Nestlé USA to close eight frozen distribution centers to enable growth in ice cream by simplifying route to market

By Jim Cornall contact

- Last updated on GMT

Nestlé said the move is part of the its broader efforts to accelerate growth and win in the market. Pic: ©Getty Images/magone
Nestlé said the move is part of the its broader efforts to accelerate growth and win in the market. Pic: ©Getty Images/magone

Related tags: Nestle, Ice cream

Nestlé USA has said it will exit its company-owned frozen Direct-Store-Delivery (DSD) network for its ice cream and pizza businesses and will transition to a warehouse model. The move means the closure of eight frozen distribution centers and frozen inventory transfer points.

The change will leverage the warehouse network Nestlé already uses for its frozen meals and snacks, which the company says will enable it 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.

Steve Presley, chairman and CEO of Nestlé USA, said, “Ice cream and pizza are growing categories in which we hold strong leadership positions. 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.”

Nestlé said this is part of the company’s broader efforts to transform its organization to accelerate growth and win in the market.

“Moving to a warehouse model has numerous benefits for us and our retail customers,”​ Presley said.

“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.”

Presley added, “This decision came after careful consideration and, while critical to achieve our business goals, it will impact employees in our sales and supply chain teams, and will result in the closure of eight company-owned frozen distribution centers and our frozen inventory transfer points. These employees have worked incredibly hard to serve our customers. Treating them with respect through this process is a top priority for us, and we are committed to doing all we can to provide them information, resources and support.”

The transition from DSD is a critical building block of Nestlé’s business strategy and will be a key step towards its profitable growth agenda, the company said, which is focused on accelerating its value creation model, driving efficiency and building sustainable growth.

1 comment

Turning the page

Posted by Chuck W,

I am sure Rick Cronkite and Gary Roger’s are spinning in their graves at this news. DSD and ‘cold hands in the case’ were the defining advantage that made Dreye’s/Edy’s the most powerful presence in the ice cream category ever. Too bad Nestle couldn't figure out how to harness the creativity and innovative spirit that DSD possessed.

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