Nestlé USA has announced that it will no longer use its company-owned frozen Direct Store Delivery (DSD) network for its pizza and ice cream businesses, and plans instead to move to a warehouse model.
Warehouse Network
The change will leverage the warehouse network that Nestlé utilises for its frozen meals and snacks. This will enable the company to better meet the needs of retail customers and consumers, it said.
The transition will begin in the third quarter of 2019 and is expected to be completed early in the second quarter of 2020.
“Ice cream and pizza are growing categories in which we hold strong leadership positions” said Steve Presley, chairman and CEO of Nestlé USA.
“As we continue to focus on driving long-term profitable growth, leveraging a simpler route to market unlocks resources we can use to fuel our efforts in demand generation, such as product innovation and brand building.”
Food Industry
The food industry is facing unprecedented shifts in consumer behaviour, looking into how they eat, shop and engage with brands, but at the same time, retail customers are also evolving how they do business.
Nestlé said that it is working to adapt to these changes and the transition marks a 'big step' in the company's attempts to strive in this new environment.
“Moving to a warehouse model has numerous benefits for us and our retail customers,” said Presley.
“By taking advantage of the unmatched breadth and depth of our existing frozen warehouse network, our retail customer partners can better leverage their existing networks. This change is a win-win for Nestlé and our customers.”
The transition from DSD will be an important factor in their efforts towards driving a profitable growth agenda at the food business, which is focused on accelerating its value model, driving efficiency and building sustainable growth, it said.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Helen Galgey. Click subscribe to sign up to ESM: The European Supermarket Magazine.
