Nestlé announced last Friday that it had acquired prepared meal delivery service Freshly. According to the press announcement, “the deal values Freshly at USD 950 million, with potential earnouts up to USD 550 million contingent to the successful growth of the business.” The deal was signed and closed on October 30th.
Freshly, which provides prepared meals that consumers just need re-heat at home, has raised a total of $107 million in funding. In August of last year, the company was producing 600,000 meals a week. By April of 2020, that number had grown to nearly 1 million meals per week and a Freshly rep told us last week that by August the company was delivering “well over one million” meals each week.
The COVID-19 pandemic, of course, has played a hand in Freshly’s growth, as the pandemic has forced the closure of dine-in options at restaurants and forced more people to eat at home. When we checked in with Freshly in April, the company said that it had basically doubled the number of people over the age of 60 ordering meals, and that the average order size had jumped 20 percent.
Given how the pandemic continues to rage across the U.S. and Europe, people will most likely continue to eat in as much, if not more, considering that the cold winter months are almost upon us and dining outside is not really an option in a lot of places.
In 2017, Nestlé had purchased a 16 percent stake in Freshly. With the outright purchase of Freshly, Nestlé said that it will be able to combine its understanding of what people eat at home and deep research and development with Freshly’s consumer analytics platform and distribution network.
Nestlé’s purchase of Freshly also comes during a bit of a renaissance in direct-to-consumer sales. Brands big and small, among them Pepsico, Impossible Foods, Beyond Meat, and many others, are selling direct to consumers online in addition to traditional retail outlets. Freshly gives Nestlé another such D2C route to sell its brands.
Changes are already afoot at Freshly. In a corporate blog post about the acquisition, Freshly CEO, Michael Wystrach, said that thanks to Nestlé, the company already has plans to increase its menu variety by tripling the number of weekly meals.
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