Schwan’s Reduces Service Area and Layoffs: Yelloh Struggles in the Competitive Food Delivery Market

Yelloh, formerly known as Schwan’s, is facing a new reduction in service area and layoffs as the company struggles to compete in the food delivery market. This is the second reduction in service area for Yelloh within a year, and it has resulted in the closure of delivery sites across Minnesota and other states.

The company will continue to operate in parts of Minnesota and 15 other states but has decided to reduce its service area further. Yelloh expressed regret over the closures, stating that they do not see a profitable path forward for these depots despite efforts to turn the business around locally. In the previous fall, Yelloh announced layoffs and delivery site closures, reducing services in 18 states.

Founded in 1952 as a rural ice cream delivery service in Minnesota, Schwan’s grew into a nationally recognized company with its iconic yellow trucks. In 2019, the majority of Schwan’s was acquired by South Korea’s CJ CheilJedang for $1.8 billion, leaving the delivery business under the ownership of the Schwan family, rebranded as Yelloh.

The rise of food delivery apps like Instacart and Uber Eats has created a more competitive market for Yelloh. Some customers have expressed dissatisfaction with the company’s offerings since transitioning to Yelloh. Despite these challenges, Yelloh remains committed to supporting its impacted team members and customers during this difficult time by transitioning them to online or app-based ordering solutions.

In summary, Yelloh is facing significant changes as it reduces its service area and lays off employees due to increased competition from food delivery apps like Instacart and Uber Eats. The company was founded over six decades ago as a rural ice cream delivery service but has struggled to adapt to changing consumer preferences and technological advancements in recent years.