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HOW A FORMER MARKETING EXECUTIVE BUILT A $1.1 BILLION BRAND AROUND FROZEN FRUITS
AND VEGETABLES

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LATEST NEWS & INSIGHTS

07 Sep 2022


HOW A FORMER MARKETING EXECUTIVE BUILT A $1.1 BILLION BRAND AROUND FROZEN FRUITS
AND VEGETABLES



It all started with wanting convenient, healthy snacks. Rachel Drori went from
making smoothies for herself (and freezing them for later) and her friends and
family to launching plant-based frozen meal delivery service Daily Harvest in
2015. Turns out that plenty of others want the same. According to the company,
which charges $90 a week for a subscription, revenues reached $250 million in
2020.

 

Investors, too, took notice. Altogether 24 have bet on Drori—including
basketball players Carmelo Anthony (L.A. Lakers), Blake Griffin (Brooklyn Nets)
and Kemba Walker (N.Y. Knicks), NFL star Jared Goff (Detroit Lions), tennis icon
Serena Williams, actress Gwyneth Paltrow and chef Bobby Flay. In November,
Lightspeed Venture Partners and billionaire Stephen Mandel’s Lone Pine Capital
led a $100 million series D round, valuing Daily Harvest at $1.1 billion.

 

That was enough to land Drori, now 39, a spot on Forbes’ eighth annual ranking
of America’s Richest Self-Made Women with a net worth of $350 million, thanks to
her estimated 35% stake in Daily Harvest. Drori would not comment on her net
worth, but did comment on her mission.

 

“I created Daily Harvest to reimagine how food can nourish both humanity and the
planet. We make it easy to eat more sustainably sourced fruits and vegetables
and the bigger we grow, the more good we can do,” Drori told Forbes. “We are
laying the foundation for a better future.”

 

Key to that strategy has been working with farmers directly. Daily Harvest
farmers—there are 400 from California to New York—freeze their produce on-site
to preserve the crops within 24 hours of being picked. (Many fruit farms pick
their crops weeks before they ripen, gassing them in warehouses to complete the
process.) Once frozen, the ingredients are sent to Daily Harvest facilities to
get mixed up and packaged into pre-made recipes that are turned into a meal by
adding milk and blending, or tossing into the microwave, skillet or oven. Daily
Harvest also helps some farmers transition to organic, a process that can take
up to three years, by providing some financial support up front.

 

“When you think about what you can achieve with having something that isn’t
going to rot in three days, the opportunities are huge,” CEO Rachel Drori
told Forbes in 2019.

 

“I have no interest in the freezer aisle. It's broken. We have totally turned
that on its head.”

Born and raised in New York City, the youngest daughter of five born to two
entrepreneurs, Drori says she has always been focused on capital efficiency. On
her first day at Columbia University Business School, the dean asked her
incoming class to articulate the purpose of business. “To make money,” Drori
responded honestly, diverging from others’ more politically correct answers like
“doing good” or “solving needs.”

 

Then, as a marketing executive at shopping and lifestyle website Gilt Groupe,
Drori often found herself hungry at work, yet with too little time to eat a
healthy lunch. Her solution was to whip up smoothies and then freeze them so
they would keep.

 

At first she just made them for family and friends. Before too long, the newly
pregnant then 31-year-old was buying ingredients at her nearby Trader Joe’s and
transporting them to a commercial kitchen in Queens, where she spent her
weekends making smoothies and paid her teenage nephews $20 a night to deliver
them into Manhattan. She funded it all with $25,000 of her savings.

 

From the outset she pledged she wouldn’t quit her day job until orders from
strangers outweighed friends and family’s purchases fivefold. It took two
months.

 

Drori started raising money for Daily Harvest in 2016, in between the births of
her two children. Throughout, she was peppered with inappropriate questions
about her ability to commit to running a business with young children to care
for. In spite of that, Drori eventually raised about $50 million across three
funding rounds by 2018. (The company has raised $180 million so far.)

 

Daily Harvest saw exponential growth through the pandemic, when people all over
the world turned to their freezers with newfound appreciation. When the crisis
started in the U.S., Drori began doubling up on inventory and appealed to her
network of farming suppliers to keep fruits and vegetables flowing to Daily
Harvest kitchens.

 

The brand has long since expanded beyond its signature smoothies, adding frozen
grain bowls, flatbreads, protein crumbles and soups, but its edge over other
food subscription competitors has as much to do with the fact that Drori’s
products comes frozen, which means it will keep, even if consumers wait days or
weeks to prepare it. It's also easier to ship than fresh food.

 

With its fresh pile of money, Daily Harvest is investing in several areas,
including on data and technology to help personalize food orders to match
customer’s eating preferences. It is also introducing in-person options, opening
The Tasting Room in Chicago in February, where it tests some of its newest
strategies. Other such shops will likely follow.

 

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