Food-delivery startup Wonder Group gets $100 million investment from Nestle

In an interview with CNBC, Lore said working with Nestle will help Wonder scale more quickly.

Nestle, a food and beverage giant, makes ingredients, snacks and frozen meals carried by grocery stores, but also has a large food-service business and sells to clients including college campuses and cruise lines. Some of those companies may also want Wonder’s kitchen equipment, Lore said.

The partnership will start with Nestle making pizza and pasta tailored for Wonder’s kitchen equipment, along with selling the kitchen equipment to clients.

Melissa Henshaw, president of out-of-home for Nestle, said many of Nestle’s clients have struggled to keep up as customers seek convenient meals and bolder flavors, but the businesses lack the employees to make them. In many cases, that’s led to changes that limit sales opportunities and disappoint customers, such as whittled-down room service menus at hotels, limited hours at cafes or food that’s flavorless, soggy or cold.

“With our partnership with Wonder, there’s this opportunity to help operators across multiple out-of-home segments be able to improve their food quality, have consistency, and actually open up some additional revenue streams that have been pretty challenged post-pandemic,” she said.

Wonder began with a very different business model: A fleet of trucks with mobile kitchens that parked and cooked meals outside customers’ homes in the suburbs of New Jersey and New York. It pulled the plug on that approach in January and laid off hundreds of employees in a push to turn a profit quicker.

Instead, the startup pivoted to opening a growing network of brick-and-mortar kitchens where it can make menu items across cuisines that customers would otherwise find at restaurants with large followings or celebrity chefs, such as José Andrés, Bobby Flay and Michael Symon. It has bought rights from a growing number ofthose chefs and restaurants, which allows customers to mix and match — diners could get entrees from four different restaurants for four different family members in a single order.

The company currently has about 1,100 employees.

As of the end of the year, Wonder plans to have 10 locations in the tri-state area of New York, New Jersey and Connecticut. Each of those locations has about a dozen seats where customers can dine in, but the majority of orders are delivered or picked up for at-home dining, Lore said. Next year, it plans to open at least 20 more locations, he said.

With the startup’s new push, Wonder is selling its white-labeled technology and the meal ingredients — specially made and prepared — that goes with it to other businesses. It’s already rolled out the business-to-business offering, called WonderWorks, at 50 locations, including convention centers, theaters and airports.

Ultimately, Lore said he wants Wonder to be a “super app for mealtime” with a variety of tiered options that fit customers’ budgets, dietary preferences and schedules. The choices would include kits from Blue Apron and hot meals from its kitchens.

Wonder competes with a diverse array of players in the food space. They range from delivery companies such as Uber Eats and DoorDash to quick-service restaurants including SweetGreen and Chipotle and even grocers such as Kroger and Amazon-owned Whole Foods, which have expanded prepared food offerings.

Wonder wants to differentiate itself by how it makes that food, so it can prepare a lengthy list of meals and elevate the taste of those menu items, even in a 2,800-square-foot kitchen with little equipment and labor.

“There’s no gas,” Lore said. “There’s no stove. There’s no fire. There’s no hoods. There’s no grease traps. This can go into a shoe store, a yoga studio or LensCrafters. It can go in anywhere. So it allows you to be very, very adaptable with the kitchen.”