Nestlé invests, partners with food-delivery startup Wonder Group

Dive Brief:

• Nestlé is investing in and partnering with food-delivery startup Wonder Group, a spokesperson confirmed to Food Dive. The food and beverage giant declined to say how much it invested or reveal additional details.
• CNBC said the deal included a $100 million investment from Nestle, along with a strategic partnership. The report said that Nestle will manufacture pizza and pasta for Wonder’s kitchen equipment, in addition to selling the kitchen equipment to customers.
• Nestlé said the agreement further complements its recent decision to combine its two foodservice businesses into one operation so that it can capitalize on the strong recovery in the out-of-home channel.

Dive Insight:

While Nestlé is best known in the U.S. for brands such as Lean Cuisine, DiGiorno and Nescafe found in grocery and convenience stores, the Switzerland-based company also has a large presence in the foodservice space. Nestlé sells products to more than 200,000 out-of-home outlets, according to the company.

Melissa Henshaw, president of out-of-home for Nestlé, told CNBC that many of its clients have struggled to keep up as consumers look for convenient meals and bolder flavors. At the same time, the companies do not have enough employees to make these foods. This often leads to limited room service menus at places like hotels, shorter hours at cafes and, in general, poor-quality foods.

For Nestlé, the partnership with Wonder Group offers a lucrative channel to boost sales and connect with establishments looking for help. With out-of-home consumption increasing, Nestlé now has another opportunity to capture that growth for its brands like Sweet Earth, Carnation and Stouffer’s, among others, rather than losing that business to a competitor or leaving potential sales unfilled.

“This strategic partnership will allow us to bring an innovative and new-to-market solution to our customers as they look for ways to scale their operations,” Nestlé told Food Dive in a statement. “It can help them improve food quality, drive labor efficiencies, and open up additional revenue streams.”

Wonder Group, a food tech company founded by former Walmart e-commerce executive Marc Lore, recently announced it was buying meal-kit company Blue Apron for about $100 million. Once the deal closes, which is expected later this year, Nestlé’s foodservice business could be a beneficiary through its new connection with Wonder Group.