Over the past year and a half, meal-kit services have understandably seen a huge surge in popularity all over the world. Without the ability to safely dine out, many people were in need of easy, realistic alternatives.
Enter, Freshly. With all the convenience of a food delivery service but the feeling of a home-cooked meal, this (relatively) new kid on the block has taken the US by storm.
Unlike other meal-kit services, Freshly delivers meals that are precooked. Therefore, all customers need to do is heat their meal up in the microwave or oven. Focusing on fresh, healthy ingredients and minimal food waste, Freshly reported sales up 50% year over year in 2020 — a huge feat in such a difficult time.
So, what is Freshly’s secret to success? And who is driving their sales? This brand deep dive will take a look.
Freshly’s Path to Success
Founded in 2012 by Michael Wystrach and Carter Comstock, Freshly has been focused on healthy, sustainable food since the beginning.
A few years before Freshly took off, Wystrach was an investment banker looking to lose weight and improve his overall health. To do so, he and his family opened a restaurant called “The Steak Out” in Arizona.
Working with a family friend and emergency room doctor Frank Comstock, The Steak Out offered tasty, nutritious meals. By 2012, Wystrach had joined forces with Carter Comstock, Frank’s son, and Freshly was born.
With a policy of minimal food waste for all of their menus, Freshly also donates excess meals and leftover ingredients to local food banks as part of its partnership with Feeding America.
Understandably, the new startup generated an impressive $7 million during its Series A funding round — followed by a second $21 million funding round spearheaded by Insight Venture Partners.
By 2017, Freshly had been acquired by Nestlé for $1.5 billion. With the help of their new parent company, they led another $77 million funding round, and by 2018, they’d opened an East Coast kitchen and distribution center.
Throughout the Covid-19 pandemic, Freshly made some very generous (and smart) moves. They donated $500 thousand in prepared foods to Meals on Wheels, an organization that provides free meals to people who are unable to purchase or prepare their own food.
Freshly also expanded its offerings in 2020, launching a B2B food delivery service for hospitals and essential workers and FreshlyFit — which is meant for people living active lifestyles and consuming low-carb, high-protein diets.
Most recently, Freshly opened a new production facility in Austell, Georgia, which will allow them to increase their production and distribution even further.
With the meal kit service market in North America currently worth around $5 billion, Freshly still has plenty of room for growth.
So, who’s currently using Freshly? Which target audiences are receiving their one million meals shipped each week and fueling their growth?
Let’s take a look!
Who’s Using Freshly?
Currently worth $5 billion, the meal-kit industry in the US is booming — there’s no doubt about it.
According to LinchpinSeo, 17% of consumers in the US have subscribed to a meal kit service at one point in their lives. And of those who have subscribed, an astonishing 90% have referred other people to the service.
So, how does Freshly fit into this industry?
Using our advanced brand tracking software, we ran a mobile-optimized brand survey in the US to gather data on Freshly’s brand performance. Based on our results, we found that just 19% of the US general population is aware of Freshly.
If we look at the adult female population, that number jumps to 29%. Of the adult women who are aware of Freshly, 54% would consider using the brand. That’s pretty good!
However, after this, Freshly’s brand funnel begins to falter. Of the adult female audience, only 1% reports current use of the brand. With this data, we can see that Freshly need to spend some time and money focusing on the center of their brand funnel to increase sales.
Another interesting audience for Freshly in terms of brand awareness is adults who eat out. Within this segment, 23% are aware of the brand and, of those aware, 55% would consider using it.
Considering that the pandemic has drastically changed the way we live — maybe ordering food at home is the new eating out? Either way, Freshly would be wise to hone in on this target audience to increase sales in 2021.
Finally, to increase their brand awareness, Freshly could look to meal kit rival Blue Apron for some tips. With 50% brand awareness among adults who eat out and 52% awareness among adult females, Blue Apron is obviously doing something right.
What Can You Learn from Their Strategy?
When competitors have struggled to stay afloat and generate revenue, Freshly has seen a good deal of success. In many ways, this is down to their business model.
As opposed to the competition, Freshly doesn’t charge extra fees for its weekly meal deliveries — which come in packages of either four, six, 10, or 12 meals. The more meals you order, the lower the cost of each individual meal — with 4 meals per week coming in at $11.49 per meal and 12 meals at $8.49 per meal.
Furthermore, Freshly doesn’t require a delivery charge or a flat membership fee. Everything is included and customers don’t have to commit to a certain number of meals weeks in advance. If for any reason they need to skip or cancel a week, Freshly allows customers to make changes to any upcoming deliveries before their weekly deadline.
Alongside healthy offerings and an easy-to-use interface, a high level of flexibility and accommodation are some of Freshly’s main USPs.
So, what can you take away from Freshly’s business model? Listen to your customers.
If one thing’s clear here, Freshly knows their target audience — their wants, needs, likes, and dislikes. They did their research and discovered customers’ pain points with meal-kit services.
What are some of these pain points, you ask?
1. Flexibility: No More Rigid, Unchangeable Subscription Plans
Based on research, 68% of Americans are not interested in meal kits because they don’t want to be tied down. And in a post-covid era, more and more people will want to return to a more spontaneous way of eating.
Keeping this in mind, Freshly allows customers to make changes to upcoming deliveries 5-6 days in advance — which is a better time frame than many of their competitors who require 10 days or more.
Freshly also allows customers to change delivery locations, times, days, and substitute out meals. This degree of flexibility is one of the main reasons why Freshly has been so successful.
2. Transparency: No More Dancing Around Which Ingredients Are Used
These days, most meal kit services are somewhat transparent with their ingredients.
However, Freshly goes a step further and provides customers access to their “Wellness Experts”, who can answer specific questions about meals and help them make selections for upcoming orders.
They also allow customers to choose meals based on their dietary needs, making it easier for more people to use their service.
3. Eco-conscious: No More Packaging that isn’t Recyclable
The ability to recycle and reduce our environmental impact is a societal interest that won’t be fading away any time soon.
Freshly knows this and is very invested in making sure their packaging is as recyclable as possible. From the boxes to the plastic meal containers to the cardboard sleeves — everything is recyclable.
From steep cancelation fees to rigid, unchangeable subscription plans, Freshly knew what to avoid when building its own brand. And because of this, they have been able to grow and expand consistently over the past few years.
While these points may not apply directly to your own brand, the lesson remains consistent: Do your research and listen to your target audience — they’ll tell you what they want.
Although Freshly has already been incredibly successful, our brand tracking research shows that they have a good deal of room to grow.
From increasing their brand awareness levels to improving their usage, Freshly can use such improvements to increase their success and gain more customers.
We’re excited to see how this forward-thinking brand grows and develops over the next few years!