Americold, Ahold Delhaize partner to build 2 automated cold chain warehouses

Dive Brief:

Ahold Delhaize will partner with cold storage provider Americold to build two fully-automated frozen warehouses, according to a press release.
The facilities will expand the grocer's cold storage space by 500,000 square feet and are part of the retailer’s previously announced supply chain transformation plan to grow Ahold Delhaize's distribution center network from 16 facilities to 23 by 2023.
Automation features in the warehouses will include integrated transportation management systems (TMS), end-to-end forecasting and inventory replenishment technology, the press release said.

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 two 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.

Sub-zero temperatures in cold chain warehouses pose challenges and limit what operations managers can automate.

"Things break quicker when they’re frozen solid," John Sidell, managing principal of the New Course Group, told Supply Chain Dive last year. "You get a drop of moisture that freezes the wrong thing and everything’s broken." He said RFID works well in cold warehouses, as RFID eliminates the need for scanners, which can fog up in cold temperatures.

Chris Lewis, executive vice president of supply chain with Ahold Delhaize's Retail Business Services, told Supply Chain Dive in December that the new cold-storage locations are strategically placed near populated cities to support delivery and pickup.

The 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.