While Competitors Close or Contract, Meal-Delivery Service Freshly Expands Reach to 28 States
In cities across America, demanding schedules and on-demand services are bringing a variety of dinner options to people’s doorsteps. Americans now spend more on dining out than groceries, but it’s hard to find a place that delivers to suburbs, accommodates dietary or health concerns and doesn’t break the bank -- let alone all of the above.
Freshly, a subscription service that delivers healthy, natural, pre-made meals, has set out to fill the voids in the food-delivery landscape. The service, which ships box-refrigerated meals from a production kitchen in Phoenix, has just announced it is expanding from 10 to 28 states.
The company’s CEO and co-founder, Michael Wystrach, devised the idea for Freshly after two years as an investment banker. He didn’t enjoy cooking, ordered takeout often and frequently skipped meals. As time passed, he found it difficult to stay in shape, despite working out regularly. Then his doctor suggested he try the paleo diet. After 60 days of eating simple, healthy meals, he was in the best shape of his life. So he set out to make these types of meals available for others.
Freshly’s business model differs vastly from other companies who have struggled to stay afloat or expand their reach. Freshly doesn’t charge extra fees for its weekly meal packages, which include six, nine, 12 or 21 meals averaging $11 each. There are no flat membership fees, no delivery charges and no driver tip requests. Everything is included, and subscribers don’t have to commit for consecutive periods of time.
In contrast, Freshly’s competitors are re-evaluating their business models. Last week, Munchery switched to a membership fee structure instead of its previous pay-per-meal model. Freshly has turned a profit every month since it was founded in February 2015, and it closed a Series A financing round of $7 million last July, according to the company. Wystrach attributes Freshly’s continued profitability to its relationship with FedEx and other couriers. The company will have shipped 125,000 meals in April by the end of the month.
Still, Freshly is taking notes from Munchery, Maple and others by highlighting the minds behind the meals. In addition to adding 18 new states this week, the company is announcing the start of its Tastemakers program. Each month, a chef or nutritionist will partner with Freshy to create four new meals, and Freshly will profile them on its website. Zach Jarrett is Freshly’s first featured chef, and Kevin Scott is up next.
“People want to experience all sorts of different food from around the country, and they want to know about the person behind the meal,” Wystrach says. “Chefs are artists, and it’s important to us that we’re representing that meal the way they've intended.”
Freshly’s meals are gluten-free, and Wystrach says paleo customers can find enough options within the menu to fulfill their needs. Eventually, he says he plans to incorporate vegetarian and vegan options, as well as open another production facility in the Northeast to add to the 20,000 cities the company already serves.
“I like to say that we service San Francisco, but also Bakersfield and El Centro, Calif.,” Wystrach says. “We deliver what 1-percenters have, which is a personal chef and nutritionist, in a box, directly to your door.”Here are the states where Freshly delivers (*indicates state added this week):