Kellogg moves away from D.S.D.
Kellogg Co. on Feb. 8 said it would begin to exit its direct-store delivery (D.S.D.) network in the second quarter, transitioning the D.S.D. portion of its U.S. Snacks business to the warehouse model already used by Pringles and the rest of its North American business.
Kellogg said it believes the new warehouse model will be “transformational” for the Battle Creek, Mich.-based company, helping to reduce complexity and cost structure in the business while driving growth and profitability for Kellogg and its retail partners.
A major factor driving Kellogg’s decision to switch distribution models is the changing landscape of consumer shopping patterns. The company said consumers increasingly are shopping in both a wider variety of retail outlets and on-line, and by shifting resources from the operational support of D.S.D. to brand building, shopper marketing and pack formats that better meet consumers’ evolving needs, Kellogg believes it will be able to better drive growth in its snacks business.
