- Meal kit company Marley Spoon is selling its U.S.-based operations assets to fresh meals producer FreshRealm, according to a Jan. 30 announcement.
- The $24 million deal includes three fulfillment and production facilities in California, New Jersey and Texas. It's expected to close this month, Marley Spoon said in an earnings release.
- The sale is part of a seven-year strategic partnership between the two companies, whereby FreshRealm will become Marley Spoon's exclusive manufacturing partner for U.S. operations.
By selling assets, Marley Spoon aims to reduce costs and increase margins after weathering a decline in revenue and order volume in its U.S. segment last year.
"Evolving to an asset-light model allows us to focus our investments while benefiting from the existing scale of FreshRealm's manufacturing infrastructure," Fabian Siegel, Marley Spoon CEO and founder, said in the earnings release.
Once the deal closes, FreshRealm will take over all of Marley Spoon's fulfillment facilities, inventory, manufacturing assets and a large portion of the company's U.S.-based operations employees. FreshRealm will then fulfill all orders for Marley Spoon customers in the country, while Marley Spoon will continue to handle front-end operations like customer service.
"This partnership provides [Marley Spoon] with a scalable, capital efficient, asset-light platform that will support its ongoing growth and consolidation strategy," Marley Spoon said in the earnings release. "It will allow the Company to focus on its creative and market-facing competencies, while enabling future acquisitions and potential launch of additional direct-to-consumer brands."
Fellow meal kit provider Blue Apron sold fulfillment centers to FreshRealm last year to help its efforts to reach profitability, with FreshRealm exclusively providing its production and fulfillment needs for meal kit products. The deal included facilities in Linden, New Jersey, and Richmond, California, plus personnel and equipment.
FreshRealm also has established relationships with Amazon Fresh, Walmart, Kroger and Publix. The company creates 100 million fresh meals annually, according to its website.