Kroger Company (KR) is getting out of the online wellness business. The grocery giant announced Friday it's handing off Vitacost.com to iHerb, marking another step in its campaign to strip away anything that doesn't look like selling groceries.

Back to Basics

The deal closed on January 8, wrapping up months of Kroger evaluating which parts of its business actually belong in a supermarket company's portfolio. Vitacost, it turns out, didn't make the cut.

Kroger's plan is straightforward: take the capital and energy currently tied up in wellness supplements and redirect it toward what the company actually does best. That means food retail, supply chain upgrades, and making stores better places to shop.

Ron Sargent, Kroger's chairman and CEO, framed the move as part of a larger housecleaning effort. "As we shared earlier this fiscal year, we are reviewing all non-core assets to determine their ongoing contribution and role within the company as we make progress on our key priorities: simplifying our organization, improving the customer experience, and focusing on Kroger's core business," Sargent said. "The sale of Vitacost is an important step in that process."

What iHerb Gets

For iHerb, picking up Vitacost isn't just about acquiring inventory. The company is betting on the brand itself, which comes with name recognition and a customer base that already trusts it for health and wellness products.

Emun Zabihi, iHerb's chief executive, emphasized the strategic value. "The acquisition of the Vitacost brand represents a strategic investment in a name long associated with quality, value, and trust among American health and wellness consumers," Zabihi said. "Vitacost's strong brand equity and established customer base complement iHerb's global platform and capabilities, enabling us to further strengthen our leadership in the online health and wellness market."

The Transition Details

Both companies say they've coordinated to keep disruptions minimal. Employees and customers should see a smooth handoff, though neither side disclosed what iHerb actually paid for the business.

What Kroger did clarify: the sale won't change its financial guidance for fiscal 2025. The company is sticking with its previous projections, suggesting this was more about strategic fit than financial necessity.

Kroger shares were down 0.35% at $59.58 at the time of publication on Friday.