Ahold Delhaize USA is due to invest $480 million to transform and expand its supply chain operations on the U.S East coast.
A fully integrated self-distribution model
The aim of the three-year strategy is to shift the company’s U.S supply chain into a fully integrated, self-distribution model. Under the plan, Ahold Delhaize USA will acquire three distribution centres from C&S Wholesale Grocers, in addition to leases on another two facilities. Furthermore, the company is set to team up with a variety of firms to build a couple of fully automated frozen facilities in the Northeast and Mid-Atlantic.
Kevin Holt, Chief Executive Officer, Ahold Delhaize USA and Ahold Delhaize Management Board member, said: “The announcement is another example of how Ahold Delhaize USA is transforming our infrastructure to support the next generation of grocery retail. Through this initiative, we will modernize our supply chain distribution, transportation and procurement through a fully integrated, self-distribution model, that will be managed by our companies directly and locally. This will result in efficiencies and most importantly product availability and freshness for customers of our local brands – now and in the future – whenever, wherever however they choose to shop.”
Boosting its distribution capabilities
As of today, the company’s distribution network encompasses 15 traditional and e-commerce distribution centres, which serve its subsidiaries such as Food Lion, Giant Food, Giant/Martin’s, Hannaford and Stop & Shop, in addition to its online grocery arm Peapod. Thanks to the new plan, Ahold Delhaize USA’s distribution network will expand to 22 facilities by 2023.
In addition, Retail Business Services (RBS), Ahold Delhaize USA’s services arm, will carry on partnering with C&S Wholesale Grocers to provide supply chain services during the three-year transition to self-distribution.
Chris Lewis, executive vice president of supply chain for RBS said: “Moving to a self-managed supply chain will enable Retail Business Services to reduce costs for the local brands it serves, improve speed to shelf, deepen relationships with vendors and better position our companies’ distribution centers in the communities they serve. These changes will enable us to take advantage of financial and strategic value within procurement, logistics and warehousing to provide the freshest product through the most advanced, efficient delivery network in the grocery industry. We will continue to partner with key providers for distribution center management services, including third-party labor services, such as our longstanding partner C&S.”
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