Nestlé is getting into meal delivery business with acquisition of food startup Freshly for $950M plus up to $550M potential payouts
Food giant Nestlé announced last Friday it’s acquiring a meal prep startup food startup Freshly for $950 million upfront and up to $550 million in potential milestone-based payments. Founded in 2012, New York-based Freshly is best known for its weekly subscription meal service that delivers chef-prepared meals to customers’ homes and workplaces.
In an announcement, Nestlé said, “the deal values Freshly at $950 million, with potential earnouts up to $550 million contingent to the successful growth of the business.” In 2017, Nestlé purchased an approximately 16% stake in Freshly as a strategic move to evaluate and test the burgeoning market. Freshly pioneered the direct-to-consumer prepared meal delivery channel and is known for its use of standard-setting technology and analytics, which will build upon Nestlé’s strong base of innovation.
Freshly has been growing year-over-year since launching in 2015. The meal subscription now ships more than one million meals per week to customers in 48 states. Its 2020 forecasted sales are $430 million.
“We are excited to welcome Freshly to the Nestlé family,” said Nestlé USA Chairman and CEO, Steve Presley. “Consumers are embracing eCommerce and eating at home like never before. It’s an evolution brought on by the pandemic but taking hold for the long term. 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.”
In a blog post, Freshly founder and CEO Mike Wystrach said, “Just over eight years ago we set out to create a company that, put simply, would make healthy eating easier. From that seed, Freshly was born, and in a short amount of time we’ve shipped nearly 100 million meals to 48 states, opened six manufacturing and distribution facilities, offices in three countries, and built a team of almost 2000 employees. For this, I thank you. Whether you’ve been a loyal Freshly customer for years, or are awaiting your first delivery, none of this would’ve been possible without your support.”
Freshly is one of the leading manufacturers of fresh-prepared meals in the US. As part of the acquisition, Freshly will “gain even more industry expertise while still retaining the heart of what makes us ‘us,’” Mike said. Freshly CEO also assured the customers saying that: “your meals, pricing, and subscription will remain just as you know them.”
Founded in 2012 by Michael Wystrach and Carter Comstock, Freshly delivers gourmet ready-made meals, prepared and delivered at the door. It is dedicated to making healthy eating and achieving health and fitness goals easier than ever. They simply want to improve life by delivering fresh, healthy, and delicious meals to the doorstep.
Freshly makes this possible and easier than ever by offering high-quality, professionally-prepared meals, based on the paleo principles. The experienced chefs at Freshly utilize locally-sourced and all-natural ingredients to create fresh, gourmet ready-made meals designed to optimize health. Each meal is carefully curated with all-natural ingredients that are high in protein, low in carbs, and free of gluten, added sugar, artificial sweeteners, and hormones.