5 facts about the HelloFresh Supply Chain
The HelloFresh supply chain presents an efficient and more environmentally-friendly alternative to traditional food supply chains, and we work hard every day to make improvements as we build this market segment. Our direct-to-consumer approach is a sustainable evolution of the food system and in line with multiple United Nations Sustainable Development Goals.
In the following post, we’d like to showcase five reasons why we believe that meal kit companies like HelloFresh are revolutionizing the way people shop for and cook dinner.
1. A diligent supplier onboarding process
To provide millions of meals to our customers, our innovative supply chain includes more than 1,500 suppliers, many of them domestic. Quality and sustainability are two important criteria when picking partners, and each supplier must undergo a detailed assessment before we add their ingredients to our meal kits. We have a strong preference for best-in-class suppliers who hold certifications for safety and quality. We keep this consistency by using suppliers that make sustainable use of marine resources and land-based ecosystems. In 2019, over 90.1% of the produce we purchased came from suppliers who have Global GAP, Global GAP Equivalent, or GFSI-recognized certification for primary production of fresh produce. 97.5% of our fish (by weight) is ASC, MSC or BAP equivalent compliant.
2. We order exactly what we need, just when we need it
To maximize efficiency and minimize waste, we have developed advanced algorithms that let us predict our customer orders and therefore our own demand for each week. That’s how we make sure that we order the right amount of products from our suppliers - and prevent having to waste unsold stock by estimating demand. This model avoids oversupply, and our growing enterprise enjoys much lower levels of waste than traditional food retailers
Our “weekly dynamic forecasting system” is based on modern machine-learning techniques that continuously improve forecasting accuracy and thus increase our efficiency in terms of sustainability as well as our business efficiency. We also work closely with our suppliers to minimize inefficiencies in their operations, to further avoid food waste before the products arrive in our distribution centers.
3. What we don’t use, we donate
At our facilities, less than 1% of all purchased ingredients do not make it to customers in our food production process. The vast majority of edible, unsold ingredients are donated to local charitable organizations, directly benefiting people who face food insecurity. We closely collaborate with local food banks in all of our markets. These include “Die Tafel” in Germany and “Foodbank Australia” in Australia. In the USA we cooperate with Spoiler Alert to help us find the best hunger relief organizations for surplus food coming out of our distribution centers and to help us track the meals we donate. In 2019 alone, we donated over 2.6 million meals all over the United States.
During the COVID-19 pandemic we stepped up our efforts even more. By May 2020 HelloFresh had donated around EUR 3 million to food banks across the globe. These donations included contributions of food and around EUR 170,000 of cash support.
4. We save energy
Our vertically integrated supply chain is easy to follow: The ingredients are shipped from our suppliers to our production facilities, we produce the meal kits and send the boxes to our customers. This enables us to reduce a lot of transportation emissions by not having to ship our products from one warehouse to another and putting it on display for customers. It also leads us to another example for how our business model is inherently sustainable.
Compared to traditional supermarkets we save a lot of emissions by not having to operate stores and warehouses that need energy, heating and cooling. We are also currently working on transitioning the distribution centers in our markets to green energy. In Australia and the Netherlands for example, we have already installed solar generation systems on the roofs of our production facilities that make them energy self-sufficient.
5. Our meal kits travel as efficiently as possible
In order to travel more efficiently, our meal kits are shipped in batches on delivery routes that are planned for maximum performance and minimum fuel. Each route replaces many individual customer trips to the grocery store. In some of our markets we own our own delivery fleet. This provides us with the possibility to calculate and implement the most efficient routes for delivery and thereby reducing the average driving distance per box. In the Benelux, optimizing our route-planning software reduced the number of kilometers driven each week by 15%. In Amsterdam and some parts of Belgium, we even use electric vehicles that further lower our carbon emissions.
In markets where we use third-party shippers, we often work together to optimize routes. In the US for example, we are currently using leading emissions software tools that estimate our American outbound logistics carbon footprint. We were also admitted to the EPA SmartWay program to help companies measure, benchmark and improve freight transportation efficiency.