As the demand for processed packaged meals keeps reducing generally, Nestlè is looking to separate itself from the image of just a chocolatier and move towards entering the healthy foods market.
That is why Nestlé SA has bought a stake in a subscription meals startup called ‘Freshly’ as the lead investor in a $77 million funding round with previous investors including Highland Capital Partners, Insight Venture Partners and White Star Capital.
Co-founder and CEO Micheal Wystrach presented their startup as a healthy option for on-demand meals. They will be providing a week’s worth of meals in one delivery with each subscription and the customers can heat up a meal whenever they want.
Freshly was founded in 2015 and employs 400 people and it delivers meals to 28 states. This $77 million Series C brings its total funding to $107 million, and it’s meant to fund Freshly’s nationwide expansion. It provides a 30 dish menu that keeps rotating, all of which were created in consultation with nutritionists. Pricing starts at $49.99 per week for four meals.
The stake bought by Nestlè provides them with insight into the customer market, an asset that many consumer goods giants are after. Considering the online prepared meals market is currently valued at $10 billion in the US alone.
This move comes as a competitive one as Nestlé is under threat from Amazon.com Inc., which has been expanding in the packaged and fresh foods space. Last week, Amazon said it was buying Whole Foods for $13.7 billion
The president of the Nestlè Foods division has stated that there is a shift in the traditional food model as customers have become more health conscious and more aware of what they’re consuming.
“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.” said Jeff Hamilton, President of Nestlé Foods Division