The world’s biggest food group Nestlé has bolstered its DTC credentials with the $950m acquisition of US meal delivery service Freshly.
Founded in 2015, Freshly delivers a menu of fresh, chef-cooked meals to customers across the country.
Nestlé purchased an approximately 16% stake in Freshly in 2017 as a strategic move to evaluate and test the burgeoning market.
The deal values Freshly at $950m, with potential earnouts up to €550m contingent to the successful growth of the business.
This transaction was signed and closed on Friday and announced after the markets closed.
Nestlé said the move brings together its “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”.
Nestlé USA Chairman and CEO Steve Presley commented: “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.”
Nestlé said 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 currently ships more than one million meals per week to customers in 48 states. Its 2020 forecasted sales are $430m.
Freshly CEO Michael Wystrach commented: “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.”