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Kellogg's closes DSD Warehouses: How does this affect you?

Tags: Kellogg's, DSD, Wholesale, closing

On February 8, 2017, Kellogg Co. released a press release saying it will begin exiting it's DSD network.  

John Bryant, Kellogg Company Chairman and CEO: "We have to change the way we reach and communicate with consumers. Because our customers' and our own warehouse distribution systems have become more efficient and effective, we can now redeploy resources previously tied to DSD and direct them to the kinds of brand investments that drive greater demand with today's consumers − ultimately growing our business and our retailers' businesses."

This news could be a mixed bag for some DSD businesses.  For smaller markets, independent distributors could pick up more market share from the closing, as Kellogg may opt to use independents for warehousing. Whereas, some smaller DSD businesses that have current contracts with Kellogg will surely see those contracts renegotiated, or terminated altogether.

bMobile route user Nathan Perez of Nathan's Wholesale says that he has not seen a significant difference in his business yet, but it may mean a big difference for some.  The biggest difference for him has been that Kellogg shipments arrive in LTL loads, rather than from employee drivers.  He also states that the change could mean more for other distributors than it does to his business, as Kellog may need more independent distributors to "take up the slack".

Whether this change is a windfall, or a detriment definitely remains to be seen, but the one take-away from this move is that the game continues to change, so adaptation of business is key to survival.  bMobile can help businesses to adapt with the market, with new features and compatibility that help DSD Wholsale businesses streamline and automate processes.

-Troy Kesner, bMobile Marketing Lead 

 

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