Ahold Delhaize USA takes another step toward self-distribution

Ahold Delhaize USA (ADUSA) is edging closer to fully integrated self-distribution across its East Coast trade area.

ADUSA said Tuesday that its 600,000-square-foot distribution center in Chester, New York, has become part of the self-managed supply chain network. Acquired from C&S Wholesale Grocers, the facility serves Stop & Shop and Hannaford supermarkets in the Northeast.

The move furthers a three-year supply chain transformation unveiled in December 2019. Under the $480 million plan, Zaandam, Netherlands-based parent Ahold Delhaize aimed to have more than 85% of its U.S. distribution network—integrating brick-and-mortar and e-commerce—be self-managed by the end of 2022. A company spokesman said the network now stands at about 85% self-distributed after finishing 2022 slightly under that percentage.

“We’re excited to welcome Chester into the supply chain network,” Sanja Krajnovic, executive vice president of distribution and transportation, said in a statement. “The conversion of the site is an important step in the completion of our work to move to a self-distributed network. We look forward to delivering our ‘Trusted to Always Deliver’ mission in Chester so the brands we serve can be depended on by their customers whenever, wherever, however they want to shop.”

The Chester DC houses multi-temperature and freezer space, and its yard has more than 350 trailer spots, with almost 100 dock doors to keep items moving in and out as smoothly, according to ADUSA. The facility processes an estimated volume of 65 million cases of product annually and employs nearly 500 workers, including personnel from ADUSA Distribution, ADUSA Transportation and third-party labor providers such as C&S.

“There’s a great team in place at Chester, and we’re excited for this opportunity to serve our brand partners more directly and continue to be a great neighbor in the Chester community,” commented Sammy Tsang, director operations for the Chester distribution center.

Most recently, in May 2022, ADUSA had integrated a DC in York, Pennsylvania—also a former C&S facility—into its self-managed network. The addition of the 1.2 million-square-foot, automated York site—the largest in the network—brought the total number of self-managed DCs to 22. The Chester DC became No. 23 when it went live on the network this past Sunday.

The York DC supplies non-perishable products to nearly 400 Giant Food and Giant/Martin’s (The Giant Company) stores. Procurement at the DC is managed by ADUSA Procurement, while C&S continues to provide third-party labor services. 

In March 2022, ADUSA converted its 1.2 million-square-foot DC in Bethlehem, Pennsylvania, to the self-managed network, the first location to make the shift in 2022. A leased facility acquired from C&S, the Bethlehem DC serves the Stop & Shop and The Giant Company stores and e-commerce centers.

Plans call for ADUSA to transition two more DCs to self-management this year: automated frozen warehouses in Plainville, Connecticut, and Mountville, Pennsylvania, both developed by cold storage provider Americold under a partnership announced in mid-2020.

The ADUSA spokeswoman said receiving is now under way at the Mountville location, and outbound service is slated to start this fall, with the Plainville facility coming online thereafter. That will bring the total number of integrated self-distribution facilities for store and e-commerce fulfillment to 25, up from 15 when the transformation plan was announced.

Based in Scarborough, Maine, the ADUSA Supply Chain family of companies includes ADUSA Supply Chain Services, ADUSA Distribution, ADUSA Transportation and ADUSA Procurement The network, which moved more than 1.2 billion cases in 2022, serves the 2,049 stores and e-commerce operations of the Stop & Shop, Giant Food, Giant/Martin’s, Food Lion and Hannaford supermarket chains on the East Coast, as well as online grocer FreshDirect.