Ahold Delhaize USA Announces Three-Year, $480 Million Investment to Transform Supply Chain for Future
Ahold Delhaize USA has announced plans to transform and expand U.S. supply chain operations 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 warehouse assets from C&S Wholesale Grocers and new leases on another two facilities. In addition, Ahold Delhaize USA will 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 an 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 suppliers, and through the integration, further deepen partnerships to enhance service, quality, innovation and efficiencies; and
- Expand Ahold Delhaize USA companies’ 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.
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“Today’s announcement is 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, Ahold Delhaize USA. “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.”
Three-Year Expansion Plans
Today, Ahold Delhaize USA companies’ distribution networks include 15 traditional and ecommerce 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 service select brands in the U.S. Retail Business Services, the services company of Ahold Delhaize USA, will continue to partner with C&S Wholesale Grocers to provide supply chain services as Ahold Delhaize USA 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 to shelf, deepen relationships with vendors and better position our companies’ distribution centers in the communities they serve,” said Chris Lewis, Executive Vice President, 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.”
As part of the expansion, Ahold Delhaize USA will purchase three warehouses from C&S, including two locations in York, Pennsylvania, and one in Chester, New York.
With respect to the two fully-automated frozen facilities, one will serve the Mid-Atlantic market and the other will serve the Northeast. In addition, the company will also pursue two new leases. One lease will be on a newly renovated warehouse in Manchester, Connecticut, and another will include the lease of a C&S facility in Bethlehem, Pennsylvania.
“Part of our strategy is leveraging the best of automation and technology,” added Lewis. “Each facility will also maintain a significant workforce. We recognize the future of work is changing and we’re taking active steps to help our workforce adapt by enabling them to work more efficiently.”
This enhanced distribution network will provide coverage for Ahold Delhaize USA’s local brands from Maine to Georgia.
Considered together, the companies of Ahold Delhaize USA comprise the largest grocery retail group on the East Coast and the fourth largest group in the nation, with nearly 2,000 retail stores and more than 6 million annualized online grocery orders. Additionally, the companies of Ahold Delhaize USA operate some of the most extensive supply chain operations on the East Coast, including more than 1,000 trucks that travel more than 120 million miles annually and deliver 1.1 billion cases to local brands’ stores.
George Eversman Named Dean of the Industry by CDA
George Eversman, Executive Vice President, Retail and Business Development for DOT Foods, was presented on September 10 with the Convenience Distribution Association’s Dean of the Industry award at the Convenience Distribution Business Exchange (CDBX) awards luncheon in Chicago, Illinois.
Eversman grew up just 40 miles from DOT Foods’ headquarters in Sterling, Illinois. After graduating from the University of Iowa in 1991 with a bachelor’s degree in journalism, he headed to Arizona State for his master’s before joining DOT Foods in 1995 as foodservice marketing manager, heading up supplier relationships.
George was promoted to regional sales manager for the southern region two years later, before taking on his current role as executive vice president of business development and retail in 1999. He has been the face of DOT Foods in most retail segments over the last 20 years and has been integral to its success.
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“George has supported CDA and distributors with a high level of input and improving the flow of products and information,” said Corey Cooper, Stephenson Wholesale Co., Durant, Oklahoma. “I know of no one who doesn’t like George. The support he’s given CDA is unparalleled and extreme. He deserves the award due to his dedication; no one works harder than George.
“George has been a prominent figure in the industry and dedicated to CDA in which he is very involved,” said Kimberly Bolin, CDA’s President and Chief Executive Officer. “He epitomizes what the Dean of the Industry award represents.”
Distributor Acquisition Aims to Grow American Market for Dutch Cheeses
By Lorrie Baumann
Dutch dairy giant FrieslandCampina altered the distribution landscape for European cheeses last December with its purchase of both Jana Foods and Best Cheese Corporation USA. The acquisitions were part of a strategy to expand distribution of the dairy cooperative’s portfolio of Dutch cheeses in the American market and to provide a larger market for the milk produced on Dutch dairy farms, so FrieslandCampina is not currently planning to acquire any American cheese producers, said Gert Jan Poort, President of FrieslandCampina Dairy U.S.
FrieslandCampina originated as a local farmers cooperative in the Netherlands, and through several mergers has become the largest dairy cooperative in the world, with more than 18,000 dairy farmers in the Netherlands, Germany and Belgium and an average farm size with less than 200 cows, Poort said. “If it has 200 cows, it’s a big farm,” he said. “We have a fantastic sustainability policy – it’s a normal way of working.”
The FrieslandCampina cows are on pasture at least 120 days a year, Poort said. “Cows have the same habits as humans looking at the weather. When it’s snowing or raining, they want to be in the barn,” he said. “It’s always a very festive event when they go outside in the spring.”
“What we do with our customers from all over the world is to advise them to come to the Netherlands and see the farms, see the creamery,” he added. “They love it, and they want to buy. They love seeing the cows in the meadow, having the transparency and sourcing from the origin that is the most important thing. Buyers of the biggest retailers in the country are demanding this transparency, and we can deliver it.”
Delivering Dutch Cheeses to the American Market
FrieslandCampina acquired Jana Foods after working with Jana as an American importer and marketing partner for more than 20 years, and with the acquisition, the company is planning to build on the strength of its brands, A Dutch Masterpiece and Kroon, and to grow the Gouda segment in the United States. In its acquisition of Best Cheese Corporation, FrieslandCampina assumes American distribution of brands including Parrano, DeWaag, Melkbus and its expansive portfolio of Gouda styles made from cow, goat and sheep milk. “As a part of our transformative strategy, we continue to focus on delivering the best product to serve consumer needs,” said Roel van Neerbos, President of FrieslandCampina Consumer Dairy, in the company’s announcement of the Best Cheese acquisition. “The Americas is a strategic growth market for us. By acquiring Best Cheese and Jana Foods, we will be able to grow our cheese business in the region further.”
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In addition, the company will focus on educating the American market about other Dutch cheeses, including the classic Edam and other Dutch cow milk and goat milk cheeses, Poort said. “We want to expand and educate Americans about the cheeses themselves and also expand the occasions.”
New Products Launching Under Frico Brand
This year, FrieslandCampina is launching new convenient snack cheeses under its Frico brand, including Gouda Snack, packaged in eight 20 gram portions per resealable bag that will retail for $3.99 to $4.99 as well as a line of Cracker Cuts featuring cracker-sized Gouda, Mediterranean Herb and Goat Cheese. The Cracker Cuts will be merchandised in a display-ready case holding eight 7.05-ounce easy-peel and resealable trays. They’ll retail for $4.99 to $5.99. “We are going to make great progress in the snacking segment,” Poort said.
In addition to providing convenient snacking formats for consumers, the Frico brand is considering convenience in the merchandising options it provides to retailers, according to Debbie Seife, Marketing Director at FrieslandCampina. The new Frico Cheese Slices will be offered in easy-peel resealable trays sold in display-ready cases of 12 packages. “It’s a little different from what some of the other groups are doing,” Seife said. “It’s easy to stock and easy for consumers to shop.”
The Frico Cheese Slices line includes Gouda Mild, Edam, Emmental and Goat Cheese. The packages will retail for $3.99 to $4.99.
Frico will also be offering its Goat Cheese in a 5-ounce cup of freshly shaved cheese for consumers to add to salads, soups or flatbreads. The slightly crumbly cheese is made from 100 percent pasteurized goat milk naturally matured for 20 weeks. The cup will retail for $5.99 to $6.99.
The expanded Frico line will also include Cheese Loaves to slice behind the counter in Gouda, Maasdam, Emmental and Goat Cheese. The Gouda and Goat Cheese are both mild and creamy versions of the cheeses, while Maasdam and Emmental are Swiss-style cheeses with a firm bite and nutty flavors.
