BLOOMINGTON, Minn. & NEW YORK--(BUSINESS WIRE)--4x4 Capital, a New York-based investment platform focused on building value for companies in the consumer, services and industrials sectors, and Yelloh, a pioneer in frozen home food delivery, announced today a partnership aimed at accelerating Yelloh’s transformation and growth.
Frozen food, including store and home delivery sales, is a 70 billion USD industry, expected to grow at approximately 6 percent per year over the next three years1, based in part on growing demand for consumer convenience and value. According to Deloitte, more than 40 percent of consumers say frozen is just as good or better than fresh2. Research from the American Frozen Food Institute found that 30 percent of shoppers increased their freezer capacity since the onset of the pandemic3.
“At Yelloh, we’ve been on a journey to transform and elevate our business into a modern, mobile retailer capable of delivering delicious frozen food and meals no matter where or how our customers want to access our products,” Paul Schwan, chairman of Yelloh said. “As customer demand for frozen continues to surge, we believe that now is the time to make even bolder moves to ensure Yelloh is the category leader we know our business can be. Along with their investment, the 4x4 Capital team brings combined experience of over 100 years at the intersection of route-based and food and beverage platforms. They have an impressive operational track record of exceeding growth and profitability targets, and we are excited to partner with them.”
“We see lots of growth opportunities as consumers increasingly look for quality products and convenience of delivery in the growing home delivery and frozen food markets. We believe in Yelloh’s reinvention ambition and potential, and recognize the unique heritage of over 70 years, built by the Schwan family, of delivering exceptionally delicious food and extraordinary experiences to Yelloh customers and teams. We look forward to building this next chapter together,” said Alex Medicis, co-founder of 4x4 Capital.
Terms of the transaction were not disclosed. Paul Schwan will continue to serve as chairman of Yelloh. Alex Medicis assumes the role of interim CEO while the business embarks on a search for a new chief executive officer to lead the day-to-day aspects of the Minnesota-based business.
Founded in 1952 in rural Minnesota by Marvin Schwan, Yelloh – formerly known as Schwan’s Home Delivery, has pioneered the frozen food delivery industry, driven by the company’s hometown roots and passion for delicious food. The company serves millions of customers across the country, offering frozen foods for every mealtime occasion. In March 2022, Schwan’s Home Delivery announced its transition to Yelloh, paying homage to the company’s unique and iconic fleet of yellow delivery vehicles, as the first in a series of bold steps the company is taking on its journey of reinvention.
4x4 Capital’s Fund II will be fully invested in this and follow-on transactions. With this significant monetary investment, 4x4 Capital is building a second food platform following the very successful investment in the multi-brand 1440 Foods healthy snacking platform.
Vinson & Elkins LLP acted as legal counsel to 4x4 Capital, and William Blair & Company, LLC served as its financial advisor. Faegre Drinker Biddle & Reath LLP acted as legal counsel to Yelloh, and Canaccord Genuity LLC and BDT & Company, LLC served as its financial advisors.
1Nielsen-sourced data (prepared foods, others, and pizza) forecasted for 2021-2026 using industry historic growth rate adjusted for inflation, household growth, population growth, and the Euromonitor aggregated growth rate
2https://www2.deloitte.com/us/en/insights/industry/retail-distribution/future-of-fresh-food-sales/future-of-food-survey.html
3https://affi.org/frozen-heats-up-millennials-affinity-for-frozen-foods/
About 4x4 Capital
4x4 Capital is an investment platform focused on building value for companies in the consumer, services and industrials sectors. We combine deep management expertise and experience in partnering with family-owned businesses with an investment and operational track record across multi-billion-dollar brands worldwide. Our partners’ extensive operational experience and systematic approach to managing businesses and scaling growth drive our long-term view on value creation. Visit 4x4capital.com for more information.
About Yelloh
Yelloh, formerly known as Schwan’s Home Delivery, is a direct-to-consumer frozen food delivery company that provides customers with exceptionally delicious frozen foods for every mealtime occasion, including premium meats, poultry and seafood; a variety of side dishes and appetizers; breakfast items; pizzas; ice cream, desserts and more. Based in Minnesota, the company has about 2,800 dedicated employees and nearly 300 neighborhood delivery hubs nationwide delivering in their iconic yellow trucks to millions of customers each year. For additional information or to shop, visit Schwans.com. To learn more about the transition to Yelloh, visit Yelloh.com.
