Nestlé is making its entrance into the meal kit service, as consumers keep an eye on ready-to-eat meals. The company has led a recent round of funding for Freshly, an on-demand food startup.
“The traditional food model is shifting and we continue to see an increase in more health-conscious consumers who are seeking new options and services that fit easily and effortlessly into their lifestyle,” said Jeff Hamilton, President of Nestlé Foods Division, in a press release according to TechCrunch. “Freshly delivers on this need, with an easy-to-use and differentiated brand experience that immediately makes an impact in helping their customers eat healthier each week.”
TechCrunch reported that this $77 million Series C now brings Freshly’s total funding to $107 million. This round of funding has allowed Nestlé to acquire a minority stake in the company, as the company looks to refine its distribution network in U.S. markets.
This latest round of funding will help Freshly gain greater access to the $10 billion market for prepared meals in the U.S., which Nestlé stated it expects to grow at “very attractive rates.”
"We are extremely excited to work with and to learn from Nestlé, the largest food company in the world," said Freshly CEO Michael Wystrach. "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."
As part of the agreement, Hamilton will join Freshly’s Board of Directors. In turn, Nestlé will help to fund a new East Coast kitchen and distribution center that Freshly is looking to erect in 2018. With its current operations, Freshly can service 40 percent of consumers; a new facility would allow the company to ship to around 93 percent of the U.S. population.
Nestlé will also lend Freshly its expertise in sourcing, food preparation, and food safety, in addition to packaging and distribution, and advertising and marketing. Freshly currently serves 28 states, though it is now looking towards nationwide expansion.
How will this move shake up the burgeoning meal kit sector? Deli Market News will report.
