Marshall-based food company‘s exit signals end of era for Yelloh, formerly Schwan‘s Home Delivery

[MUSIC PLAYING] CATHY WURZER: For 72 years, the iconic yellow truck delivered food to families across the country. Formerly known as Schwan's Home Delivery until 2022, the Minnesota-based company Yelloh will end operations on November 8. Two years ago, the company sold a major chunk of its business and rebranded due to economic and market forces. But they still face challenges.

Last fall, they closed 90 delivery centers and laid off 750 employees. Yelloh is based in southwestern Minnesota, in the city of Marshall. And so we're headed there to learn more. Joining us is professor Jerry Toland, Chair of the Agriculture, Culinology, and Hospitality Management Department at Southwest Minnesota State University. Professor, thank you for joining me.

GERALD TOLAND: It's great to be here. Thank you.

CATHY WURZER: So what was your first reaction when hearing about the closure of Yelloh?

GERALD TOLAND: Well, for Marshall, it's kind of a sad day in the sense that it's been a great part of our community, not just from a business standpoint, but just because the Schwan Food Company and then Yelloh has always given back to the community.

CATHY WURZER: Yeah. And running for 72 years, that's a legacy. With the advent of services like DoorDash and Instacart, how did that impact Yelloh's business?

GERALD TOLAND: Well, tremendous competition, I would think. And then, as noted in some of the stories that have been written about the Yelloh closure, there's just been a complete changeover in consumer habits since the pandemic. And people are online. And just the popularity or the interest in having home delivery has just diminished as, basically, markets have changed.

CATHY WURZER: Yeah. I was really struck by that, because it seems like Yelloh really should have been able to be a key player in that delivery market. They were set up for it. What do you think happened?

GERALD TOLAND: Well, when you look at the design of their program they were working against, and it has already been described already as economic headwinds as far as supply chain, having access to foods at a reasonable price, and also just the matter of finding people that can take on that kind of responsibility.

CATHY WURZER: Yeah. In their press release, there was a quote that digital shopping has replaced the personal, at-the-door customer interaction that was a hallmark of the company. Does that feel like a fair assessment by Yelloh?

GERALD TOLAND: I would say that is a fair assessment. They've really tried to make it work. When they changed their branding in 2022, from the Schwan Delivery to Yelloh, they were making a concerted effort to modernize their whole operation and try to move forward into the new economy. So I think they made a good faith effort to do that.

And not every business can make that model work. I think it's just an evolution of the economy overall, I would argue.

CATHY WURZER: You've lived in Marshall for decades. I'm sure you know people impacted by this. What kind of reactions are you hearing to the news?

GERALD TOLAND: Oh, it's going to be a hit to the community. Even here at the university where I work, Schwan has given back so many things. Like, for example, we have a football field, and it's called the Schwan Regional Event Center, because they've given back to the community so often. We have an ice rink, which is connected with the pizza-- and so I'm just saying they really have made a tremendous impact in Marshall.

CATHY WURZER: That's really good reminder of just how much effect a company can have over the decades.

GERALD TOLAND: Oh, yeah. And different things that they've done over the years-- they had the Red Baron Squadron, which was always a big attraction for people. And so they continue to, through their years, they've just been a vital part of the community, in addition to being an important business.

And one of the reports I'm reading-- it's going to have an impact across the state-- they're going to have to lay off 176 employees across many communities-- Bloomington, Eagan, Maple Grove, Marshall Sauk Center. So it'll kind of be a ripple effect across the state. And the other thing I would say about the Schwan Food Company is that when they've had changes like this, they do make a special effort to try to help their employees that are maybe losing positions to transition to new job openings, and training, and things of that nature.

CATHY WURZER: Have you heard anything about trying to support employees who are seeing the end of this job by November 8?

GERALD TOLAND: I don't know the specifics, but I'm just saying, based upon the history of the company, thinking that they may have some kind of helping hand to help, basically, the people who are losing their positions to maybe find new employment.

CATHY WURZER: This isn't the first big closure in southwest Minnesota in the food industry. Last year, High Life shut down its pork processing plant in Windom, Minnesota, about 70 miles away. Is there something about the food industry that makes it more vulnerable to closures or volatility?

GERALD TOLAND: Well, when you take a look at the food economy, it keeps evolving because of what consumer expectations are. And so it's a fast moving, highly competitive environment. And businesses need to be able to make changes really quickly. Sometimes that's difficult to do.

CATHY WURZER: Yeah. And we often have the expectation that food is cheap.

GERALD TOLAND: Yeah. Well, it depends on how you look at it as far as--

CATHY WURZER: Not cheap to grow, but.

GERALD TOLAND: It depends on how you market it. There's upscale opportunities. And so it's really quite a diverse industry in that sense.

CATHY WURZER: It absolutely is. I know there's so much more we could talk about it, but thank you for taking the time with us today.

GERALD TOLAND: Oh, it's a pleasure.

CATHY WURZER: Professor Jerry Toland is with Southwest Minnesota State University.