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Freshly Goes Stale: Nestlé-Acquired Meal Delivery Service Ceases Operations



Freshly Goes Stale: Nestlé-Acquired Meal Delivery Service Ceases Operations

Freshly products
At one point, Freshly was shipping over one million meals each week. The meal delivery company now says its final shipping date is January 21

Freshly, a direct-to-consumer meal delivery business, has announced it’s closing its operations for good.

The company, acquired by Nestlé in 2020, confirmed the news on its website. 

“It is with a heavy heart that we announce the Freshly meal delivery service will be ceasing operations. This is a difficult time as we say goodbye to our incredible community,” the company posted on its site.

The New York-based Freshly meal delivery subscription service offered balanced, ready-to-eat meals in three minutes, with a menu focused on limiting sugar and processed ingredients.

A WARN notice from the New York State Department of Labor Office of Dislocated Workers Program, dated 12/5/2022, detailed a plant closure affecting 138 employees. Employee layoffs are expected to take effect from March 9 to March 31. According to the WARN notice, the plant is closing due to “a strategic shift in business strategy following a change in control.”

Last month, it was also reported that the prepared meal delivery service would lay off 329 employees at its Phoenix warehouse. 

According to a Freshly community page on Reddit, many customers of the meal kit company reported concerns over the last year. Freshly customers shared experiences regarding delivery issues, sudden price increases, reports of an “iffy taste,” meal reheating issues, and cancellation problems.

“Twice in the last month I simply had no package arrive with no explanation. The second time they didn’t even offer any discount as an apology. I can deal with deliveries being late, but I can’t deal with surprise no-shows. Is their business failing?” one poster wondered.

The Freshly brand, founded in 2012 by Michael Wystrach and Carter Comstock, partnered with Feeding America, with the company donating extra ingredients and meals to local food banks.

In 2016, Freshly had a $7 million Series A round and later raised $21 million in a funding round by Insight Venture. By 2017, Nestlé led a $77 million funding round and, in 2020, announced it acquired Freshly for $1.5 billion.

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Freshly food in fridge

At one point, Freshly was shipping over one million meals each week due to the pandemic. The meal delivery company’s popularity soared with consumers stuck at home, avoiding food shopping and restaurants, and eager to stay healthy. Freshly announced it would launch operations in California to meet increasing demand.

Much like Peloton and other at-home fitness brands, Freshly appears to have taken a hit as circumstances have changed.

In an investor seminar last November, Nestlé CEO Mark Schneider addressed concerns with Freshly, noting that it was a transaction that did not fully meet Nestlé’s objectives. Schneider went on to explain that Freshly was merged with Kettle Cuisine Company. 

“As you know, this business was acquired just about two years ago, in the fall of 2020. We had been a minority owner of this business for three years before, from 2017 through 2020,” Schneider said. “And basically, I think what happened here is the insight that a D2C channel for a business of this type, in the face of rising customer acquisition costs, because of a totally different data landscape; and also with lower customer retention in this COVID waning world, is simply too narrow. And I think this is something that we had to recognize.”

Former Freshly customers who are enrolled in autopay will be removed from the autopay program, and the final shipping date is January 21. Consumers with a gift card but are not current Freshly customers are encouraged to contact the meal delivery company for further information.

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