HelloFresh, You Okay?

The meal kit delivery service seems to be going through a rough patch in North America.

Berlin-based meal kit company HelloFresh is closing up shop in the San Francisco Bay Area, laying off more than 600 employees in the process, reports SFGate. Over the past couple years the meal delivery service has hit some snags, and this recent closure seems to indicate the situation is not improving.

How does HelloFresh work?

Although HelloFresh is the largest meal kit provider in the United States, a number of similar companies have arisen over the past decade, each of which offers customers a slightly different experience. For example, companies like Green Chef prioritize organic ingredients in its meal kits, while HomeChef offers a combination of DIY meal kits and premade heat-and-eat meals.

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With HelloFresh, customers choose a meal plan based on their dietary preferences and household needs, with options for couples, families, pescatarians, etc. The delivery frequency is up to you, between two and six boxes per week. Next, you select the recipes you'd like to try that week and a box with pre-portioned ingredients and cooking instructions is shipped to your home. If you're out of town or have a lot of restaurant dining planned in a given week, HelloFresh lets you skip or modify deliveries.

For the person who wants to cook but doesn't want to deal with buying ingredients and measuring the exact quantities, HelloFresh is a good fit. At the height of the pandemic I took advantage of a HelloFresh first-time order promotions and gave it a try. The step-by-step instructions were very clear, and the exact portioning meant that no food went to waste. During a time when many of us were more or less confined to our homes, meal kits delivered at regular intervals made perfect sense.

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HelloFresh has had some problems

Despite its strengths, HelloFresh's business has been troubled. Most recently, the company announced it would be closing operations at the 109,594-square-foot Bay Area warehouse it has leased since 2015. HelloFresh cited the end of the lease and the building's outdated facilites as primary reasons for the closure.

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"Richmond is one of the oldest buildings in the U.S. network and has one of the smallest footprints, an inefficient layout and outdated refrigeration systems," explained the company in a statement (as relayed by SFGate). "Given the outdated state of the facility, HelloFresh will focus its efforts on its newer, more efficient sites and shift the production of EveryPlate to our other distribution centers."

The closure, however, is not just a relocation of operations. In addition to ending the lease, the company is also laying off more than 600 employees. A spokesperson for HelloFresh clarified to SFGate that the closure is not due to poor employee performance and that the company has "a plan in place to ensure everyone is supported through this transition."

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Workers at this location did attempt to unionize after the pandemic led to an uptick in meal kit orders and a strain on working conditions, but ultimately the union vote failed after many employees said they were met with retaliation from the company, MarketWatch reports. In addition to complaints regarding working conditions and the eventual closure of a massive warehouse, the meal delivery service also had to deal with a multi-state E. coli outbreak connected to HelloFresh ground beef earlier this year.

Business Insider reports HelloFresh's shares are down 68% in 2022, which might indicate that times will never be as good for the meal kit business as they were when we were all stuck inside alone. That's a tough market condition to replicate.

 

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