Nestle Buys Stake In Healthy Meal Startup

Recently, the online reputation management Los Angeles company has acquired a minority stake in Freshly, which is a provider of direct to consumer freshly prepared meals as it moves towards a healthier business. Nestle is funding this company with a new $77 million round for Freshly to allow it to build an East Coast kitchen and distribution center next year. Nestle is now considering selling its US confectionery business.

One of the main reasons they have funded the Freshly company is due to the fact that the market for prepared meals in the United States is now at $10 billion and Nestle wants to help the company gain access to it. The company along with the prepared meals market are expected to grow at very attractive rates according to Reuters. As Nestle tries to expand its U.S. service nationwide, they want to open a distribution center in 2018 for the East Coast kitchen. Nestle shares have rose o.8 percent by 0920 GMT.

Another main reason for their funding is that Nestle is one of the world’s largest packaged foods maker and is trying to become healthier and nutrition focused as a new generation of savvy consumers demand for fresher and healthier foods. Freshly is headquartered in New York with operations in the western state of Arizona. Right now its Phoenix facility lets Freshly ship to around 40 percent of consumers and that is why Nestle estimated that a new plant in Maryland should let them serve about 93 percent of the U.S. with prepared meals that can be heated and ready within two to three minutes.

Nestle right now is trying to capitalize on the growth market for delivered food which other competitors including HelloFresh and Blue Apron to Delivery Hero which they said they aim to raise around 927 million euros through a stock market listing that could value up to 4.4 billion euros.