Dive Brief:

• HelloFresh is leasing two new distribution centers, in Newnan, Georgia, and Irving, Texas, according to a company press release. The additional space will support increased demand in the Southeast and Central Texas, the company said.
• The Texas facility is the company’s largest to date at 375,000 square feet and will allow HelloFresh to expand production and distribution capacity by 30%. It will include office space, cold storage and packing and shipping areas.
• The distribution center in Georgia is the company’s first in the Southeastern region of the U.S. and spans about 210,000 square feet. It will begin operating in the third quarter.

Dive Insight:

With shares of its stock more than doubling this year and second-quarter sales up 122% from last year, HelloFresh’s latest expansion is a reminder that the meal kit industry has gotten an unexpected boost from the effects of the pandemic.

Its recent successes reflect a short timeframe, but HelloFresh sees the new facilities as part of a long-term growth plan focused on expanding to new regions and customer segments, increasing supply chain capacity and adding more menu options to appeal to new and existing customers. 

While HelloFresh hasn’t revealed any major menu updates or new offerings recently, U.S. CEO Uwe Voss noted in a statement that the company will continue to refresh its menu as it looks to serve more customers. Some of those updates will include a wider recipe selection, more convenient choices and additional customization. 

The Irving center is going to operate along with another facility just a few miles away in Grand Prairie, Texas. The meal kit company said having a second distribution center nearby would augment existing production and tap into its supplier relationships in the Dallas-Fort Worth metro area. Meanwhile, the additional space in Georgia will benefit customers with shorter delivery distances as demand in the area continues to increase. 

Both distribution centers will create new jobs, with more than 750 jobs expected in the Newnan facility and up to 1,200 in Irving.

Now a few months into pandemic-driven sales growth, meal kit companies, retailers and even restaurants are making updates to attract new customers and retain existing ones. Sun Basket launched a line of ready-to-heat meals in August, and on the retail side, Giant Eagle added a line of meal kits called Cookery Complete to stores in July.