Now that the Covid pandemic is (hopefully) winding down, Freshly, one of the leading home meal delivery businesses, is winding down also. Nestle is combining its $950 million 2020 acquisition, in which it had high hopes, with Kettle Cuisine in a joint venture led by investment firm L Catterton.
In a Nov. 29 investor day presentation, Nestle also said it’s searching for a home for its peanut allergy treatment Palforzia, the most interesting part of its $2.6 billion acquisition Aimmune Therapeutics.
Nestle CEO Mark Schneider called the two businesses, both costly 2020 acquisitions, “two transactions that did not meet our objectives fully.” He added, “The environment of 2020 fooled us.” While home delivery was hot during the pandemic, Schneider said Freshly now is confronting higher customer acquisition costs, lower customer retention and lower prospects for the business.
Kettle Cuisine, which is owned by Catterton, has been favoring its foodservice business rather than retail, and that’s apparently a model Freshly will follow. Schneider said Kettle and Freshly have in common a focus on freshness, and will direct efforts at foodservice operators who don’t have the labor to offer such fresh meals.
Financial details were not disclosed, but Catterton will own 59% of the business and Nestle 41%.
