With Nestlé In Its Corner, Freshly Launches Food Service Subsidiary

Two years after being acquired by Nestlé, prepared meal delivery company Freshly is expanding its food service business with FreshlyWell, a new B2B sales platform.

Freshly, which began as a direct-to-consumer heat-and-eat meal company in 2012, said it is aiming to offer more robust B2B offerings, including vending machine-like fridges, minimarkets and larger meal programs for facilities including hospitals, cafeterias and senior living facilities as it looks to meet consumers outside the home.

Freshly made its initial steps into the foodservice channel in 2020 with a B2B program that allows companies to purchase meals for their employees. Later that year, in October, Nestlé acquired Freshly for $950 million with the opportunity for an additional $550 million in potential earnouts. Despite launching its B2B operation at the height of the pandemic, the company said it has gained traction and has now launched FreshlyWell to expand its offerings for business clients.

“Our B2B focus has been years in the making,” Tom Futch, VP of FreshlyWell, told NOSH via email. “This launch serves as a turning point for our business as we look to diversify our channels and expand our reach.”

Last month, the company revealed the new name for the division, a brand style guide, and an overarching mission statement to offer holistic wellness & nourishment beyond the home. This week the meal provider detailed exactly what services it will offer. Going forward, employers can continue to ship meals to their staff, but also can bring Freshly in-house with Freshly mini-fridges or mini-markets; utilize Freshly as a catering service; or place bulk orders for meal programs at university, health care and workplace cafeterias.

“We realized we could accomplish something much greater… by diversifying the channels through which we deliver our meals,” Futch said. “FreshlyWell is the result of our B2B team’s dedication over the last couple of years to design and bring to life more holistic mealtime solutions that serve the needs of not only employers, but of organizations and member communities across a range of industries.”

The program has already launched in a pilot phase with Northwell Health, with Futch reporting “a 70% employee engagement rate” at New York’s largest healthcare provider.

FreshlyWell is utilizing Byte Technology for its fridges, a smart fridge back-end software and appliances provider. Byte Technology sold its own B2B food distribution business to Garten (then Oh My Green) in January 2020, focusing instead on the technical aspects of the business.

Facilities that install a FreshlyWell fridge will lease the units for a monthly fee, order products as needed and maintain inventory levels in the units. This differs from meal solution service Urban Remedy, which not only has its own staff stock refrigerators but also utilizes a “commission” system where the company is only paid for goods sold.

The FreshlyWell offering comes as employers are struggling with two major issues related to food service.

First, many corporations are struggling to maintain staffing levels – decreasing demand and order sizes. FreshlyWell aims to work around this issue by offering businesses an easy way of continuing to offer meals while allowing them to cut cafeteria labor costs.

Meanwhile, for many offices, a simple, subsidized lunch is becoming a necessary perk to bring back employees after two years of remote work. According to research by EZCater, cited in the Boston Globe, office catering orders in Boston were up 58% in February.

FreshlyWell will now compete with other high-tech catering services like EZCater or DoorDash. FreshlyWell does have the backing – and experience – of its parent company, Nestlé, which Futch says works with out-of-home channel segments like offices, clubs, hotels, cruise ships, airports, military bases, hospitality venues and more.

“With Nestlé, we have access to unprecedented resources, research and development, and years of experience that we’re able to tap into to help catapult our growth in the B2B space,” he said. “We’re able to leverage strategies and processes that have proven successful for Nestlé’s similarly structured businesses.”