The encyclopedia · Strategy & Leadership · Strategic decision · 2012–2023
Nestlé paid $950M for Freshly — then switched off the meal deliveries
Nestlé bought meal-delivery Freshly for about $950M in October 2020; retention collapsed post-pandemic and the last boxes shipped on 21 January 2023.
Freshly · Nestlé · 2023-01
What happened
Freshly, founded in 2012 by Michael Wystrach and Carter Comstock, delivered prepared, ready-to-heat meals — not kits to cook — across the contiguous United States. At its pandemic peak it shipped more than a million meals a week, and in October 2020 Nestlé bought the company for about $950 million, with up to $550 million more in earn-out payments on top.
The habit did not survive the pandemic. As restaurants reopened, customer retention fell, and inflation in 2022 pushed cash-strapped subscribers to cancel. Nestlé chief executive Mark Schneider conceded that a pure direct-to-consumer model was 'too narrow' unless it was truly premium or fully personalized. A November 2022 merger of Freshly with Nestlé's Kettle Cuisine venture failed to stop the slide, and kitchens began closing — including the Savage, Maryland centre, which shut in December 2022 with 454 jobs lost.
In late December 2022 Freshly announced it was ending meal deliveries altogether: last orders were accepted on 17 January 2023 and the final boxes shipped on 21 January. Nestlé kept the merged Kettle Cuisine entity, redirecting Freshly's kitchens toward fresh food for retail and food-service customers. In May 2023 former investors sued Nestlé over the unpaid earn-outs.
Why it happened
- Meal-subscription retention collapsed as pandemic-era customers returned to restaurants and offices.
- Inflation in 2022 made a premium-priced subscription one of the first bills households cut.
- Nestlé judged the pure direct-to-consumer model 'too narrow' — neither truly premium nor fully personalized.
The lesson
Nestlé paid about $950M for Freshly at the top of the meal-delivery boom; two years later the last box shipped. Peak prices assume habits that outlast the boom.
Aftermath
Freshly's kitchens continued producing fresh meals for the Kettle Cuisine joint venture's retail and food-service customers.
Sources
- Wikipedia — Freshly (founded 2012 by Michael Wystrach and Carter Comstock, New York; prepared-meal delivery service across the contiguous U.S.; delivered one million meals per week at peak; acquired by Nestlé October 2020 for US$950 million plus up to US$550 million in earn-outs; ceased operations January 2023; closed the Austell, Georgia centre July 2022 and the Savage, Maryland centre December 2022 laying off 454 people; in May 2023 former investors including Insight Partners sued Nestlé over unpaid earn-out payments)
- Food on Demand, 12 January 2023 — Meal Subscription Service Freshly Shuts Down (cessation announced late December 2022; final orders accepted 17 January 2023, final shipping date 21 January 2023; Nestlé acquired Freshly in 2020 for approximately $950 million; peak of over 1 million meals per week during the pandemic; retention dropped as consumers returned to dining out; inflation cut subscription use; Nestlé CEO Mark Schneider called a pure D2C model 'too narrow'; November merger with Kettle Cuisine unsuccessful; facilities closed in Maryland, Arizona and New York; business continues through the Kettle Cuisine venture serving retail and food service)
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