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Efficient, tech-driven supply chain management drives HelloFresh’s success

During the pandemic, consumers shopping habits changed dramatically toward online channels, pressing companies like HelloFresh to rethink their supply chain operations.

“With the shutting of borders and homes and schools, everyone’s coming home and staying home, and we were a lucky recipient of that in some ways,” said Matt Cicinelli, vice president of operations and technology at HelloFresh. “We were set up to be a business of one size, not knowing COVID was coming, and we quickly transitioned into rapid growth.”

Cicinelli’s keynote on Wednesday helped kick off the second day of FreightWaves’ Global Supply Chain Week three-day event. Cicinelli discussed how HelloFresh is upgrading its approach to customer attraction and retention while handling the supply chain challenges that have arisen in a post-COVID world.

Keeping up with demand

HelloFresh was founded as a startup meal kit company in Berlin, Germany, in 2011. Since then, the company has managed to scale into a global food solutions group, operating six different brands from the meal kit and ready-to-eat sectors in 16 countries on three continents.

In 2021, HelloFresh delivered 1 billion meals and currently has about 7.5 million active users. The company employs 20,000 globally.

“When we look back at 2021, year over year compared to 2020, we grew 53% in the U.S. in terms of box count,” Cicinelli said. “We invested a lot in 2021. We had to keep up and fulfill those needs, while reacting to what was unknown at the time, such as how the disease was spreading, social distancing pressures, which ultimately reduced everyone’s capacity.”

The pandemic helped HelloFresh expand its customer base, which the company is now focused on retaining moving through 2023 and beyond.

The pandemic disrupted supply chains around the world, compelling companies like HelloFresh to expand their transportation and fulfillment networks. One of the challenges for the company during the pandemic was sourcing the ingredients and foods that go into the meal kits.

“If you look back into Q4 of 2020, transportation capacity was definitely a challenge for everyone, the labor market was a challenge for everyone,” Cicinelli said. “At HelloFresh, it was compounded by the consistent challenge we have, a constantly rotating origin of a lot of our suppliers. When you’re trying to chase a product that’s moving from its origin in a capacity constrained area, it’s obviously a big challenge for us.”

Delivering what consumers want

HelloFresh was able to grow during the pandemic by reconfiguring its supply chain through technology and hard work, according to Cicinelli.

“We were talking earlier about the size of business we are equipped to be when the pandemic hit,” he said. “We are very fortunate to be a bigger business than we planned to be at that point in time. But it was powered by people, and we’ve been trying to now supplement those people with tools and technology so that we can stop doing so much on one spreadsheet, then they can invest those people into the product development that’s going to lead to the retention and the growth of our products that we want to see.”

On the commercial transportation side, Cicinelli said HelloFresh went through a massive expansion of its partnerships with carriers during the pandemic.

“In 2022, it’s been a reconciliation of that and investing in partners who are going to be there for you,” he said. “At this point, the pendulum of price is swinging, and so price and quality are table stakes. What we’re really looking for now are the suppliers and the partners who are there when we need them. And we’re very lucky to have some of those.”

Click for more FreightWaves articles by Noi Mahoney.

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