity to extend its brand further into grocery stores and other retail outlets.

Sushi kiosks have become a fixture in U.S. grocery stores as consumer palates have become more adventurous and demand for convenient meal solutions has grown. Still, there's ample room for additional growth, with 36% of grocery stores selling fresh or frozen sushi, according to the Journal.

Millennial shoppers, in particular, crave unique flavors along with convenience, and their tastes promise to fuel expansion and future innovation. Consumers also view sushi as a healthy prepared food option.

There is also growing popularity of ethnic-focused grocerants, with the likes of Be-Se-To, which offers Korean-style eateries in addition to a mix of Asian products, expanding into new locations. Eataly is planning an expansion into Texas. Whole Foods, Kroger and Hy-Vee have all been expanding their in-store restaurants as well.

There’s yet another food trend that makes sushi — and other Asian prepared foods — a good fit for supermarkets: the growth of the American consumer’s appetite for ethnic food. As the country grows more culturally diverse, those shifts are having a marked impact on food preferences. In a separate report, Nielsen tracked a 5% growth in Asian products across the store.

Grocers reel in more than $1 billion annually in sushi sales, according to the Journal, while Nielsen estimates sales growth in the category at 13% per year.