Linden, New Jersey. It was their first
time setting up and operating a warehouse all on their own.
For the team of operations managers,
this was an exciting step. The managers
were running a tight-knit group: Many
were in their 20s, had graduated from
elite colleges like Princeton and Northwestern, and were working their first
jobs building a business from scratch. “It
was ungodly amounts of work, but we
were motivated by a vision that we were
going to write the playbook for how you
ship these crazy meal kits,” says one of
After they signed the Linden lease,
the team set up the new operation over
the 2014 Christmas holiday. The next two
months were grueling—installing equipment and assembly lines, and hiring a
new sta;, all while shipping thousands of
meal kits every week.
In March, Griesel and Frenzel arrived from Berlin to tour the
warehouse and assess the team’s progress. “We were happy,
thinking they’re going to be excited—because we’ve done it all so
fast,” says another manager.
But that wasn’t how the Germans responded. Instead, Fren-
zel launched into all the things wrong about the facility, down
to the unswept dust in a corner of the warehouse floor. (Frenzel
declined to comment.) The U.S. ops team was nonplussed. “Any
person could walk in here and find 50 things wrong,” says the
second manager. “There’s a new sta;. We’re growing like crazy.”
Frenzel made it clear he intended to perform a full audit of
their operations. Then he’d make recommendations on how they
could match the e;ciency of the warehouses in Germany. “It was
a takeover in a sense,” says the first manager. “All of a sudden, it
felt like we had a new rule book, and that was the driving force.”
Along with their demanding new types of reports, Frenzel
and Griesel’s blunt style rankled the workers. “Let’s say some-
body unloads a container by hand,” says the second manager.
“That’s a lot of work. And you’d have the Germans standing
there, literally with their arms folded, watching. Then, when
anyone finished, they’d say”—a;ecting a German accent—“;‘Do
another one.’ They treated them like animals.”
Meanwhile, Richter was setting ever higher sales targets.
Over the next few months, the number of orders coming through
Linden doubled. The warehouse perpetually needed more workers, but Richter and Griesel, concerned about costs, refused to
increase hourly pay. Instead, HelloFresh hired sta;ng firms just
to keep the 150 minimum-wage temps it needed on the line every
day. “It was the bottom of the barrel,” one of the warehouse
managers says of the sta;, which included some who had been
incarcerated or had drug problems.
By early June 2015, five of the American ops managers, including the chief operating o;cer, had quit. “It was hard to see the
vision anymore,” the first manager says.
Frenzel stepped in and took over the COO’s duties full time.
He hired a new warehouse manager, a former Navy supply o;cer
who shared his top-down approach.
He also put a recent hire from Berlin,
a former management consultant, in
charge of procurement. Morale plummeted. Order at the facility began
to unravel, creating a sense of lawlessness. “It was a free-for-all,” says one
“People would come to work late
and high, or go into the bathroom and
hide their beer in the ceiling, and drink
in the bathroom,” says the former
employee. In the summer of 2015, sta;
used drugs and drank alcohol in the
open, according to three employees
who witnessed these activities or
found empty bottles and drug paraphernalia on the premises.
The customer service department
developed its own reckless atmosphere.
Post-work drinks at the bar down the
street were frequent. Early in the summer, maintenance sta;
discovered women’s undergarments in the o;ce one morning,
according to one former manager. Then explicit cellphone photos
of a supervisor and an employee engaging in sexual activities in
the o;ce after hours began circulating, according to three former
managers. Richter and Griesel were notified, according to two of
these former managers, and it resulted in the firing of both peo-
ple. (HelloFresh’s response: This is false.)
When a daytime supervisor, Kareem St. Louis, tried to fire an
employee for disciplinary problems, the employee threatened to
damage St. Louis’s car. Worried about his safety, St. Louis called
911. Over the next few months, other managers had their tires
slashed, were followed home, and got threatening texts saying “we
know where you live.” In July, one went to the local police. “After
notifying senior management, they’ve done nothing to help or
change the situation,” the report noted. That spring and summer,
police were called in six times in response to reports of harass-
ment, disputes, and assaults. (At roughly the same time, competitor
Blue Apron was experiencing similar incidents at its Richmond,
California, warehouse, as reported by BuzzFeed in 2016.)
Conditions continued to worsen. After the warehouse’s two
bathrooms were vandalized, management padlocked the doors,
and the warehouse sta; was told to use outdoor Porta-Pottys,
according to a Linden health inspector’s report. This, along with
a report of bedbugs in the o;ce area, led to a complaint to the
local health department, which sent the inspector to the facility.
In August, a health department o;cial met with Frenzel and
Griesel and ordered them to rectify the bathroom situation.
Richter and Griesel shared none of this with their inves-
tors—despite the fact they were in the middle of raising another
round of venture capital at their biggest valuation yet. The
crux of their pitch: the company’s ambitious plans to take over
the U.S. market.
“They sounded unusually confident” about the state of
operations in the U.S., says James Anderson, fund manager of
the Scottish Mortgage Investment Trust at Baillie Gi;ord, who
heard the pitch and eventually led the September 2015 funding
SELLING THE FANTASY
Enlisting ex-contestants from The Bachelor,
like Ashley Iaconetti, to push HelloFresh on
Instagram is one of the less aggressive mar-
keting tactics the startup uses to lure new
customers—and keep them from quitting.