Dive Brief:

• Ahold Delhaize has announced cold storage provider Americold as its partner to build two fully-automated frozen warehouses, which are a part of the retailer’s previously announced supply chain transformation plan, according to a press release. 
• The two facilities will be in Plainville, Connecticut, and Mountville, Pennsylvania. The Plainville warehouse will serve Ahold Delhaize’s Northeast brands, including Stop & Shop and Hannaford, and the Mountville facility will serve its Mid-Atlantic brands, which include The Giant Food Company, Giant Food and Food Lion.
• The new facilities will expand the grocer's cold storage space by 500,000 square feet and provide increased product freshness and faster delivery in addition to enabling local product expansion. The facilities are part of a supply chain transformation project that will grow Ahold Delhaize's distribution center network from 16 facilities to 23 by 2023.

Dive Insight:

Late last year, Ahold Delhaize announced plans to invest $480 million on new facilities and renewed warehouse leases in order to transition to a self-distribution supply model that will improve margins and reduce the company's reliance on third-party distributors.

The three-year plan includes buying up three facilities from C&S Wholesale Grocers and implementing technology enhancements like an integrated transportation management system and end-to-end forecasting and replenishment technology, and is expected to save the company $100 million annually. 

The two new automated cold-storage facilities, which were previously announced but not outlined in detail, will collectively provide 59,000 pallet positions to Ahold Delhaize's retail stores, and will operate on 20-year leases. Each facility will have 200 workers.

“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," Chris Lewis, executive vice president of supply chain with Ahold Delhaize's Retail Business Services, said in a statement. "This will result in efficiencies and, most importantly, product availability and freshness for customers of our local brands​."

Lewis, recently told Supply Chain Dive that the new cold-storage locations are strategically placed near populated cities to support delivery and pickup. 

Another retailer that has recently transitioned to a self-distribution model is Dollar General. The discount retailer plans to double the scale of its DG Fresh program for its fresh and frozen items, and aims to reach 12,000 company stores by the end of this year.