Ahold Delhaize US: acquisitions and sustainability goals

Date : 04 March 2021

Jon Wright

Head of Insight - RA EMEA

As Ahold Delhaize investigates opportunities for acquisitions in the US and sets out its new health and sustainability goals, we round up news from the retailer.

Ahold Delhaize looking for acquisition targets…

In an interview in the Financial Times, Ahold Delhaize’s chief executive, Frans Muller, has discussed the opportunities for the retailer to act as a consolidating force in the fragmented US market. Muller was quoted as saying, ‘We expect more consolidation’ and said how Ahold Delhaize was expecting to play a role in this process. Muller pointed to the rising costs being faced by independent firms, due to COVID-19 and rises in minimum wages, but also from the need to invest in ecommerce.

Muller pointed to Ahold Delhaize’s own investment in the ecommerce channel, which saw revenues double in the US to more than US$2.0 bn. Aided by its acquisition of FreshDirect, he said the retailer was expecting sales to rise a further 60% in 2021. Much of this will come through click and collect solutions, which Muller said grew quicker in the US in 2020 than home delivery solutions.

…As it reaches ‘milestone in its supply chain transformation

In a separate announcement, the company said it had reached ‘a milestone in its supply chain transformation to create an integrated self-distributed supply chain of the future’. The statement came as the retailer took full control of a distribution centre in Massachusetts, which will enable it take ‘direct control of inventory and replenishment at [the] facility’.

Commenting on the step, Stop & Shop’s vice president of distribution operations, Jim Labrecque, said: “This transition is an important one for the Stop & Shop brand because it gives us more control and ultimately enables us to better serve our stores and our customers at more than 200 Stop & Shop locations across Massachusetts, Connecticut and Rhode Island.” This is one of six distribution centres that will transition into Ahold Delhaize’s self-managed network in 2021.

Ahold Delhaize US sets out sustainability goals

As it looks to develop a more sustainable food supply chain, Ahold Delhaize US has set out its new health and sustainability goals. The retailer said it is aiming ‘to enable customers to make healthier choices, create greater product transparency, eliminate waste and taking bold climate action’.

Under the framework, Ahold Delhaize will target four areas to focus on

  • Healthier Choices: through a combination of educating shoppers, through its Guiding Stars system, and enabling access to healthier options, through its association with Partnership for a Healthier America, the retailer said ‘Ahold Delhaize USA and its local brands aim to have 54% of private brand food sales come from healthy sales by 2025’;
  • Greater Transparency: to help shoppers know about where their food comes from, ‘by 2025, Ahold Delhaize USA will enhance the information provided about where products come from, beginning with fresh produce and meat. Ahold Delhaize USA will expand its current progress to sustainably sourced seafood, coffee and tea to be 100% sustainably certified in cocoa, palm oil, pulp and paper products and packaging and making key advances in animal welfare and human rights
  • Eliminating Waste: by reducing waste and eliminating hunger in local communities. This is seeing the retailer ‘by 2025… committing to reduce food waste by 32% and 50% by 2030. Ahold Delhaize USA will continue work toward Zero Waste by achieving 90% waste diversion. Additionally, by 2025, Ahold Delhaize USA will seek to reduce overall use of problematic single use plastics. This includes making private brand products 100% reusable, recyclable or compostable and increasing recycled content by 25% by 2025
  • Taking Bold Climate Action: by committing to reducing the absolute emissions it generates from its business. To this end Ahold Delhaize is committing ‘to reduce carbon emissions by 50% from its own operations by 2030, while working with suppliers to reduce emissions from the supply chain by 15%

Want more insight on Ahold Delhaize and its global strategy?

Retail analysis subscribers can read our strategic outlook on the retailer’s medium term priorities following the evolution of its strategy to help it solidify its position as an industry-leading local omnichannel retailer in 2021 and beyond.