Dive Brief:

• Kroger has partnered with logistics firm Knapp to expand the grocer’s Great Lakes distribution center in Delaware, Ohio, and add automation technology that will increase efficiency and more than double the facility’s capacity, according to a news release on Friday.
• The expanded facility will use Knapp’s OSR (order, storage and retrieval) shuttles to deliver grocery cases to robotic palletizers, which prepare items for shipment to stores. 
• “The expansion of the facility is part of the ongoing transformation of our supply chain network,” Tony Lucchino, Kroger's vice president of supply chain and network strategy, said in a statement.  

Dive Insight:

Kroger is adding more automation capabilities to its supply chain network as it seeks to make the process of moving goods through its warehouses and into stores more efficient.

The company’s Great Lakes distribution center, which opened in 2003, currently services 115 stores in central and northwest Ohio, and in southeast Michigan and the Ohio River Valley region, according to Friday’s announcement. The expansion, which will wrap up this summer, will add 130,000 square feet to the facility.

Knapp’s automated shuttles store and retrieve goods spanning a range of sizes inside custom-built, grid-like systems. In the Great Lakes facility, those shuttles will then deliver goods in an exact sequence to Knapp's Runpick palletizers, which form the goods into pallets that can then be shipped to stores.

"Kroger's investment in Knapp’s latest technology allows the Great Lakes Distribution Center to improve efficiency in replenishing our stores, enabling us to quickly deliver fresh food to our customers,” Lucchino said in a statement, noting that the partnership is also “delivering innovation and scalability that can grow with demand."  

Knapp CEO Josef Mentzer noted in the release that the warehouse expansion “has been designed to add a new level of flexibility to the Kroger supply chain network.”

Kroger is injecting automation into its distribution network in order to boost online fulfillment as well as store replenishment. Its first two automated customer fulfillment centers built in partnership with Ocado are now filling orders in Ohio and Florida, and nine additional facilities are set to come online by the end of next year. One of those additional facilities will also be located in the Great Lakes region — a 135,000-square-foot warehouse in Romulus, Michigan.

Kroger, which recently raised its financial outlook for the year, saw digital sales double to more than $10 billion last year and expects those sales to double again by the end of 2023.

Knapp provides logistics hardware and software across a range of industries, including food, retail and healthcare. It has worked with Takeoff Technologies to build automated micro-fulfillment centers and recently opened an online fulfillment center with Australian grocer Woolworths that processes more than 50,000 orders per week.