Ahold Delhaize USA moves closer to full self-distribution

At the halfway point of a three-year supply chain transformation, Ahold Delhaize USA expects more than 85% of its distribution network to be self-managed by the close of 2022.

ADUSA Supply Chain, the distribution arm of Ahold Delhaize USA, said Wednesday that it will convert five more distribution centers to self-management next year. That will raise the total number of integrated self-distribution facilities to 25, up from 15 when the $480 million plan was announced in December 2019.

The network serves both the 2,028 stores and e-commerce operations of Ahold Delhaize USA’s Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford supermarket chains on the East Coast.

Facilities slated to transition to the ADUSA Supply Chain network in 2022 include distribution centers in Bethlehem and York, Pa.; Chester, N.Y.; and two fully automated frozen warehouses in Mountville, Pa., and Plainville, Conn., opening in partnership with cold storage provider Americold.

Two fully automated frozen warehouses, built in partnership with Americold, are slated to open in late 2022.

Most recently, in March, ADUSA shifted procurement from the Freetown Grocery DC in Assonet, Mass., which supplies Stop & Shop, to the self-managed network. The move gave the 1.1 million-square-foot facility direct control of inventory and replenishment.

Plans call for DCs in Jessup, Md. (serving Giant Food), and Carlisle, Pa. (serving The Giant Company), to transition procurement services to the self-distribution network in 2021. ADUSA said this year also will see the opening of new DCs in Mauldin, S.C. — part of Food Lion’s June 2020 acquisition of 62 Bi-Lo and Harveys stores from Southeastern Grocers — and in Manchester, Conn., which will supply Stop & Shop.

Related:Ahold Delhaize USA completes step one in shift to self-distribution

“This is one of the largest supply chain transformations ever undertaken in our industry,” ADUSA Supply Chain President Chris Lewis said in a statement. “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.”

That efficiency will come from the deployment of artificial intelligence-enabled forecasting and replenishment, an integrated transportation management system and an integrated workforce management system, among other new technology, according to ADUSA. The Scarborough, Maine-based ADUSA Supply Chain family of companies includes ADUSA Supply Chain Services, ADUSA Distribution, ADUSA Transportation and ADUSA Procurement.

The ADUSA network serves the 2,028 stores and e-commerce operations of the Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford supermarket chains.

When reporting fiscal 2020 results in March, Zaandam, Netherlands-based parent Ahold Delhaize said the five U.S. facilities moving to self-distribution in 2021 will lead to 65% of procured center-store volume being self-managed by the year’s end, versus 40% to 45% in 2020.

Related:Ahold Delhaize USA taps Americold for new automated frozen warehouses

“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,” Lewis added.

In announcing the three-year supply chain expansion and shift to self-distribution in 2019, Ahold Delhaize USA said effort included the acquisition of three warehouses (two in York and one in Chester) from C&S Wholesale Grocers and new leases for a warehouse in Manchester, Conn., and a C&S facility in Bethlehem, Pa., as well as the construction of two new frozen warehouses.

Of the automated frozen facilities being built with Americold, the Plainville warehouse will serve Stop & Shop and Hannaford stores in the Northeast and New England, and the Mountville warehouse will serve Giant Food, Giant/Martin’s and Food Lion stores in the Mid-Atlantic. Ahold Delhaize has said it expects the new frozen facilities to go into operation by the fourth quarter of 2022.