Costco Tests Supply Chain Concept By Bringing Poultry Production In-House

Costco Tests Supply Chain Concept By Bringing Poultry Production In-House
Delivery & Logistics

The unprecedented move aims to keep the store's low prices stable and has the potential to influence other retailers and the industry at large

Kim Windyka
  • 28 september 2018

In an effort to cut costs, ensure a reliable flow of product and gain more visibility into the supply chain, bulk retailer Costco recently decided to produce a portion of its poultry in-house. More than 100 million chickens will be processed annually at the new facility in eastern Nebraska, supplying the store with a third of the rotisserie chickens it needs in one year.

While Costco will keep the retail price of each chicken at $4.99, it will save approximately 10 to 35 cents per chicken with the new process. While Costco is the first in its industry to tackle the potential challenges of meat production, it isn’t the only major retailer to embrace the concept of internal sourcing. The likes of Walmart, Safeway and Kroger have opened their own dairy manufacturing centers in order to control the production of their milk, cheese and ice cream.

If the initiative proves successful, Costco may eventually move all of its chicken processing internally.

Costco

In an effort to cut costs, ensure a reliable flow of product and gain more visibility into the supply chain, bulk retailer Costco recently decided to produce a portion of its poultry in-house. More than 100 million chickens will be processed annually at the new facility in eastern Nebraska, supplying the store with a third of the rotisserie chickens it needs in one year.

+chain
+Convenience & Supermarket
+Costco
+delivery & logisitics
+Food
+food & beverage
+Grocery
+merchandising & curation
+supply chain

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