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Nestlé USA Gets Into Meal Delivery Biz With Minority Interest In Freshly

Freshly

Nestlé USA has acquired a minority interest in Freshly, a provider of direct-to-consumer prepared meals, which currently supplies consumers in 28 states with weekly shipments of meals. As the lead investor in the $77 million round of new funding announced by Freshly on June 20, Nestlé enters an online prepared meals market that currently is $10 billion in size in the U.S. and expected to grow.

As part of the agreement, Nestlé USA’s Food Division President Jeff Hamilton joins Freshly’s board of directors.

The investment by Nestlé will help fund Freshly’s construction of a new East Coast kitchen and distribution center in 2018 as it prepares to expand to nationwide service. Headquartered in New York with operations in Phoenix, Freshly was founded in 2015 and currently employs 400 people, with plans to hire additional employees over the next 12 months.

Nestlé USA Chairman and CEO Paul Grimwood said, “While most food choices are still made in supermarkets, it’s clear that consumers are responding to a growing universe of direct-to-consumer options, made possible through innovation. Acquiring a position in Freshly not only gives us access to this growth market, but it also brings reciprocal benefits for both companies. Nestlé will gain visibility into Freshly’s advanced analytics and its highly effective distribution network and Freshly will benefit from our R&D, nutrition and sourcing expertise.”

Hamilton added, “Freshly is directly aligned with Nestlé’s strategic focus on finding new avenues to deliver delicious, nutritious meals to consumers in a way that fits their busy lives. The company was founded by time-constrained professionals who did not have time to cook, but wanted to eat healthy meals. Two years later, their goal to offer heat-and-serve meals has become a successful business that reflects America’s changing eating habits.”

With a 60,000-s.f. facility in Phoenix, Freshly currently can ship to approximately 40 percent of consumers. Upon completion of a new facility in Savage, Maryland, Nestlé estimates that Freshly will be able to serve about 93 percent of the U.S. population with prepared meals that can be heated in 2-3 minutes.

“We are extremely excited to work with and to learn from Nestlé, the largest food company in the world,” said Freshly CEO Michael Wystrach. “This investment and close partnership will allow Freshly to continue to expand and rapidly scale our reach in order to achieve our goal of being in every household in America.”

Freshly’s most popular meals include Sicilian-Style Chicken Parm with Broccoli (with 50g protein, 510 calories and 17g carbs), Steak Peppercorn with Sautéed Carrots and Asparagus (33g protein, 500 Calories, 30g carbs) and Roasted Turkey with Quinoa Stuffing (41g protein, 560 calories, 33g carbs). Freshly’s subscription-based model offers various meal plans to consumers.  The company’s website highlights a rotating menu that includes many gluten-free, paleo, high protein, low carb or veggie-based meals.

Nestlé says it expects to lend its expertise to Freshly in sourcing, food preparation and food safety, packaging and distribution, as well as advertising and marketing.

About the author

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Kristen Cloud

A former newspaper editor and publisher, she once enjoyed leisurely perusing the grocery store aisles but, since having a baby in 2016, she is now an enthusiastic click-and-collect shopper.

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