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Nestlé announced that it has closed a deal to acquire Freshly, a meal delivery service that operates across the country, for $950 million, and could pay an additional $550 million if Freshly hits certain growth targets and benchmarks.
Founded in 2015, Freshly delivers a menu of fresh, chef-cooked meals to customers that “break down the barriers to healthy eating by delivering nutrition and convenience at scale,” the company announced.
Freshly currently ships more than a million meals per week.
“Consumers are embracing e-commerce and eating at home like never before. It's an evolution brought on by the pandemic but taking hold for the long term,” Nestlé Chairman and CEO Steve Presley said about the deal.
“Freshly is an innovative, fast-growing, food-tech startup, and adding them to the portfolio accelerates our ability to capitalize on the new realities in the U.S. food market and further positions Nestlé to win in the future.”
By acquiring Freshly, officials said Nestlé is looking to compete with meal kit subscriptions like Blue Apron and HelloFresh, though Freshly doesn’t require any of the preparation or cooking that those meal kits require.
“Our mission is to make eating healthy easy by bringing nutritious, high quality meals directly to customers' homes,” Freshly CEO Michael Wystrach added. “Convenience and nutrition are driving forces in the future of food, and our becoming a part of the world's largest food company confirms that.”
With the sale complete, Wystrach said that business operations around Freshly will remain unchanged, and the acquisition will not change the company’s meals, pricing or subscription rates.
“Freshly will continue to operate as a standalone business to accomplish our core mission to remove the barriers to healthy eating with convenient, nutritious and delicious meal solutions, backed by the power of Nestlé to open new doors for a fresher, faster food delivery to your door,” he said.
“We will continue to maintain our own strict standards and maintain complete control of our products,” Wystrach added. “Our meals will not be changing, and there are no plans to change ingredients or integrate Nestlé products into Freshly meals, but we are excited about potential opportunities for the future.”
Nestlé previously purchased a 16 percent stake in Freshly in 2017 as a “strategic move to test the burgeoning market,” the company noted. Freshly is expected to sell more than $430 million worth of kits in 2020, officials said.
“With the acquisition of Freshly we are strengthening our position in the U.S. and expanding our ability to deliver a wide variety of delicious food to our consumers when and where they want,” Nestlé CEO Zone Americas Laurent Freixe said in a statement following the announcement of the sale.
“Whether purchasing our products from the comfort of their homes, in retail stores or through social commerce, we will continue to provide them with unbeatable convenience, choice and ease of purchase."
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