A shakeup is occurring in the meal kit segment of our industry, and the latest news comes from Blue Apron. The company recently announced a strategic agreement, closing a transaction with FreshRealm to transfer its operational infrastructure, including fulfillment centers, equipment, know-how, and related personnel.
This divestment brought in approximately $25 million of upfront cash for Blue Apron.
As noted in the press release, Blue Apron is now an asset-light company focused on the growth of its direct-to-consumer business. The company plans to continue to build its strong brand and deliver the high-quality products its customers have come to love. Blue Apron expects to accelerate its product offerings' expansion, adding new convenient options, streamlining its business, and driving additional cost savings.
The divestment is subject to certain adjustments, and Blue Apron is eligible to receive up to $25 million of value upon the achievement of certain milestones. Blue Apron was also able to eliminate its debt.
Blue Apron and FreshRealm also entered into a production and fulfillment agreement with an initial term of 10 years, under which FreshRealm will be the exclusive supplier of Blue Apron’s meal kits. In addition, Blue Apron and FreshRealm entered into license agreements, under which Blue Apron licensed to FreshRealm certain rights. In connection with the closing of the transactions, Blue Apron entered into subleases with FreshRealm for its Richmond, California, and Linden, New Jersey, facilities.
View the full release here for more details on the recent agreement.
DMN will continue to report on the meal kit sector and beyond, so stick around for our next update.