Ahold Delhaize USA has announced plans to transform and expand US supply chain operations during the next three years by investing $480 million, including leases.
The investment supports a strategy to transition the supply chain network into a fully integrated, self-distribution model. The move includes the acquisition of three warehouse assets from C&S Wholesale Grocers and new leases on another two facilities. In addition, Ahold Delhaize USA has planned to partner with various companies to build two fully automated frozen facilities. The initiative will provide the infrastructure needed to support aggressive omnichannel growth plans.
Through the three-year strategy, Ahold Delhaize USA and its companies will:
- Increase distribution presence with seven new and acquired warehouses, including two fully automated frozen facilities in the Northeast and Mid-Atlantic
- Pursue optimal facility locations near the local brands of Ahold Delhaize USA and their customers, enabling local product expansion, increased product freshness and speed of delivery
- Innovate in warehouse design including transforming facilities to enhance automation and leverage technology advancements such as integrated transportation management system and end-to-end forecasting and replenishment technology, designed to support the omnichannel experience and multi-channel growth
- Continue to build upon relationships with vendors and supplies, and through the integration, further deepen partnerships to enhance service, quality, innovation and efficiencies
- Expand Ahold Delhaize USA company presence in local markets and reaffirm local community connections through the expected creation of hundreds of jobs in local communities including positions in support offices
“Today’s announcement is another example of how Ahold Delhaize USA is transforming our infrastructure to support the next generation of grocery retail,” said CEO Kevin Holt. “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 and however they choose to shop.”
Currently, Ahold Delhaize USA company distribution networks include 15 traditional and e-commerce distribution centers, which service the local brands of Ahold Delhaize USA, which include Food Lion, Giant Food, GIANT/MARTIN’s, Hannaford, Peapod and Stop & Shop. The network will grow to 22 facilities by 2023. To date, Ahold Delhaize USA companies have partnered with C&S Wholesale Grocers to provide supply chain services as Ahold transitions to a fully integrated, self-distribution network.
“Moving to a self-managed supply chain will enable Retail Business Services to reduce costs for the local brands it serves, improve speed of shelf, deepen relationships with vendors and better position our companies’ distribution centers in the communities they serve,” said evp Chris Lewis, Supply Chain for Retail Business Services. “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.”