Nestle holds a major stake in the purchase of Freshly, the US-based ready meal delivery startup
Date: 2017-06-23   Author: Satarupa De  Category: #news

Nestle holds a major stake in the purchase of Freshly, the US-based ready meal delivery startup

Nestle is ready to hone its distribution network in the fast changing U.S. retail market with its announcement of acquiring a minority stake in the New York based ready meal start up, Freshly. The announcement of the deal has come just after few days post Amazon’s declaration of purchasing Whole Foods Market for an estimated value of USD 13.7 billion. In this transformative scenario, where high-end organic supermarket chain could turn into a mass retailer market, the Swiss food giant, Nestle, via this strategic move, is trying to regain its lost position in the American belt.

Nestle has undoubtedly, always been a big name in the global retail market. Of late, however, the company has been facing few challenges in the U.S. ready meal market. Estimates depict that the regional share had fallen from 18% to 17.4% over the past five years (2011-2026). It had also been reported last week that Nestle is about to release its U.S. confectionery business, which generated sales of almost USD 923 million in 2016. Acquiring a portion of Freshly would not only provide Nestle with an access to the growth prospect of the retail market, but it will also bring about reciprocal benefits for Freshly. Nestle, with this strategic alliance will exploit Freshly’s advanced analytics and highly effective distributive network which in turn would strengthen its position in the online retail market.

Headquartered in New York, founded in 2015, Freshly, has a subscription based model that offers consumers diversified meal plans via a rotating menu on their website. The company also has nearly 400 employees. This close partnership with Nestle will enable Freshly to continue its expansion in the market by allowing them to access a broad customer base. Though Nestle hasn't yet disclosed its exact investment amount in Freshly, as per expert analytics, the Swiss firm would help the startup construct a new East Coast kitchen and distribution center in the U.S.

The conventional food business model is observing a paradigm shift, with consumer inclining toward more health-conscious food that is a good fit for their healthy lifestyle. Although most food choices are still made in supermarkets, it is no more a supposition that consumers across the world are depicting a spontaneous acceptance to DTC (direct -to - consumers) options.  It now remains to be seen how Nestle’s investment in Freshly benefits the former in terms of experiencing an effective distributive retail channel.



About Author


Satarupa De

Satarupa De

Satarupa currently works as a content writer at AlgosOnline. An electrical engineer by qualification, she worked for two years in the electrical domain before switching her professional genre. Following her childhood passion, she opted for a career in writing and now ...

Read More

More from Satarupa


Post Recommendents

Nomura Holdings to acquire U.S. M&A firm Greentech in US$92m deal
Author: Pankaj Singh

Nomura Holdings, a financial holding company in Japan, has recently announced that it will buy Greentech Capital Advisors, a mergers and acquisitions advisory company from the U.S. that specializes in renewable energy. This will be the company&rsq...


Perfect Day raises $140 Mn in a Series C funding round led by Temasek
Author: Saipriya Iyer

Perfect Day, a US-based food technology startup that has innovated new processes of creating dairy products by using casein, reportedly announced that it raised $140 million in a Series C funding round. This investment...


Current Health raises $11.5 million in Series A funding round
Author: Pankaj Singh

Current Health, a renowned New York based universal patient management platform, reportedly announced that it has closed a $11.5 million Series A funding round which was co-led by UK based MMC Ventures.