Those iconic pale-yellow icebox delivery trucks, so familiar in suburban neighborhoods, will soon be sporting a new logo. Seventy-year-old Schwan’s Home Delivery has changed its name to Yelloh. The change is expected to be fully implemented by 2023.
The delivery business has changed a lot since Schwan’s was founded as a cold-storage truck selling ice cream in the 1950s. Why change name and identity? That is not completely clear, but a more modern look and evolving customer preferences are likely the reason.
“Our brand change is one of the ways we are continuing to reinvent ourselves,” said Jennifer Rock, director of communications and public relations for Schwan’s Company.
“Yelloh” is a midwestern, neighborly colloquialism for “hello,” fitting for a home delivery business hailing from the rural Midwest, where many families may recognize their consistent Schwan delivery driver and share that familiar salutation. The pervasive, friendly branding pays tribute to its legacy but is also aimed at welcoming new customers. In a further nod to the casual greeting, the brand is also sometimes seen presented as “Yelloh!”
Paul Schwan, executive chairman of Yelloh, also explained, “We thought it was a great name to recognize our heritage, the yellow trucks that we’ve been operating for so many years.”
Seemingly unafraid of change, on March 18, Schwann announced the name change to “Yelloh,” a rare move for such a long-standing brand. Having evolved and stepped away from being a completely family-owned and -operated food delivery business, its brand change strategically reflects that update, yet counters the cold, impersonal feel of such a transaction.
Acquisition fuels growth
Started as a small, family business selling ice cream from a beat-up Dodge panel van in the current headquarters of Marshall, Minnesota, the Schwan family company has since grown and expanded to delivering a variety of frozen foods and treats across the 48 states. It now boasts a fleet of over 3,000 soft-yellow trucks and a complement of almost 4,000 employees.
The Schwan family company has thrived because of business-savvy decisions over the years. The company acquired long-lasting brands such as Red Baron, Tony’s and Freschetta pizza and Mrs. Smith’s and Edward’s desserts, as well as many other notable names. Schwan’s even teamed up in 2010 with the TV series Top Chef and showed the brand’s commitment to relevancy, keeping them in the spotlight as a trusted family name.
Surprisingly, in 2018, the family sold 80% of its company’s stock to South Korean enterprise CJ CheilJedang (CJCJ) for $1.8 billion. Under the terms of the deal, the Schwan’s family maintained 100% independent operation of its home delivery service.
“By combining our operational capabilities with CJCJ, we are creating a much stronger business that will benefit everyone who has a stake in our success,” Schwan’s CEO Demitrios Smyrnios said.
The name change and partnership with CJCJ show the evolving nature of the business. It’s uncommon to find a 70-year-old brand in the quickly changing world of food delivery. The change to a more modern look is a way to keep the brand relevant. In the U.S., the food delivery market has boomed since the Covid-19 pandemic, and even before then, which is a far cry from the traditional pizza and Chinese options that were Schwan’s customers’ only choices in years past.
Technology is now the theme
Grocery consumers can order practically anything with a smartphone and get the items delivered within minutes. That’s a stark contrast to a weekly delivery from a Schwan’s truck.
The name change fits into an overall branding strategy, said Sunil Gupta, the Edward W. Carter Professor of Business Administration at Harvard University.
“If a brand wants to create a conversation with you, the message of the brand has to be broader than just the function of the product itself,” he said.
Unlike the previous family-name branding, “Yelloh” does just what Gupta advises: It goes broader, leaving room for even more growth and change.
Having healthier, fresher food delivered right to a customer’s door, for low cost and with the ease of an app, is the big trend in food delivery. The $15 billion global meal kit delivery services market is projected to grow 17.4% from 2022 to 2030. Grand View Research explains that “increasing preference for home-cooked and chef-cooked food among millennials is a major factor contributing to the growth of the market” and that “the delivery service has been gaining high popularity and adoption among generation Y and Z” for health but also economical reasons.
“We’re working on more options for our current and new customers to connect with us, including more delivery options, new digital innovations and increased flexibility,” Rock said.
Without knowing Yelloh’s plans, looking at the current food delivery market, there is room for speculation. According to the American Frozen Food Institute (AFFI), older millennials, who make up 48% of the core consumer audience, are more conscious about nutrition and quality than previous generations, “seeking a more diverse culinary selection of products made with fewer and more premium ingredients.” Couple that with McKinsey’s 2020 report that, in the last decade, most growth in the food and beverage industry has come from small brands, and a wide array of convenient, less expensive, healthier food options could be on the horizon, with Yelloh bringing it right to our doorstep.