Ahold Delhaize USA (ADUSA) has chosen a new frozen food partner that will work with the big merchant to supply frozen foods to the company when it completes its transition into a full integrated self-distribution retailer by 2023. Americold, the Atlanta-based temperature-controlled warehousing and logistics firm, has been selected to work with Northeast’s largest retailer. The decision to shift to a self-distribution model was first announced by ADUSA in December 2019.
As part of that announcement, the company said it would invest in a partnership to build the two fully automated frozen warehouses which will expand cold storage space by 500,000 square feet (24 million cubic feet). The new frozen depots will be located in Plainville, CT (about 20 miles from Hartford), which will serve Ahold Delhaize USA’s Northeast brands (divisions); and in Mountville, PA (about 15 miles from Lancaster), which will serve Ahold Delhaize USA’s Mid-Atlantic brands.
“We’re extremely proud of this new partnership with Americold and the opportunity to fully expand our cold-storage capacity as part of our current storage needs and future growth plans,” said Chris Lewis, executive VP- supply chain for Retail Business Services, the services company for Ahold Delhaize USA. “Americold is a leading expert in this space, and we’re confident in their abilities to build state-of-the-art facilities that will meet our needs and serve our omnichannel growth strategy.”
The retailer said the new locations will provide 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. The two warehouses will also create about 200 new jobs each and infuse additional economic benefits to local economies as a result of this growth.
“We are thrilled to partner with Ahold Delhaize USA to design, build and operate these strategically-located retail distribution fulfillment centers over an initial term of the next 20 years. With state-of-the-art automation, these two facilities will deliver a combined 59,000 pallet positions to support the local brands of Ahold Delhaize USA in the Northeast and Mid-Atlantic regions,” said Fred Boehler, president and chief executive officer of Americold, a publicly-traded company (parent firm: Americold Realty Trust) that was founded in 1903. It operates 178 facilities and 2019 sales were $1.4 billion.
In addition, the retailer noted that the new facilities enable Ahold Delhaize USA to innovate in new frozen storage 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.
“Today’s announcement continues to reinforce how Ahold Delhaize USA is transforming our infrastructure to support the next generation of grocery retail,” added Lewis. “Through this expansion, we will continue to 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 companies’ distribution networks include 16 traditional and eCommerce distribution centers that service the local brands of Ahold Delhaize USA, including Food Lion, Giant Food, The Giant Company, Hannaford and Stop & Shop. The network will grow to 23 facilities by 2023. This enhanced distribution network will provide coverage for ADUSA’s local brands from Maine to Georgia.
All told, the companies 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.