Nestlé USA transitions DSD network to warehouse model
Nestlé USA has announced that it will exit its company-owned frozen Direct-Store-Delivery (DSD) network for its pizza and ice cream businesses and will transition to a warehouse model.
Nestlé USA has announced that it will exit its company-owned frozen Direct-Store-Delivery (DSD) network for its pizza and ice cream businesses and will transition to a warehouse model. This change will leverage the efficient warehouse network that Nestlé already uses for its frozen meals and snacks, which will enable the company to better meet the needs of retail customers and consumers. The phased transition will commence in the third quarter of 2019 and is expected to be complete 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.”
The food industry is facing unprecedented shifts in consumer behavior; how they eat, shop and engage with brands. At the same time, retail customers also are evolving how they do business. Nestlé is adapting to this new environment, and this transition is part of the company’s broader efforts to transform its organization to accelerate growth and win in the market.
As a result of the decision, Nestlé USA will close eight company-owned frozen distribution centers and its frozen inventory transfer points. According to the company, the transition from DSD is a building block of its business strategy and will be a key step toward its profitable growth agenda, which is focused on accelerating its value creation model, driving efficiency, and building sustainable growth.