Supply Scan

News and trends from across the food supply chain.

"We are pleased to be partnering with two outstanding firms­—two of the oldest private equity firms in the business—which have a great understanding of our industry, from both a financial and operating standpoint," says Robert Aiken, president of U.S. Foodservice. "We have great confidence the strategic and financial support of these two firms will enable us to grow and better serve our customers."

Completion of the transaction is expected to occur in the second half of the year.

U.S. Cold Storage To Double Capacity

United States Cold Storage has announced a massive project involving new construction and expansion of five warehouse facilities in Florida, North Carolina, Pennsylvania and California that will double the company's storage capacity to over 150 million cubic feet by early next year.

"The expansion of our business in each geographic area is based on our belief in the logistical advantages of these locations including the excellent highway, rail and transportation efficiencies they provide," says David Harlan, president and CEO of Cherry Hill, NJ-based USCS.

The five projects also reflect the company's commitment to bringing energy efficient technology and environmentally-friendly systems to its facilities. Citing the new facility in Bethlehem, PA, as an example, the company reports it teamed with M&M Refrigeration, Federalsburg, MD, to develop an all new CO2 refrigeration system designed to maximize efficiency and minimize contamination risks. This technology will also be installed in future facilities.

The five projects are in Fresno, CA; Lake City, FL; Warsaw, NC; and in Hazleton and Bethlehem, PA.

Of the five, three are already underway, with two more scheduled to begin this summer. By 2008, USCS will be able to offer clients temperature-controlled warehousing and handling space in 30 facilities in nine states that include Illinois, Nebraska, Delaware, Tennessee and Texas, in addition to the newest projects.

"These new facilities represent the best the industry has to offer," says Jerome Scherer, vice president of national sales, marketing and governmental affairs.

"As part of the company's mandate to remain best-in-class, we are committed to continuous improvement—always finding ways to better serve the needs of the frozen food industry either with improved efficiency, reduced risk or cost control."

Supermarket Sales Increase In 2006

Supermarket industry sales increased 5.3 percent in 2006, and same-store sales rose 4 percent, the highest mark for this performance measure in more than a decade, according to the Food Retailing Industry Speaks: Annual State of the Industry Review 2007, released last month by Food Marketing Institute at the annual FMI Show in Chicago.

Sales figures were up 4.6 percent and 2.4 percent, respectively, in 2005.

The national chains reported a banner year in sales and profit growth, but the picture was far less rosy for many other retailers. In fact, same-store sales decreased for nearly one quarter (23.5 percent) of food retailers. All together, nearly half (47.1 percent) lost ground in same-store sales when factoring in inflation.

"These results are impressive in view of all the rising costs the industry must bear, including energy, healthcare, credit card interchange fees and the imperative to keep improving products and services in today's extraordinarily competitive marketplace," says Michael Sansolo, senior vice president, Food Marketing Institute, Arlington, VA.

"However, it is also clear that many retailers are struggling to solve the puzzle of cutting costs as much as possible while continually improving customer service," says Sansolo.

The FMI report shows retailers are responding aggressively to diverse and changing customer demands by offering fresh, healthful and convenient products storewide.

They are offering meal solutions in multiple forms, including:

  • Hot service counters, 89.2 percent;
  • Self-service refrigerated cases, 83.8 percent;
  • Made-to-order sandwiches, 71.6 percent;
  • Soup bars, 67.6 percent;
  • Catering, 62.2 percent;
  • Separate checkouts for prepared foods, 58.1 percent;
  • Salad bars, 56.8 percent;
  • Sushi stations, 52.9 percent;
  • Snack/juice/coffee bars, 50 percent.

Raymond Celebrates 85th Anniversary

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