Nestlé acquires Freshly prepared-meal delivery service for $950 million

Food and beverage giant Nestlé announced Friday that it has acquired Freshly, a leading fresh-prepared meal delivery service, for $950 million, with potential earnouts up to $550 million contingent to the successful growth of the business.

Founded in 2015, Freshly delivers a menu of fresh, chef-cooked meals to subscribing members across the United States, that, according to the company, breaks down the barriers to healthy eating by delivering nutrition and convenience at scale.

"We are excited to welcome Freshly to the Nestlé family," said Nestlé USA Chairman and CEO Steve Presley. "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. 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."

According to the companies, the move brings together Nestlé's deep understanding of what and how people eat at home, and world-class research and development capabilities with Freshly's highly specialized consumer analytics platform and distribution network to fuel growth opportunities within the Freshly business and across Nestlé's portfolio.

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Nestlé, the largest food and beverage company in the United States, purchased an approximately 16% stake in Freshly in 2017 as a strategic move to evaluate and test the burgeoning market of home-delivered meals. 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. Growing year-over-year since launching in 2015, Freshly is now shipping more than 1 million meals per week to customers in 48 states. Its 2020 forecasted sales are $430 million.

Freshly’s weekly subscription service delivers fresh, chef-cooked meals to customers’ doors that can be heated and served in three minutes. The company’s food philosophy is centered on less sugar, less processed and more nutrients. All meals are gluten-free and single-serve for effortless portion control. Developed by chefs and nutritionists, the menu features better-for-you versions of classic comfort foods with smart ingredient swaps.

“We are extremely excited to expand our relationship with Nestlé,” said Freshly CEO Michael Wystrach. “Our mission is to make eating healthy easy by bringing nutritious, high quality meals directly to customers' homes. 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 Nestlé, we will have access to resources, research and development, and years of experience that we can tap into to catapult our growth plans and move closer to our goal of being in every household in America.”

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Nestlé USA, part of Switzerland’s Nestle S.A., manufactures and markets some of the most recognizable food and beverage brands in the United States, including Nescafé, CoffeeMate, DiGiorno, Stouffer’s, Haagen-Dazs and many more.

"At Nestlé we know the at-home food market and we know how to win there,” said Laurent Freixe, Nestlé CEO Zone Americas. “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. 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."