Nestlé USA is set to exit its direct-store-delivery (DSD) network for its Pizza and Ice Cream businesses to shift to a warehouse model.
Set to begin in the third quarter of this year, the transition will be completed in the second quarter of 2020.
The transition, which will leverage the warehouse network used by Nestlé for its frozen meals and snacks, will enable the company to address the needs of retail customers and consumers.
It is reported to be part of the company’s broader efforts to transform its organisation to accelerate growth in the market.
Nestlé USA chairman and CEO Steve Presley 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.”
With this move, the company intends to better meet the needs of its frozen meals and snacks customers.
Presley further added: “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.”
The decision is expected to result in the closure of eight company-owned frozen distribution centres and inventory transfer points.
The transition from DSD is said to be a critical building block of Nestlé’s business strategy and will be a key step towards its profitable growth agenda.
