In the midst of a $480 million move to convert to a fully self-distributing retailer, Ahold Delhaize USA announced that five more warehouse facilities would flip to company control in 2022, including distribution centers in York, Pa., Bethlehem, Pa., and Chester, N.Y., and two automated frozen food facilities in Mountville, Pa., and Plainville, Conn.
The conversions will bring the total number of network facilities under the ADUSA Supply Chain network to 25, up from 17 at the outset of the three-year transformation. By then, about 85% of the company’s U.S. supply chain will be self-distributing and the largest grocery distribution chain on the East Coast.
Ahold Delhaize announced the supply chain initiative in late 2019. It primarily involves taking over procurement, distribution and transportation to legacy Ahold USA brands (Stop & Shop, Giant Food and the Giant Co.) that was previously outsourced to C&S Wholesale Grocers, as well as building new facilities and leveraging technologies that will unite and integrate the supply chain serving all of the Dutch company’s U.S. brands (legacy Delhaize brands Hannaford and Food Lion were already self-distributed when those companies merged in 2016). The move will provide infrastructure to support companywide omnichannel growth plans, increase local product availability, and improve speed to shelf and quality, officials said.
So far in 2021, the ADUSA Supply Chain network has converted procurement services for two facilities in Freetown, Mass., into the self-managed network and will round out the year by opening new distribution centers in Mauldin, S.C., and Manchester, Conn. ADUSA Supply Chain will also convert procurement services at facilities in Jessup, Md., and Carlisle, Pa.
The Mountville and Plainville frozen food sites will open in partnership with Americold, a real estate investment trust focused on cold-storage facilities.
“This is one of the largest supply chain transformations ever undertaken in our industry,” said Chris Lewis, president of ADUSA Supply Chain. “Because of the commitment of our teams and a strong ecosystem of partners, we are on track to create not only one of the biggest supply chains on the East Coast, but the most efficient and effective.”
In addition to bringing a number of distribution centers online in the self-distributed network, the transformation includes the deployment of innovative, artificial intelligence-enabled forecasting and replenishment technology, an integrated transportation management system and an integrated workforce management system, among other technology to enhance the efficiency and effectiveness of the network, officials said.
“We look forward to continuing to work with our partners in other Ahold Delhaize USA companies, the supplier community, our technology and operations providers and more to continue to the transformation and optimize the network for the future,” said Lewis.