7-Eleven Embarks On DSD Experiment

Dallas-based 7-Eleven is embarking on a direct-store delivery experiment in Southern California in hopes of sharpening up the entire DSD process, the company’s CEO, Joe DePinto, announced last week at the 2008 Beverage Forum in New York.

The plan is not to bypass the DSD process, DePinto said, but to bundle rival marketers’ brands on the same truck from consolidated warehouse locations to minimize delivery runs. In a past experiment with Anheuser-Busch, 7-Eleven tried to reduce DSD inefficiencies, but it was a short-lived exercise.

DePinto said last week he’s ready to try again, this time brining rival brands to each 7-Eleven store from a single warehouse.

DePinto decried the “fragmented, inefficient” DSD delivery system, which he said generates chaos at the store level and clutters small parking lots during peak consumer traffic periods while leaving fast-moving items out of stock and slow-moving items gathering dust.

The industry needs to move toward a greener, more efficient system whereby “like products are delivered on the same truck,” DePinto said. The approach would more closely resemble the greater consolidation of distribution systems in UK and Japan, where 7-Eleven is also a recognized retail leader.

The experiment in Southern California is voluntary for suppliers, but DePinto said he expects enough key players to cooperate so he can launch the system sometime after the summer selling season ends. To date, Anheuser-Busch and Coca-Cola are believed to be willing to participate in DePinto’s experiment, other sources said, but 7-Eleven will also be looking to Miller, Pepsi and others for testing.

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