Ahold Delhaize USA announces three year investment of $ 480 million to transform the supply chain for the future
QUINCY, Mass. – Ahold Delhaize USA today announced plans to transform and grow the US supply chain over 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 inventories from C&S Wholesale Grocers as well as new leases for two additional facilities. In addition, Ahold Delhaize USA will work with various companies to build two fully automated freezer systems. 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 your sales presence with seven new and acquired warehouses, including two fully automated freezer systems in the Northeast and the Middle Atlantic.
- Strive for optimal locations close to Ahold Delhaize USA’s local brands and their customers for local product expansion, greater product freshness and faster delivery.
- Innovative warehouse design, including remodeling facilities to improve automation and leverage technological advances, such as an integrated transportation management system and end-to-end forecasting and replenishment technology designed to support the omnichannel experience and multi-channel growth;
- Further expand the relationships with suppliers and suppliers and, through the integration, further deepen the partnerships in order to improve service, quality, innovation and efficiency. and
- Expand Ahold Delhaize USA companies’ presence in local markets and reinforce connections with local communities with the anticipated creation of hundreds of local community jobs, including support office positions.
“Today’s announcement is yet another example of how Ahold Delhaize USA is transforming our infrastructure to support the next generation of grocery retail,” said Kevin Holt, chief executive officer of Ahold Delhaize USA. “Through this initiative, we will modernize our distribution, transportation and procurement in the supply chain through a fully integrated self-distribution model that is managed directly and locally by our companies. This will lead to efficiency and, most importantly, product availability and freshness for customers of our local brands – now and in the future – whenever and wherever they want to shop. ”
Three year expansion plans
Today, the Ahold Delhaize USA companies’ distribution networks include 15 traditional and e-commerce distribution centers serving Ahold Delhaize USA’s local brands, including Food Lion, Giant Food, GIANT / MARTIN’S, Hannaford, Peapod and Stop & Shop. The network will expand to 22 facilities by 2023. To date, Ahold Delhaize USA companies have partnered with C&S Wholesale Grocers to serve select brands in the USA. Retail Business Services, the services company of Ahold Delhaize USA, will continue to work with C&S Wholesale Grocers to provide supply chain services in the transition from Ahold Delhaize USA to a fully integrated self-distribution network.
“By moving to a self-managed supply chain, retail business services can lower the cost of the local brands they serve, improve shelf speed, deepen relationships with vendors, and better position our companies’ distribution centers in the communities they serve,” said Chris Lewis , Executive Vice President, Retail Services Supply Chain. “These changes will allow us to leverage the financial and strategic value of sourcing, logistics and storage to deliver the freshest product through the most advanced and efficient delivery network in the food industry. We will continue to work with key distribution center management providers, including third party labor services such as our longstanding partner C&S. “
As part of the expansion, Ahold Delhaize USA will acquire three warehouses from C&S, including two locations in York, Pennsylvania and one in Chester, NY
With regard to the two fully automated freezers, one will serve the mid-Atlantic market and the other the northeast. In addition, the company will sign two new rental agreements. One lease relates to a newly renovated warehouse in Manchester, Connecticut, and another leases to a C&S facility in Bethlehem, Pennsylvania.
“Part of our strategy is to get the most out of automation and technology,” added Lewis. “Each facility will also have a significant workforce. We understand that the future of work is changing and we are taking active steps to help our employees adapt by allowing them to work more efficiently. “
This expanded distribution network will cover Ahold Delhaize USA’s local brands from Maine to Georgia.
Taken together, the Ahold Delhaize USA companies form the largest grocery retail group on the East Coast and the fourth largest group in the country with nearly 2,000 retail stores and more than 6 million annualized online grocery orders. In addition, Ahold Delhaize USA’s companies operate some of the largest supply chain businesses on the East Coast, including more than 1,000 trucks that travel more than 120 million miles annually and deliver 1.1 billion boxes to local branded stores.
About Ahold Delhaize USA
Ahold Delhaize USA, a division of Ahold Delhaize based in Zaandam, is the parent company of Ahold Delhaize’s US companies, including local brands Food Lion, Giant Food, GIANT / MARTIN’S, Hannaford and Stop & Shop, as well as online grocer Peapod , Retail Business Services, a US support services company serving the brands; and Peapod Digital Labs, its e-commerce engine. Taken together, Ahold Delhaize USA’s local brands form the largest food retail group on the East Coast and the fourth largest food retail group in the country. They operate more than 2,000 stores and distribution centers in 23 states and serve millions of customers weekly through a variety of store formats with thousands of groceries and non-food items.