Nestlé USA acquires minority stake in Freshly
Nestlé USA has acquired a minority interest in Freshly, a direct-to-consumer (DTC) firm that supplies healthy prepared meals to companies in 28 states.
As the lead investor in the new $77m funding round, Nestle has forayed into the online prepared meals segment that is currently valued at around $10bn in the US.
Under the agreement, Nestlé USA's food division president Jeff Hamilton has joined Freshly's board of directors.
The investment will help Freshly to fund its construction of a new East Coast kitchen and distribution centre next year.
Based in New York with operations in Phoenix, Freshly was founded in 2015 and currently employs 400 people.
Nestlé USA chairman and CEO Paul Grimwood said: "While most food choices are still made in supermarkets, it's clear that consumers are responding to a growing universe of direct-to-consumer options, made possible through innovation.
“Acquiring a position in Freshly not only gives us access to this growth market, but it also brings reciprocal benefits for both companies. Nestlé will gain visibility into Freshly's advanced analytics and its highly effective distribution network and Freshly will benefit from our R&D, nutrition and sourcing expertise."
Through its 60,000ft² facility in Phoenix, Freshly currently is able to cater to approximately 40% of consumers. Following the completion of a new facility in Savage, Maryland, Freshly will be able to serve 93% of the US population with prepared meals.
Freshly CEO Michael Wystrach said: "This investment and close partnership will allow Freshly to continue to expand and rapidly scale our reach in order to achieve our goal of being in every household in America."
Nestlé will offer its expertise in sourcing, marketing, food preparation and safety, as well as packaging and distribution to to Freshly.