Texas' largest private employer, grocery chain H-E-B, announced Thursday that it had purchased Favor Delivery -- an Austin-based, on-demand delivery service for an undisclosed amount of money.
Favor will become a wholly-owned subsidiary that operates independently with its own CEO. H-E-B will keep all of Favor's employees and its 50,000 contract delivery drivers, who are called runners.
Favor was founded in 2013 and currently operates in 50 cities across Texas -- more than doubling its footprint in the state last year. To date, Favor has made more than eight million deliveries. Locally, the service offers delivery in Waco but not Temple or Killeen.
“We could not be more excited to be part of H-E-B,” Favor Chief Executive Officer and President Jag Bath said in a statement. “I am incredibly proud of our team’s success and the business we have built at Favor. 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.”
The deal is the largest investment H-E-B has made in its continued quest to incorporate digital technology into its grocery services. The grocery store already offers some grocery delivery through HEBtoYou, as well as Curbside Pickup of online orders at more than 100 stores. And, H-E-B's website allows customers to order and ship merchandise to 48 states and military bases worldwide.
“I am thrilled to have H-E-B join forces with another well-respected and innovative Texas company,” H-E-B’s Chief Operating Officer Martin Otto said in an email. “We share similar values, including a commitment to excellence in customer service and to our greatest resource – our people. Over the past two years, we have established a strong working relationship with Favor that has proven to be immensely successful for both companies. We see a unique opportunity with this partnership to support and accelerate each other’s growth through the sharing of experience, insight and resources.”
H-E-B boasts annual sales of roughly $25 billion and serves millions of customers at its 400 stores between Texas and Mexico. This year, the company -- which employs more than 106,000 people between both countries -- will celebrate its 113th anniversary.