Nestlé USA invests in online meal delivery firm Freshly: 'Consumers are responding to a growing universe of direct-to-consumer options'

By Elaine Watson

- Last updated on GMT

Nestlé USA invests in online meal delivery firm Freshly

Related tags Meal kit Venture capital Meal

As big CPG firms continue to dip their toes in the burgeoning direct to consumer meal kit and meal delivery space, Nestlé USA has acquired a minority interest in Freshly, which supplies weekly shipments of fully prepared meals to consumers in 28 states.

While much of the media attention has been on meal kit brands such as Chef’d and Blue Apron, the online direct to consumer prepared meals market is worth $10bn in the US alone, and is “expected to grow at very attractive rates,”​ said Nestlé USA chairman and CEO Paul Grimwood.

"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... 

"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."

Jeff Hamilton to join Freshly's board

The cash injection – Nestle is the lead investor in Freshly’s $77m funding round - will help finance construction of Freshly's new kitchen and distribution center in Savage, Maryland, in 2018, as it prepares to go nationwide.

Under the deal, Nestlé USA's Food Division President Jeff Hamilton joins the board of directors at Freshly, which was founded in 2015.

Investors are continuing to throw money at meal kit companies; but fully prepared meal delivery services offer greater convenience, says the founder and CEO of Virginia-based Diet to Go​, which has been in the meal delivery business for 26 years. 

Based in New York with a 60,000 sq ft facility in Phoenix, Freshly​ currently employs 400 people, with plans to hire additional employees over the next 12 months, said 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."

Nestle's move follows Unilever's recent investment in meal kit delivery firm Sun Basket​ and Campbell Soup's investments in Habit​ and Chef'd​.

Speaking to FoodNavigator-USA earlier this week, Ooshma Garg, founder of Palo Alto based meal kit firm Gobble​, said: “This space is very attractive both to venture capital investors and traditional multi-billion dollar CPG companies.

"So there are a number of players knocking on our door at the moment and that is extremely exciting.”

Freshly's meals are delivered chilled in a refrigerated box and shipped with ice packs

What's for dinner tonight?

Interested in navigating the direct to consumer meal kit/delivery space? And what about healthy vending?

Checkout our awesome line up of speakers at FOOD VISION USA 2017​, featuring execs from Chef'd, Terra's Kitchen, Sun Basket, PeaPod and Farmer's Fridge.

Food Vision USA signature strip

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