Nespress yourself... As America's largest food company, Nestlé makes everything from Hot Pockets to Kit Kats — and anything that begins with "Nes" (presso, tea, quik). Now, Nestlé's expressing its love for all things edible with a meal delivery purchase:
- Nestlé USA is buying Freshly for up to $1.5B. The healthy meal subscription startup sends you buttered salmon and kale to heat up between Zoom calls.
- Freshly ships more than 1M meals per week across 48 states, and expects $430M in sales for 2020. But don't expect any Nesquik boxes...
Say it again... Freshly’s CEO wants to make it veryyy clear that Nestlé won't be a cook in its kitchen: “Our meals will not be changing...there are no plans to change ingredients or integrate Nestlé products into Freshly meals” (burn). Freshly will run as a standalone biz, and pricing won't change.
- What Nestlé gets: A promising company in a fast-growing, pandemic-friendly industry.
- What Freshly gets: $950M, with possibly $550M extra. Freshly can scale faster with Nestlé cash — it's already planning to triple its menu offerings with the fresh $$$.
Big shots can afford to be late... Nestlé was an early investor in Freshly — in 2017 it snatched a 16% stake to "evaluate" the up-and-coming meal delivery market. Now Nestlé has decided it's safe to go all in (you think?). Massive companies can afford to be late to trends because they can buy already-successful companies, skipping the time and risk needed to build from scratch.