Former Schwan’s delivery service, Yelloh, shutting down after 72 years as a Minnesota business

Many Minnesotans remember seeing the iconic yellow Schwan’s trucks driving through their neighborhood to deliver ice cream and steaks door-to-door in an era long before Instacart and Amazon.

The memories will live on, but the fleet is retiring.

The Minnesota-born food delivery company with the famed delivery vehicles, now known as Yelloh, will shut its doors in November after 72 years in business, the company announced Monday.

Yelloh has closed delivery depots around the country and laid off hundreds through the past year but said it still faces “insurmountable business challenges” that have forced a closure.

“The current Yelloh team has worked hard against external headwinds such as the nationwide staffing challenges and crushing food supply chain disruption caused by the pandemic,” board member Michael Ziebell said in a statement. “These challenges, combined with changing consumer lifestyles and competitive pressures that have been building for over 20 years, made success very difficult.

The Schwan’s name lives on through its frozen foods after a South Korean company bought that part of the business for $1.8 billion in 2019. But the visible Bloomington-based delivery segment the Schwan family rebranded as Yelloh will become a part of bygone state lore, much like Camp Snoopy.

Part of Yelloh’s ultimate downfall was its association with the past. The company failed to change with consumers’ habits. Much like the milkman gave way to buying gallon jugs in grocery stores, the rise of on-demand home delivery through apps like DoorDash and Shipt rendered the route-based delivery model obsolete.

“Digital shopping has replaced the personal, at-the-door customer interaction that was the hallmark of the company,” Ziebell said.

In Minnesota, 176 employees will lose their jobs beginning Nov. 22 as locations around the state shut down, according to a state filing. Yelloh has about 1,100 employees nationwide.

“It’s with heavy hearts that we made the difficult decision to cease operations of Yelloh,” said CEO Bernardo Santana in a news release. “We are thankful to our many loyal customers and hard-working employees for everything they have done to support us.”

Last year, the company closed 90 delivery centers and laid off 750 people and followed up with more closures and layoffs this spring.

The first Schwan’s delivery took place March 18, 1952, when 23-year-old Marvin Schwan drove 14 gallons of ice cream to families around Marshall in western Minnesota. The company grew across the country in the decades that followed and eventually had its yellow trucks delivering to customers from Seattle to Sarasota.

Since the birth of e-commerce decades ago, however, the company’s limited offerings and relative lack of innovation left it in the shadow of digital competitors.

This story will be updated.