Nestle buys U.S. meal delivery group Freshly

FILE PHOTO: The company's logo at a Nestle plant in Konolfingen, Switzerland September 28, 2020. REUTERS/Arnd Wiegmann/File Photo

ZURICH (Reuters) - Food group Nestle on Friday said it had bought U.S. meal delivery company Freshly in a deal valuing it at $950 million, with further potential payments or “earnouts” of up to $550 million.

The purchase marks another deal for Nestle boss Mark Schneider, who has bought and sold around 50 businesses since taking over in 2017.

Under Schneider, the world’s largest packaged food group has been moving into faster-growing areas like premium coffee and pet food and away from slower categories like mass market candy and bottled water.

Freshly is a weekly subscription service delivering cooked meals that can be heated in three minutes. Nestle said Freshly’s 2020 sales were forecast at $430 million and it ships more than one million meals per week.

“Consumers are embracing ecommerce and eating at home like never before. It’s an evolution brought on by the pandemic but taking hold for the long term,” Nestle USA head Steve Presley said in a statement.

Nestle acquired a minority stake in Freshly in 2017, as the lead investor in a $77 million funding round.

Other players in the food delivery market include meal kit companies HelloFresh and Blue Apron Holdings and takeaway food groups Delivery Hero and Just Eat Takeaway.

The Freshly transaction was closed on Friday, the Swiss food group said.

Reporting by Brenna Hughes Neghaiwi; Additional reporting by Martinne Geller in London; Editing by Toby Chopra and Jane Merriman