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Nestlé Enters Online Prepared Meals Market in the US

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Nestlé Enters Online Prepared Meals Market in the US

Nestlé Enters Online Prepared Meals Market in the US
June 20
12:29 2017

Nestlé has acquired a minority interest in Freshly, a leading provider of Direct-to-Consumer (DTC) healthy prepared meals, which currently supplies consumers in 28 states in the US with weekly shipments of meals. As the lead investor in the $77 million round of new funding just announced by Freshly, Nestle is entering an online prepared meals market that is currently $10 billion in size in the US and expected to grow at very attractive rates.

The investment by Nestlé will help to fund Freshly’s construction of a new East Coast kitchen and distribution centre in 2018, as it prepares to expand to nationwide service. Headquartered in New York with operations in Phoenix, Freshly was founded in 2015 and currently employs 400, with plans to hire additional employees over the next 12 months.

Nestlé USA Chairman and CEO Paul Grimwood says: “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.”

“Freshly is directly aligned with Nestlé’s strategic focus on finding new avenues to deliver delicious, nutritious meals to consumers in a way that fits their busy lives,” he adds. “The company was founded by time-constrained professionals who did not have time to cook, but wanted to eat healthy meals. Two years later, their goal to offer heat-and-serve meals has become a successful business that reflects America’s changing eating habits.”

With a 60,000 sq ft facility in Phoenix, Freshly currently can ship to approximately 40% of consumers. Upon completion of a new facility in Savage, Maryland, Nestlé estimates that Freshly will be able to serve about 93% of the US population with prepared meals that can be heated in two-three minutes.

Nestlé expects to lend its expertise to Freshly in sourcing, food preparation and food safety, packaging and distribution, and advertising and marketing.

Nestlé in the US consists of eight main businesses: Nestlé USA, Nestlé Waters North America, Nestlé Nutrition, Nestlé Professional, Nespresso, Nestlé Health Science, Nestlé Skin Health and Nestlé Purina PetCare Company. The United States is Nestlé’s largest market with combined product sales totalling more than $27 billion in 2016.

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