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Freshly
Freshly
Freshly
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Freshly was a New York City-based convenience food delivery company that delivered throughout the contiguous United States.[1] It was acquired by Nestlé in October 2020 and was shut down in January 2023.

Key Information

The company delivered one million meals per week.[2] Meals were able to be heated by microwave or oven without preparation.[3] Freshly also donated excess ingredients and meals to local food banks as a part of its partnership with Feeding America.

History

[edit]

Freshly was founded by Michael Wystrach and Carter Comstock in 2012.[4] Wystrach sought to lose weight after a decline in his health following years working in the financial field. His family operated a restaurant, The Steak Out in Sonoita, Arizona, and he and a family friend, emergency room doctor Frank Comstock, helped prepare nutritious meals for delivery. After word of mouth spread, Frank's son, Carter Comstock, founded the company with Wystrach. Wystrach was influenced by 4-H program initiatives and adopted minimal food waste and sustainability into Freshly's menus.[2][5][6]

In July 2015, the company raised a $7 million Series A round.[7] In July 2016, the company raised $21 million in a funding round led by Insight Partners.[3][8]

In February 2017, the company announced plans to open a meal distribution center in Savage, Maryland and the creation of 500 jobs.[9]

In June 2017, the company raised $77 million in a funding round led by Nestlé.[10][11]

In 2020, Freshly expanded to business-to-business food delivery, including to workers in essential services.[12]

In October 2020, Freshly was acquired by Nestlé for US$950 million plus up to another US$550 million in earn out payments.[13][14]

In December 2020, the company launched a service to cater to active living styles and low-carb, high protein diets.[15]

In February 2021, Freshly announced a new 134,000 square-foot distribution center in Austell, Georgia.[16] In July 2022, the company closed this distribution center.[17]

In August 2022, the company announced a service focused on delivering meals to businesses.[18]

In December 2022, the company closed its distribution center in Savage, Maryland, laying off 454 people.[19]

In January 2023, Freshly ceased operations.[20]

In May 2023, former investors of Freshly sued Nestlé for failing to make earn-out payments.[21]

References

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Freshly

View on Grokipedia
from Grokipedia
Freshly was an American meal delivery company founded in 2012 by Michael Wystrach and Carter Comstock in , specializing in weekly subscriptions of fresh, chef-cooked, single-serve meals designed for quick heating and portion control, with a focus on healthy, gluten-free, and nutritionist-approved options delivered nationwide in the . The company quickly expanded from its origins as a local meal prep service, raising approximately $107 million in funding across multiple rounds and growing to employ around 1,800 people by 2021, with headquarters in . At its peak during the , Freshly delivered more than 1 million meals per week. Its meals emphasized balanced , convenience for busy lifestyles, and dietary accommodations, distinguishing it in the competitive prepared meal sector by avoiding the need for cooking or extensive preparation—meals could be ready in about three minutes. In October 2020, acquired Freshly for $950 million, with potential earnouts up to $550 million based on performance, as part of the food giant's strategy to bolster its presence in the healthy, at-home meal market amid rising demand during the . However, post-pandemic shifts—including declining , a narrow model, high inflation, and consumers returning to dining out—led to challenges, prompting to wind down the service in late 2022. Freshly ceased operations with its final deliveries on January 21, 2023, after which shifted focus by partnering with private equity firm to merge elements of the business into broader foodservice solutions, such as prepared meals for restaurants and institutions. At its peak, the company served millions of meals and pioneered innovations in fresh meal , but its closure highlighted vulnerabilities in the subscription-based delivery model during economic recovery.

History

Founding

Freshly was founded in 2012 by Michael Wystrach and Carter Comstock in . Wystrach, who had previously worked in and experienced weight gain due to an unhealthy lifestyle, became motivated to improve his diet after a scare, leading him to seek convenient yet nutritious meal options that were lacking in the market at the time. Comstock, a college friend, joined as co-founder, sharing the vision to address frustrations with existing food choices that were either overly processed or required extensive preparation. The company's early concept centered on delivering fresh, pre-cooked, single-serve meals designed to be healthy, gluten-free, and simply ready-to-heat, setting it apart from services that demanded cooking and assembly. Initially operating as a personal project from Wystrach's family background in , the duo aimed to provide balanced, chef-prepared meals that prioritized convenience for busy individuals focused on wellness. During its bootstrapping phase, Freshly was self-funded through the founders' savings, credit cards, and personal loans, allowing them to test the model on a small scale in local markets, including deliveries to family and friends. This period involved overcoming logistical hurdles in meal preparation and distribution without external capital, culminating in a formal nationwide launch in 2015 after refining operations through these initial trials.

Growth and funding

Freshly officially launched its nationwide service in January 2015, initially operating from its base in Arizona before relocating its headquarters to New York City later that year to facilitate broader expansion and access to talent in the food tech sector. The move supported rapid scaling, with the company delivering to 28 states by April 2016 and eventually reaching all 48 contiguous U.S. states by 2020. The company's growth was underpinned by substantial venture funding, totaling $223 million across multiple rounds by the time of its acquisition. In July 2015, Freshly secured $7 million in Series A funding led by investors including Highland Capital Partners. This was followed by a $21 million Series B round in July 2016, also led by Highland Capital Partners, which enabled further infrastructure investments. A significant $77 million growth round came in June 2017, backed by Nestlé USA, Insight Venture Partners, and White Star Capital, among others. Key growth milestones included a surge in production capacity, reaching 600,000 meals per week by mid-2019 and exceeding 1 million meals per week by amid rising for convenient, healthy prepared foods. revenue surpassed $430 million in , reflecting strong subscriber growth and operational scale in the competitive meal delivery market. Early efforts emphasized partnerships with and fitness platforms to target wellness-oriented consumers, aligning with its focus on nutritionist-approved meals.

Products and services

Meal offerings

Freshly's menu featured a rotating selection of over 50 weekly options, encompassing a diverse range of entrées centered on proteins such as , , , and vegetarian alternatives, complemented by grains, , and nutrient-dense sides. The service prioritized high-protein meals, with many selections low in carbohydrates, naturally gluten-free, and suitable for keto diets, catering to health-conscious consumers seeking balanced, flavorful dishes without compromising on dietary preferences. The meals were prepared by chefs in centralized kitchens using fresh, high-quality ingredients sourced to ensure optimal taste and nutrition, and were never frozen to preserve texture and flavor. Packaged without artificial preservatives, they maintained a of 3 to 5 days under , thanks to modified atmosphere packaging, and required only 3 minutes in the for heating, making them ideal for quick consumption. Nutritionally, each meal typically ranged from 400 to 500 calories, delivering balanced macronutrients with 30 to 40 grams of protein per serving to support and muscle maintenance, alongside controlled levels and minimal added sugars. Free of refined sugars and artificial additives, the recipes were developed in collaboration with nutritionists and dietitians to align with evidence-based standards for healthy eating. In later years, Freshly expanded its offerings with dedicated lines for special diets, including the 2021 launch of the Purely Plant vegan collection, while also offering additional single-serve proteins and sides.

Subscription and delivery model

Freshly's subscription model centered on weekly deliveries of prepared meals, offering flexible plans for 4, 6, 9, or 12 single-serving portions without requiring long-term commitments. Subscribers could select from these options, with per-meal decreasing as volume increased: $11.99 for 4 meals, $9.99 for 6 meals, $8.99 for 9 meals, and $8.99 for 12 meals, as listed in early 2019. The service allowed easy pausing or cancellation at any time via the online account dashboard, accommodating varying customer needs such as travel or dietary changes. The ordering process occurred entirely online through Freshly's or , where users browsed a rotating and applied filters for dietary preferences, including options for gluten-free, high-protein, low-calorie, or vegetarian meals. Customers finalized selections by for the following week's delivery, with the system automatically defaulting to previous choices if no changes were made to maintain convenience. Meals were packaged in insulated, recyclable boxes containing dry ice to preserve freshness during shipping, ensuring they arrived ready to heat in under three minutes without prior freezing. Delivery logistics relied on partnerships with carriers such as UPS and FedEx for expedited 1- to 2-day ground shipping to all addresses in the contiguous United States, excluding Alaska and Hawaii. The company prioritized sustainability by using recyclable outer boxes and inner containers made from compostable or recyclable materials, reducing waste in the meal delivery process. Customer support was available through multiple channels, including at [email protected] and a toll-free phone line at (844) 373-7459, with options for live assistance to resolve issues promptly. Freshly backed its service with a satisfaction guarantee, providing free meal replacements, credits, or refunds for any delivery problems such as or spoilage, as reported in customer experiences prior to the acquisition.

Acquisition by Nestlé

Deal details

On October 30, 2020, USA announced its acquisition of Freshly, with the transaction signed and closed on the same day. The deal valued Freshly at $950 million upfront, with potential earn-outs of up to $550 million contingent on the company's future performance, bringing the total possible valuation to $1.5 billion. Nestlé's strategic motivations for the acquisition centered on entering the rapidly growing fresh prepared meal delivery market, driven by increasing consumer demand for convenient, healthy food options amid the . The company sought to combine its expertise with Freshly's consumer analytics and nationwide distribution network to accelerate innovation in nutrition-focused products. For Freshly, the deal provided the scale needed to expand national production capabilities and reach more customers, building on Nestlé's prior minority investment in the startup since 2017. Under the terms of the agreement, acquired 100% ownership of Freshly, integrating it into its portfolio of health-oriented brands. Co-founder and CEO Michael Wystrach expressed enthusiasm for the partnership, indicating continued leadership involvement initially to support the transition. Co-founder Carter Comstock, who had been instrumental in Freshly's operations, also participated in the early post-acquisition phase. The acquisition faced no significant antitrust scrutiny and received regulatory approval without delays, aligning with Nestlé's broader strategy to expand in the direct-to-consumer health and wellness segment. This smooth process reflected the complementary nature of the businesses, with Freshly's focus on meal delivery posing minimal competitive overlap with Nestlé's existing operations.

Post-acquisition operations

Following its acquisition by Nestlé in late 2020, Freshly undertook significant integration efforts to enhance its operational infrastructure and product offerings. In early 2021, the company opened its fifth distribution facility in Austell, Georgia, marking its largest dedicated order-assembly site to date and projected to boost overall operations capacity by 40 percent. Later that year, in April, Freshly expanded further by establishing a second distribution center in East Greenwich, New Jersey, spanning 234,000 square feet and designed to handle high-volume meal assembly and fulfillment. These investments, supported by Nestlé's resources, aimed to meet surging demand for fresh-prepared meals amid the ongoing COVID-19 pandemic. Freshly also broadened its menu under Nestlé's ownership, introducing new categories to appeal to diverse dietary preferences. In June 2021, the company launched "Proteins & Sides," a line of eight multi-serve items such as grilled chicken breasts and roasted sweet potatoes, allowing customers to customize larger meals for families or meal prep. By August 2021, Freshly debuted its first fully plant-based collection, "Purely Plant," featuring six vegan options like a rainbow harvest burger and , developed in collaboration with chefs and nutritionists to emphasize nutrient-dense, gluten-free recipes. In terms of and scaling, Freshly experienced rapid growth post-acquisition, expanding its employee base to approximately 2,000 by 2022 to support increased production and distribution needs. This scaling enabled the launch of B2B services through a new , FreshlyWell, in September 2022, which provided corporate wellness programs including on-site meal delivery and remote options for hybrid workforces, targeting employers seeking convenient, healthy . However, as the pandemic-driven demand surge subsided, Freshly encountered operational challenges in , resulting in significant workforce reductions. The company announced layoffs affecting hundreds of employees across multiple locations, including 329 positions at its , warehouse in December. These cuts were part of broader cost-adjustment measures amid shifting market dynamics. Compounding these issues, Freshly closed several facilities, notably its Howard County distribution center in in late 2022, leading to 454 layoffs at that site alone as the company pivoted its . Despite these setbacks, Freshly continued to innovate by enhancing its core fresh-prepared offerings, such as the multi-serve proteins and plant-based lines, to maintain through varied, health-focused options.

Closure

Announcement and timeline

Freshly announced the shutdown of its meal delivery service in late December 2022 through an email to customers and an update on its website, stating that operations would wind down in early 2023. The company accepted final orders through January 17, 2023, with the last shipments occurring on January 21, 2023, after which all activities ceased. The timeline of the closure began earlier in 2022 with initial cost-cutting measures. In July 2022, Freshly closed its distribution center, resulting in permanent layoffs effective September 10, 2022. Facilities were closed progressively thereafter, including the Phoenix warehouse in December 2022, where 329 employees were laid off, and the facility around the same time, affecting 454 workers. These actions were accompanied by WARN Act notices filed for mass layoffs in multiple states, including , , and New York, where 138 employees were impacted starting in December 2022. As part of the wind-down, , Freshly's parent company, initiated transition measures in November 2022 by forming a with , under which Freshly's operations were combined with Kettle Cuisine to focus on and retail channels, with retaining a 41% stake. Customers enrolled in autopay were automatically removed from the program following their final billing, four days prior to the last shipment.

Reasons and aftermath

The closure of Freshly's direct-to-consumer operations in early 2023 was driven by a confluence of external market pressures and internal strategic challenges following its acquisition by . A significant factor was the sharp decline in demand for delivery services after the , as consumers returned to dining out and in-office work, reducing reliance on at-home prepared s. This shift was compounded by rising operational costs, including inflation and disruptions, which eroded profitability in the (DTC) sector already strained by economic uncertainty. Additionally, 's of the contributed to its downfall through overexpansion—such as the rapid buildup of distribution facilities that proved unsustainable—and integration difficulties, including layoffs and the closure of a newly opened center in mid-2022. Intense competition from established players like , which dominates the market, and Factor, a prepared service targeting health-conscious consumers, further squeezed Freshly's in a crowded $6 billion DTC space. In the financial aftermath, Nestlé faced substantial losses on the $950 million acquisition (with potential earnouts up to $550 million), as the company ultimately shuttered the DTC service without realizing those additional payments, leading former Freshly investors, including major shareholders like , to sue Nestlé in 2023 for breaching merger agreement terms related to earnouts. As of September 2025, the lawsuit remains ongoing, with Nestlé seeking . While no formal $1 billion write-down was publicly disclosed, the failed earnouts and operational wind-down represented a near-total of the , highlighting the risks of pandemic-fueled acquisitions. Freshly's founders did not issue public statements expressing personal regret over the sale, but the investor litigation underscored broader disappointment among stakeholders regarding post-acquisition performance. The shutdown had ripple effects across the meal delivery industry, underscoring the vulnerabilities of pure DTC models reliant on perishable goods, such as high costs and fluctuating habits. It accelerated a broader pivot toward hybrid retail-direct strategies, as seen in Nestlé's partial offloading of Freshly's assets to L Catterton in late to focus on shelf-stable retail products, influencing competitors to diversify beyond subscriptions. No major changes to the L Catterton partnership have been reported as of 2025. Key lessons emerged on challenges in the sector, including the need for robust margins amid volatile demand and the difficulties of maintaining supply chains at national scale, prompting industry-wide reevaluations of expansion tactics. Freshly's legacy endures in promoting accessible healthy eating trends, having pioneered chef-prepared, nutrition-focused meals that broke down barriers for busy consumers seeking convenient wellness options. Elements of its portfolio, including recipes and operational technologies, were integrated into Nestlé's broader healthy meal offerings, contributing to the company's retail expansions in prepared foods and reinforcing commitments to balanced initiatives.

References

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