Fresh produce sourcing and distribution in Germany is becoming increasingly streamlined as retailers bring their supply chains under direct control, forcing suppliers to focus more and more on service provision in order to retain contracts.
Discount operator Lidl is working to establish its own exclusive storage network for fresh fruit and vegetables in the country, a move that follows Rewe’s recent decision to centralise its produce sourcing arrangements.
Since April, Rewe suppliers have been required to ship goods to a new main distribution centre in Leipzig, instead of regional centres as before, and the group is planning to open more in the near future.
As for Lidl, the development of a new procurement structure has been ongoing for several years but now appears to be reaching a climax with the reported construction of new warehouses in Dietzenbach, Landshut and Cloppenburg.
As reported in German grocery publication Lebensmittel Zeitung, the discounter is stepping up efforts to streamline and vertically integrate its network by working directly with a smaller group of service providers and, where necessary, investing in new warehouses to facilitate that co-operation.
It is believed Lidl will lease the warehouses back to those partners, in the process trimming delivery lead times and allowing it more flexibility in its choice of service provider.
As such, the move is causing a fair amount of concern within the fresh produce trade as it will make it easier for the discounter to drop suppliers who cannot meet its strict efficiency requirements in terms of time saved and costs cut.
When approached by the German trade weekly Fruchthandel Magazine and its European partner publication Eurofruit, Lidl suppliers declined to comment on the development. Lidl itself also refused to comment.
