(Bloomberg)—Daily Harvest, a company that specializes in frozen-food products, including ready-to-blend smoothies, is valued at $1.1 billion after its latest round of funding, said founder and Chief Executive Officer Rachel Drori.
The New York-based startup reached so-called unicorn status by raising $77 million in an equity-funding round led by Lone Pine Capital LLC that included participation from Lightspeed Venture Partners, an existing investor, Drori said in an interview. Daily Harvest is No. 1253 in the 2021 Digital Commerce 360 Next 1000
“Lone Pine understands our mission and sees the opportunity to shake up the entire food system,” Drori said. Greenwich, Connecticut-based Lone Pine has backed other consumer-focused companies, including salad chain Sweetgreen, luggage maker Away (No. 471 in the Top 1000) and Torchy’s Tacos, according to PitchBook data.
Daily Harvest, which ships frozen products including soups, latte pods, almond milk, plant-based ice cream and flatbreads directly to consumers, will spend a portion of its fresh funding on new distribution channels, Drori said. In January, the company will open its first brick-and-mortar location in Chicago, which it describes as a “tasting room” experience.
“There was an acceleration in consumers’ willingness to buy food online during the pandemic,” said Drori, who acknowledged that much of the population still hasn’t adopted the habit. “We want to allow our customers to experience Daily Harvest wherever they are.”
Online food sales in the U.S. increased 108.2% in 2020, Digital Commerce 360 estimates as part of its 2021 Online Food Report.
Founded in 2015 and launched the following year, Daily Harvest generated roughly $250 million of revenue last year. The company plans to invest further in its technology platform and expand its menu, which already includes more than 100 items for meals and snacks throughout the day. In January, the startup plans to add a “Harvest Bakes” collection of items that can be baked as an individual meal or side dish for a household, Drori said.
Daily Harvest says most of its ingredients are organic fruits and vegetables, and that its food doesn’t include any refined sugars, stabilizers or artificial additives. Freezing certain items on the same day they’re harvested leads to a higher retention of antioxidants, vitamin C and beta carotene than refrigerated options, according to the company’s website.
“The bigger we get, the more good we can do,” said Drori, adding that the company is focused on so-called regenerative agriculture, intended to reverse climate change through sustainable farming practices.
Because most of Daily Harvest’s produce comes from within the U.S., the startup hasn’t endured the supply-chain challenges impacting some of its larger rivals, Drori said, and it can innovate and tweak items faster than large conglomerates based on feedback. As an example, the company’s “Scoops” product was the result of customers balking at having to blend ingredients to make ice cream, preferring a ready-made option instead.
Daily Harvest was last valued at $380 million, according to data from PitchBook. Its earlier backers include Serena Williams’s Serena Ventures, Gwyneth Paltrow, Bobby Flay, 3L, VMG Partners and Suttona Capital.
Last month, the company added Mary Dillon, executive chair of Ulta Beauty Inc. (No. 45), to its board. A public-markets debut is a “viable option” for Daily Harvest, Drori said, without commenting on potential timing.
30% ecommerce growth in AMEA for Mondelez
Mondelez International Inc., which rode the pandemic snacking boom to boost online sales of cookies and candy, says the retail trend will continue to grow even after mobility restrictions are lifted as people have become accustomed to using their digital devices to shop for food.
Consumers who were stuck at home became more savvy at using e-commerce channels to satisfy their snack cravings, which were a source of comfort as well as a “lifeline during the pandemic,” said Maurizio Brusadelli, executive vice president and president of Asia Pacific, Middle East and Africa.
Ecommerce sales for goods made by Mondelez—which produces Oreo cookies, Ritz crackers and Cadbury chocolate—jumped by about 30% so far this year in Asia, the Middle East and Africa, and even more in some places, he said in an interview. In China, ecommerce comprised 20% of total sales, helped by partnerships including with TikTok and Alibaba Group Holding Ltd., which gave consumers wider online access to its products.
Growth in digital sales is expected to continue at these levels even as the pandemic wanes, as customers have shifted toward at-home consumption, he said. In China, consumers are using ecommerce platforms to shop for biscuits and gum, Indian consumers sought out chocolate and Australians opted for healthier, low-sugar snacks, both online and in stores.
“People were forced to buy online during the pandemic, and then they continued to buy online,” Brusadelli said.
Chocolate sales in Asia, especially India and China, will see strong growth in the coming years as consumers become more affluent and average consumption remains “very low” compared to Europe and North America, Brusadelli said. Demand per capita is around 9 kilograms a year in Europe (20 lbs), compared with just 200 grams in India.
“Asia continues to offer significant potential and opportunity for growth. I see a lot of opportunities for chocolate,” he said. Mondelez has the biggest chocolate market share in India, Malaysia and Australia, company data show.
The snack food giant has an 11% share of the global confectionery market, including chocolate, gum and candy, trailing Mars Inc.’s 13.1%, according to Bloomberg Intelligence analyst Jennifer Bartashus. Its greatest competitive strength is a leading 12% share of the $103 billion global market in sweet biscuits, snack bars and fruit snacks, she said in a report published in March.
Besides tailor-made snacks for Asian tastebuds, such as wasabi-flavored Oreos in China and pandan coconut chocolate in Malaysia, Mondelez is looking to roll out healthier snacking options to meet rising consumer demand, Brusadelli said. The company has already introduced snacks that are portion-controlled, low in calories, sugar-free or vegan.
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