USA – Kraft Heinz, the fifth-largest food, and beverage company in the world, has allocated more than US$400m to build a new automated consumer packaged goods distribution center.

The 775,000 square-feet facility, as revealed by the company will improve supply chain efficiencies and be able to distribute its products to retail and foodservice customers “faster than ever”.

It will be situated in DeKalb in Illinois and will become one of the largest automated consumer packaged goods (CPG) DCs in North America.

The new center’s design is set to include a “24/7 automated storage and retrieval system” which will be able to drive “twice the volume for Kraft Heinz customers”.

The food major added that the center will distribute more than 60% of the company’s foodservice business and approximately 30% of all dry goods.

Carlos Abrams-Rivera, executive vice president at Kraft Heinz, said: “The DeKalb distribution center is expected to play a critical role in our larger distribution strategy, moving more than 60% of Kraft Heinz dry goods in North America through our automated facilities.”

When finished, the facility will play a critical role in the Pittsburgh-based company’s operations. It also expects the facility to contribute to the company’s broader ESG goals.

The company has planned to implement sustainable technology to reduce the waste produced at the facility.

“We’re driving end-to-end transformation across our entire supply chain, investing in automated technology and digitized solutions to increase the agility of our logistics operations,” Erin Mitchell, vice president of logistics and head of network restructuring at Kraft Heinz, said.

The company is receiving a 50% abatement on its property taxes for the facility for 15 years, said Paul Borek, executive director of the DeKalb County Economic Development Corporation.

The planned facility is located within the DeKalb County Enterprise Zone, which makes it eligible for the property tax abatement as well as for a sales tax exemption on building materials used to construct the facility, Borek said. 

Kraft Heinz, which is co-headquartered in Chicago and Pittsburgh, has six manufacturing and distribution centers in Illinois and a research and development center in Glenview.

In 2020, it announced plans to cut  US$2 billion in costs over five years, putting the savings into marketing brands with high growth potential, including Lunchables and Heinz ketchup, to become more relevant to consumers.

In June 2021, the company invested around £140m (then $199.3m) into its UK factory, allowing it to produce a wider range of condiments.

In the same year, the packaged food company extended its lease at the Aon Center into 2033, which has about 1,400 employees.

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