ARLINGTON, VA. — Nestle USA has acquired a minority interest in the direct-to-consumer meal delivery company Freshly. Freshly is a weekly subscription service that delivers meals to consumers.
Nestle is the lead investor in a $77 million round of new funding raised by Freshly. As part of the agreement, Nestle USA's Food Division president Jeff Hamilton joins Freshly’s board of directors.
“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,” said Paul Grimwood, chairman and chief executive officer of Nestle USA. “Acquiring a position in Freshly not only gives us access to this growth market, but it also brings reciprocal benefits for both companies. Nestle 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.”
The funding will be invested in the construction of a new kitchen and distribution center in Savage, Md., in 2018, as Freshly prepares to expand to nationwide service. With a plant in Phoenix, Freshly can currently ship to approximately 40% of consumers in the United States. Upon completion of a new facility, Nestle estimated Freshly will be able to serve about 93% of the U.S. population.
“We are extremely excited to work with and to learn from Nestle, the largest food company in the world,” said Michael Wystrach, c.e.o. of Freshly. “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.”
With its headquarters in New York and operations in Phoenix, Freshly currently employs 400, and management plans to hire additional employees over the next 12 months. The company’s service features a rotating weekly menu of 30 prepared meals.
“Freshly is directly aligned with Nestle’s strategic focus on finding new avenues to deliver delicious, nutritious meals to consumers in a way that fits their busy lives,” Mr. Hamilton said. “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.”