On October 14, 2022, one of Richmond’s largest employers, HelloFresh, announced it was closing its Richmond facility and laying off over 600 employees. There have been a number of issues with the Richmond location, which is adjacent to and immediately across the railroad tracks from the Castro/Hensley homeless RV camp. HelloFresh has reported vandalism and harassment from camp residents over the past couple of years.
There was a union election that the RPA supported, but unionization was turned down by a vote of the workers.
HelloFresh was also one of the high gross receipts business types targeted by the RPA-sponsored Measure U.
HelloFresh to close massive Richmond facility, lay off over 600 workers
A look at HelloFresh's industrial building in Richmond, which it will not renew the lease on in 2023, a move that will eliminate 611 jobs there.
By Ted Andersen – Digital Editor, San Francisco Business Times
Oct 14, 2022
The world's largest meal-kit company, HelloFresh, revealed in a state filing this week that it plans to close down its more than 100,000-square-foot East Bay warehouse and lay off more than 600 workers there by the end of the year.
Grocery Delivery E-Services USA, Inc. — which does business as HelloFresh — stated in a California WARN notice filing dated Oct. 10 that it will be undergoing a permanent plant closure at its Richmond facility, located at 2041 Factory St., on December 11, which will result in the loss of 611 positions, including 389 production associates.
“The lease for HelloFresh’s production facility in Richmond is expiring at the beginning of 2023 and after an extensive analysis of our production network, HelloFresh has decided not to extend the lease," a company representative said in an emailed statement. "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is one of the oldest buildings in the U.S. network and has one of the smallest footprints, an inefficient layout and outdated refrigeration systems. Given the outdated state of the facility, HelloFresh will focus its efforts on its newer, more efficient sites and shift the production of EveryPlate to our other distribution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."
HelloFresh Inc. leased the entire 109,594-square-foot freezer storage warehouse in Richmond in 2015. The annual asking rent was around $14.40 per square foot and the entire lease was valued at $13 million.
The German company, whose investors include Insight Venture Partners and Rocket Internet SE, saw its fortunes grow during the pandemic after it endured losses in the wake of going public in 2017. But 2022 has been no picnic, and the company has thus far endured a more than 70% dive on the Frankfurt Stock Exchange this year.
The company said it remains focused on profitable growth through strategic investments in infrastructure, technology and high-efficiency operations and that the decision to forego the lease was not a reflection of the local teams’ performance.
Notice of the closure comes after issues at the facillity began bubbling to the surface last November, when workers asked government authorities to investigate alleged "dangerous" working conditions at the company's facilities in both Richmond and in Aurora, Colorado.
Those allegations came ahead of a vote to become the meal-kit industry's first unionized workforce, represented by Unite Here, the country's largest hospitality union. However, HelloFresh workers in both Richmond and Aurora voted against the union.
HelloFresh made record profits during the pandemic, posting a net profit of $446 million for the 2020 fiscal year following a $445 million net loss in 2019 as consumers turned to home cooking while working remotely.
The company was founded in November 2011 by Dominik Richter, Thomas Griesel, and Jessica Nilsson in Berlin.
In November 2017, HelloFresh completed its IPO on the Frankfurt Stock Exchange, valuing it at almost $2 billion. It's now worth about $3.76 billion and has raised $367.5 million in funding, according to Crunchbase. New York-based Blue Apron is its largest U.S.-based competitor.