Blue Apron’s food supplier, North Texas-based FreshRealm, filed for bankruptcy this week and is laying off more than 1,000 employees nationwide. The implosion comes after listeria-related recalls hit FreshRealm products last year.
According to WARN filings, FreshRealm, which is the exclusive maker of Blue Apron’s popular meal kits, is laying off 161 employees in Texas as it closes its Lancaster facility, the company’s headquarters since 2024. FreshRealm is also laying off more than 600 employees in New Jersey and more than 200 in California after it announced it would close Indianapolis and Georgia facilities last year, resulting in another more than 200 layoffs.
The layoffs come after a tempestuous year for FreshRealm. In June, the company voluntarily recalled prepackaged fettuccine alfredo products while they were investigated for a potential listeria contamination, which can cause serious bacterial infection and, in the worst case, death. The affected products were sold at Walmart and Kroger, and they were thought to be connected to premade pasta supplier Nate’s Fine Foods. An investigation from the Food Safety and Inspection Service, a division of the U.S. Department of Agriculture, found 17 reported cases of illness, three deaths and one fetal loss connected to the listeria outbreak.
In the wake of the outbreak, Walmart, which accounted for more than 20% of FreshRealm’s revenue, informed FreshRealm it would cease its customer relationship, according to MarketWatch. According to bankruptcy filings, Blue Apron accounts for 75% of FreshRealm’s revenue, and a settlement agreement between the two filed this week would see another supplier take over FreshRealm’s agreement to make Blue Apron’s meal kits.
If the settlement is approved, Misfits Market, whose primary product is a grocery delivery box containing “ugly” but “delicious” organic produce, will takeover Blue Apron production and fulfillment for FreshRealm. FreshRealm will get $42 million in cash considerations from Blue Apron and other monetary obligations.
“We have built a business that serves an important need in the fresh food and meal space, and we remain focused on continuing to serve our customers while supporting our employees, suppliers, and partners through this transition,” said Michael Lippold, founder and CEO, in a release. “Our agreement with Blue Apron, and the actions we are taking, create a clearer path forward for the business. We continue to believe in the long-term potential of the platform following the Blue Apron transition.”