Nestlé has bought a stake in a US-based ready meals company in a bid to capture the fast-growing market.
The food company has made a minority interest purchase in Freshly as the lead investor in a $77-million funding round.
Freshly sells healthy, prepared meals to consumers across the US using a subscription-based model.
Nestlé said the deal would help it gain access to the $10 billion prepared meals market in the US, and it would help Freshly build a new East Coast kitchen and distribution centre in 2018.
The deal follows Nestle's announcement the previous week that it could exit its US confectionery business.
Amazon.com Inc. also said recently it would acquire organic supermarket chain Whole Foods Market in a move that could turn it into a mass-market retailer.
Nestle USA Chairman and CEO Paul Grimwood said consumers still bought most food in supermarkets but were increasingly turning to direct-to-consumer (DTC) options.
"Acquiring a position in Freshly not only gives us access to this growth market, but it also brings reciprocal benefits for both companies," he stated.
"Nestle will gain visibility into Freshly's advanced analytics and its highly effective distribution network, and Freshly will benefit from our R&D, nutrition and sourcing expertise."
Freshly’s most popular meals include Sicilian-Style Chicken Parm with Broccoli, Steak Peppercorn with Sautéed Carrots and Asparagus, and Roasted Turkey with Quinoa Stuffing.
Unlike many other DTC meal companies, Freshly’s subscription-based model offers various meal plans to consumers.
The company’s website highlights a rotating menu that includes many gluten-free, paleo, high protein, low carb or veggie-based meals.
