Daily Harvest

Daily Harvest is an American company that operates on a direct-to-consumer subscription model for frozen, plant-based food. Headquartered in New York City, the company ships pre-portioned meals and snacks, including smoothies, harvest bowls, flatbreads, and soups, to customers across the contiguous United States. Founded in 2015 by Rachel Drori, Daily Harvest experienced rapid growth and achieved a valuation of over one billion dollars by 2021. However, its brand reputation was significantly affected in 2022 by a major product recall linked to hundreds of reports of severe illness.

History

The company was established after founder Rachel Drori, then a marketing executive, identified a personal need for convenient and nutritious meals. She began the business by creating and delivering smoothie packs from her own kitchen before officially launching the business in 2015. Initially focused on ready-to-blend smoothies, the company expanded its product line in 2017 to include soups and subsequently added a wide variety of other plant-based items, such as harvest bowls and flatbreads.

Business model and products

Daily Harvest's business model is centered on a direct-to-consumer subscription service that emphasizes convenience and health. Customers select a plan based on the number of items they wish to receive and build a box from the company's menu. All products are delivered frozen. The company's marketing highlights its use of organic ingredients and its avoidance of gluten, dairy, gums, and artificial additives, stating that over 95% of its ingredients are organic. The products are designed to be prepared quickly, with most requiring only blending or heating.

Funding and growth

The company's expansion has been fueled by significant venture capital investment. In 2017, Daily Harvest raised a $43 million Series B round with backing from Lightspeed Venture Partners, VMG Partners, and celebrity investors including Bobby Flay, Gwyneth Paltrow and Serena Williams. A subsequent Series D funding round in November 2021, led by Lone Pine Capital, raised an additional $77 million. This round brought the company's valuation to $1.1 billion, establishing its status as a "unicorn" in the food-tech industry.

Controversies

2022 French Lentil + Leek Crumbles recall

In June 2022, Daily Harvest faced a significant public health crisis and brand controversy regarding its French Lentil + Leek Crumbles product. Customers began reporting severe gastrointestinal distress and liver dysfunction after consumption, with symptoms including extreme abdominal pain, fever, and, in several dozen cases, requiring gallbladder removal. After receiving over 470 reports of illness and an investigation was opened by the U.S. Food and Drug Administration (FDA), Daily Harvest issued a voluntary recall of the product.

In July 2022, the company announced that its investigation, conducted in partnership with the FDA, had identified tara flour as the likely source of the illnesses. Tara flour, a high-protein ingredient derived from the tara tree, was a new component in the company's supply chain and was sourced from a single producer for use in the crumbles. The incident led to hundreds of lawsuits filed against Daily Harvest by affected consumers seeking damages for medical bills, lost wages, and other hardships. FDA declared tara flour unsafe, two years after the outbreak.

The company's handling of the crisis drew widespread criticism from consumers and in media reports. Daily Harvest's initial communication on June 17 was a direct email to customers who had received the product. Victims and critics described the email's tone as "casual," as it did not use the word "recall" and advised customers to dispose of the lentils out of an "abundance of caution," while offering a $10 credit. Many felt this language failed to convey the seriousness of the reported illnesses. The company also faced backlash for its social media response, where it initially updated old promotional posts for the crumbles with a link to a statement, rather than creating new, prominent warning posts. Critics argued this approach prioritized the brand's "social media aesthetic" over consumer health and safety.