At the 3PL & Supply Chain Summit in Brussels, Thomas Stroo, the head of logistics at meal-kit delivery startup HelloFresh, highlighted the company’s success in creating a lean and centralized supply chain that can be micro-controlled from the farmhouse to the consumer’s doorstep.
A German-based company, HelloFresh is the market leader in several countries and delivers over 80 million meals per month. In the Benelux region, HelloFresh runs 600 refrigerated vans to deliver all the boxes.
“We want to change the way people eat because we believe that everyone deserves fresh, delicious and varied meals. We want to make people great chefs, as food brings people together and great food lets us enjoy every bit of life,” said Stroo. “We remove all barriers to eating fresh and high-quality meals at home. People don’t need to worry about what to eat on their way home, don’t need to do grocery shopping, but still can make great meals from scratch themselves.”
The equation of a food supply chain is quite simple – produce from the farm has to make its way to consumers’ tables. But in reality, food logistics can be a labyrinth, as it is comprised of several intermediaries who control the flow of products in the value chain. This causes needless delays, leading to food waste – especially products that have a short shelf life.
With HelloFresh, the supply chain is cyclical as it starts and ends with the customer. The HelloFresh customers go to the app or the website and choose the dishes they want to cook for the week, after which the company moves to source ingredients from its producers. “We source the exact quantity that we need to fulfill our customer’s orders, we put them in boxes, and we deliver it. It’s a faster and fresher supply chain, and there is little to no food waste in the entire supply chain,” said Stroo.
HelloFresh uses connected fleets for its last-mile delivery, which unlike regular e-commerce deliveries, have to be expedited and delivered across precise time windows. Connected fleets provide HelloFresh with full visibility into last-mile movement, which can be relayed to the customers via track-and-trace notifications.
Gathering last-mile data from hundreds of thousands of deliveries has helped HelloFresh fine-tune its routing algorithms to even reflect on the time needed for a delivery stop, based on several parameters like traffic conditions, locality and availability of parking spots. “For instance, if you have a big house where parking is easy, then the driver needs less stop time. But if it’s in the center of Brussels, the driver will need to find parking spots,” said Stroo.
A seamless supply chain also involves taking care of and making the lives of drivers more comfortable. Drivers are provided hand-held devices that they can use to click pictures if something goes wrong – like an accident on the street. The devices and their underlying software were carefully designed for drivers, with the company conducting workshops and forming focus groups to help drivers integrate better with the system.
The in-route visibility helps HelloFresh to check on driving behavior like speeding, idling and even instances when drivers maneuver backwards every time they turn on the engine. The temperature within the refrigerated box is monitored to make sure it sustains a steady temperature of 0-4 degree Celsius (32-39 degrees Fahrenheit) as it is critical to food safety standards.
HelloFresh does intensive research on the delivery time windows it offers, which are set in place based on inputs from its customers. For instance, a 6:00 p.m. slot was introduced recently after HelloFresh understood that a certain percentage of its customer base was hoping to cook dinner on the same day they receive their box. A 6:00 p.m. delivery slot meant that people could receive the meal kit after they get home from work and prepare their dinner on time.
“We want to make sure our capacity and volume management is as lean as possible as it will have an effect on our drivers and our asset utilization. We are focusing on our footprint as well. HelloFresh already has 51 street scooters and electric vans driving in the Benelux, but we aim to have more than 50% of our deliveries to be e-deliveries within the next two years,” said Stroo.