Agriculture & foodtech

In Tight VC Market, FreshRealm Raises $200M For Affordable Grocery Meals

Illustration of wallet filled with greens.

Long ago, most food was prepared using fresh ingredients at home at the expense of convenience. The advent of “TV dinners”—frozen meals with a protein, carb and vegetable—became popular in the 1950s, but forwent freshness.

Michael Lippold, who spent his career in the fresh food market, founded FreshRealm in 2013 to merge freshness and convenience. The startup announced Wednesday it raised $200 million from unnamed investors, bringing total funding to over $300 million, according to the company.

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“Fresh food is something that I think people across the country would benefit from consuming more,” Lippold said. “But the supply chain has a lot of complexity to it because our food essentially is always dying.”

What makes FreshRealm fresh

FreshRealm offers ready-to-cook and ready-to-heat meals as well as meal kits that are sold in grocery stores. Last year it debuted Kitchen Table, a branded line of off-the-shelf meals which will soon be available in Boston-area grocer Market Basket. It has also partnered with grocery stores to create white-label products. The meals have a shelf life between eight and 10 days.

As the pandemic shuttered restaurants and offices, more people got familiar with their stovetops and cooking from their pantry and fridge.

But those consumer habits haven’t changed much. Now that many companies have adopted a hybrid work model, people don’t necessarily need to commute to the office. Spending that time indoors near their kitchens has also allowed them to forgo a pricey morning coffee or lunch.

But the drive to be resourceful that permeated the homes of many people at the start of the pandemic is starting to wane, and some are experiencing “cooking fatigue”.

“People are getting a little bit fatigued of preparing meals,” Nik Modi, a managing director at RBC Capital Markets said on The Food Institute podcast in March. “It doesn’t mean people are not cooking at home, it looks like they’re looking for more convenient ways to cook.”

The fresh and prepared meal industry raised $107.6 million between July 2021 and July 2022, per Crunchbase data. Meal kits, online grocery and direct-to-consumer frozen goods brands continue to dominate the space. From July 2020 to July 2021, the space raised $50.4 million.

FreshRealm has private-label partnerships with grocery store chains (though the company declined to say which), in which they work together to come up with a line of dishes the store sells in its grab-and-go sections, and produces them under the grocer’s name.

From there it sources ingredients, assembles the food at their production facilities and ships them to 10,000 retail locations across the country.

The startup has four production facilities in Georgia, Indiana, New Jersey and Southern California, and will use the funding to expand facilities across the U.S. The goal is to have a production facility 10 hours away from every retailer. FreshRealm will also use funds to expand culinary capabilities and leverage technology to smooth out issues in the supply chain and make it easier to source ingredients and ship its meals to retailers.

“I would really see us less as us having this new great product and taste profile or a new favorite SKU, but it’s really a new way of eating,” Lippold said. “It’s a new part of the grocery store, it’s a new alternative to a really big category.”

Illustration: Dom Guzman

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