ROUNDY'S TO BUILD FIRST CENTRAL COMMISSARY 2004-08-30 (1)

ROSEANNE HARPER

MILWAUKEE -- Roundy's, a wholesaler-retailer here, is looking to give its corporate stores some exclusivity by supplying them with private-label, fresh products -- including some unique to the company -- that it will manufacture.

The first step in the plan is the imminent construction, from the ground up, of a 100,000-square-foot central commissary -- the company's first manufacturing facility -- on a large parcel of company-owned land in Kenosha, Wis.

A wide array of products cutting across most of the fresh-food categories will be on the manufacturing schedule.

"We want to provide our customers with items that are good for this marketplace, but ones that can't be found elsewhere," Roundy's spokeswoman Lynn Guyer told SN. "That's one of the reasons. As the center progresses, variations of items will be added and completely new items will come on board," she said.

"That's the exclusivity part of this, but there are also quality-control aspects and we'll realize cost savings. I think they're all connected."

The location, she said, will be ideal for supplying all the stores the company owns and operates under the Copps Food Centers, Rainbow Foods and Pic 'n Save banners.

If all the necessary building permits and licenses are secured as soon as expected, construction will begin this fall. Production lines will roll shortly after the first of the year. "During the first quarter of 2005, we'll be doing start-up manufacturing. I'll assume that at that point we'll be producing some products that can only be bought at Roundy's corporate stores," Guyer said.

First off the production lines will be some private-label products, including sausage, orange juice and water, that are currently supplied to Roundy's by several different vendors.

However, there will be many more items -- especially ones unique to Roundy's -- added in the categories of meat, produce, deli and dairy, Guyer said.

Since the structure will sit on a piece of land that's just shy of 17 acres, there is room for expanding the plant itself if deemed necessary in the future.

The company, which moved its headquarters last year from Pewaukee, Wis., to a new building in Milwaukee, owns and operates 31 stores under the Rainbow Foods banner, 29 under the Copps Food Centers banner, and 61 under the Pic 'n Save banner.

Also, the company is in the process of finalizing the acquisition of another group of seven Pic 'n Save stores in Wisconsin.

In addition to its own stores, Roundy's as a wholesaler supplies more than 800 independent grocers in the Midwest.

At this point in time, it is undetermined whether or not the new facility will eventually turn out products for some of those grocers.

The endeavor should help Roundy's competitive position in the markets it serves, one local industry observer told SN.

"Roundy's will be able to improve their branding in the market by providing signature items available only at Roundy's-owned stores," said David Livingston, principal, DJL Research, a Pewaukee consulting firm that works with supermarkets. "H-E-B has done this in Texas with great success.

"It's an excellent way to differentiate your stores from larger, lower-priced competitors such as Wal-Mart," Livingston said.