Freshly, a meal service that is planning a major East Coast expansion, has picked Maryland as its springboard.
The company, which ships prepared-meal packages to subscribers in more than 20 states, said Thursday it would open a facility in Savage this year to serve as its East Coast base for food preparation, cooking, assembly and distribution.
The company plans to hire 500 people to work there by the end of 2018.
"This is a big move for us," said CEO and co-founder Michael Wystrach. "It's a big commitment."
Freshly traces its roots to Arizona in 2013, when Wystrach started a precursor of the company, looking for a way to eat healthfully without having to cook.
"I'm not only the president. I'm the first customer," said Wystrach, 37, who said time in his family's restaurant left him with a distaste for the kitchen. "I literally started Freshly not because I was trying to start a company, but I was trying to solve a problem."
The company, which still has a large kitchen in Phoenix, switched its model in 2015, changing its name, adding subscriptions and moving its headquarters to New York as it contemplated more growth.
Last year, it raised $21 million, led by New York's Insight Venture Partners, to fuel its East Coast expansion.
"It is a tremendous win for the state and for Howard County that the fast-growing startup Freshly is establishing a significant presence in Maryland," Gov. Larry Hogan said Thursday in a statement.
The state is providing the company with a $1 million loan, which will be forgiven if the firm leases its site for at least eight years, invests an anticipated $8 million and employs at least 500 people by the end of 2018.
Howard County is kicking in assistance with permits and $100,000 in workforce training funds.
Freshly enters an industry marked by fierce competition among a growing number of food ventures.
Amazon has expanded into grocery delivery. UberEats and other ventures, such as Baltimore-based OrderUp, are focused on delivering restaurant meals. Companies such as Blue Apron pitch packages of ingredients for customers reluctant to grocery shop or unhappy about buying giant bundles of parsley for a single dish.
Wystrach declined to share subscriber figures. But he said Freshly hopes to set itself apart with its healthful entrees and midrange prices.
Subscriptions start with four meals a week for about $50, with the price per meal decreasing as the number of dishes grows. The meals — entrees such as meatloaf or ancho chicken with quinoa lentil pilaf — are "fresh, never frozen" and come free of ingredients such as processed sugars, according to the company.
The firm ships refrigerated packages via FedEx to a mix of urban and rural customers; the population density of the East Coast made it an appealing target, Wystrach said.
"Right now, the portion of the U.S. we're missing is the East Coast," he said. "We think this is going to be a really massive market for us."
The firm started looking for real estate about eight months ago, working with three brokers and considering spots in several states. The company eventually settled on Maryland in part because of its central location.
"We anticipate being there for a long time, hiring a lot of people," Wystrach said. "It was a decision we took very seriously."
The firm plans to invest $8 million for machinery and equipment in the 171,000-square-foot center, to be located in an industrial area near the intersection of U.S. 1 and Route 32, the Maryland Department of Commerce said.
The company employs about 325 people currently. At full capacity, the Bollman Place distribution center in Howard could support 600 to 800 jobs, Wystrach said.
Freshly will add to a growing cluster of food companies in Howard, including Coastal Sunbelt Produce and J.J. McDonnell, said Larry Twele, CEO of the Howard County Economic Development Authority. He said the firm's hiring plans are ambitious enough to be felt throughout the metro area.
"It won't only be a Howard County impact," he said. "It should have a positive impact throughout the region."