Dive Brief:
- J&J Snack Foods opened its third distribution center in May as part of an overhaul to simplify its logistics operations, as outlined last year.
- Located in Glendale, Arizona, the facility can accommodate 13,000 pallets of frozen food storage, including Dippin’ Dots, Superpretzel, Icee, Luigi’s Real Italian Ice and more.
- With all three of the company’s new regional distributions in operation, sales orders are now shipped from its new network, J&J Snack Foods President & CEO Dan Fachner said in a May 7 earnings call.
Dive Insight:
Back in January 2023, J&J Snack Foods’ CEO outlined plans to build three geographically optimized distribution centers to simplify its warehouse network. With all three distribution centers now operating, that part of the transformation is already “exceeding expectations,” Fachner told investors in its most recent earnings call.
Fachner said that 81% of sales orders are being shipped from the new distribution network versus only 26% a year ago. The average length of haul has also decreased by over 40% and on-time performance improved to 87% versus 74% a year ago, he added.
The company also aims to drive distribution costs as a percentage of sales down from 12.3% in its most recent quarter into a “10% or lower range,” he said.
In addition to Arizona, the company had already opened a distribution center in Terrell, Texas, which opened in July 2023 and another in Woolwich, New Jersey which opened in January 2024. The expanded capacity has created production efficiencies and higher output metrics through better automation, the CEO said.
The company also plans to add another self-owned facility for its Florida market but details are still being fine-tuned, Fachner said in the earnings call.
J&J Snack Foods has historically relied on third-party logistics partners to ship much of its stock but plans to close additional 3PL centers in the next three- to six-months.
J&J Snack Foods has further expanded its capacity through six new production lines, enabling efficiencies to grow its core products, including pretzels, churros and frozen novelties. Two newly added frozen novelty lines have also helped grow capacity, enabling the company to make similar products in different locations, leading to freight savings.
