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.
“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.