Nestle USA acquires meal delivery company Freshly

Date : 02 November 2020

Stewart Samuel

Program Director - Canada

Following a strategic investment in the company in 2017, Nestlé USA has acquired Freshly, a subscription-based meal delivery service.

Removing the barriers to healthy eating

Freshly is a weekly subscription service which delivers fresh, chef-cooked meals that can be heated and served in three minutes, directly to customers’ doors. Central to the company’s ethos is a focus on removing barriers to healthy eating, with its food philosophy centered on less sugar, less processed, and more nutrients. All meals are gluten-free and single-serve for easy portion control. In 2017, Nestle led a $77m funding round in the business, representing around 16% of the company, to evaluate and test the market.

Source: Nestle

Shipping more than 1m meals each week

The acquisition of Freshly values the company at $950m. It brings together Nestlé's deep understanding of what and how people eat at home and its research and development capabilities with Freshly's specialised consumer analytics platform and distribution network. It currently ships more than 1m meals per week to customers in 28 states, with sales forecast to reach $430m this year.

Longer-term pandemic legacy

The deal comes as consumers are eating more meals at home and are embracing delivery services. Retailers and foodservice operators have been innovating to capture the evening meal opportunity in particular, with a focus on ease and convenience. However, this deal marks the first time a major CPG has entered the meal delivery space, suggesting that Nestlé expects these shifts in consumer behaviour to outlast the current pandemic. Freshly’s focus on health and wellbeing is also highly relevant in the current environment, as we also expect consumers to maintain a heightened focus in this area, both due to COVID-19 and longer-term demographic shifts. This deal looks a great fit for both parties, with Freshly benefiting from Nestlé’s scale to accelerate its expansion during a period of growing demand.

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