UPDATE 1-Nestle buys minority stake in U.S. ready meals group Freshly
(Adds quotes and background)
ZURICH, June 20 (Reuters) - Nestle <NESN.S> said on Tuesday
it has acquired a minority stake in U.S. group Freshly, a
provider of direct-to-consumer freshly prepared meals, its
latest step to improve the health profile of its sprawling
The Swiss food giant said it was lead investor in a $77
million round of new funding for Freshly, helping it gain access
to the $10 billion market for prepared meals in the United
States that it said would grow at "very attractive rates".
Nestle did not disclose its exact investment.
The investment will help Freshly build a new East Coast
kitchen and distribution centre in 2018 as it prepares to expand
its U.S. service nationwide.
Nestle USA's Food Division President Jeff Hamilton would
join Freshly's board of directors.
Nestle said last week it may sell its roughly $900
million-a-year U.S. confectionery business, which includes
Butterfinger and BabyRuth. [nL8N1JC4WV]
Headquartered in New York with operations in Phoenix,
Freshly was founded in 2015 and employs 400.
Nestle USA Chairman and CEO Paul Grimwood said consumers
still bought most food in supermarkets but were increasing
turning to DTC options.
"Acquiring a position in Freshly not only gives us access to
this growth market, but it also brings reciprocal benefits for
both companies. Nestle 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," he said in a statement.
Its Phoenix facility in the western state of Arizona lets
Freshly ship to around 40 percent of consumers. Its new plant in
Maryland should let Freshly serve about 93 percent of the U.S.
population with prepared meals that can be heated in two to
three minutes, Nestle estimated.
"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,"
Freshly CEO Michael Wystrach said.
Freshly's subscription-based model offers various meal plans
to consumers via a rotating menu on its website.
(Reporting by Michael Shields; Editing by Edwina Gibbs and
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Keywords: NESTLE M&A/FRESHLY (UPDATE 1)