Paleteria La Michoacana Transitions California Distribution
06/25/2012 – Modesto, Calif. (PRNewswire) – Paleteria La Michoacana ("PLM"), the Modesto based manufacturer of Hispanic ice cream treats, announced finalizing the transition of its distribution to independent distributors. PLM signed long term agreements with the state's leading independent distributors of frozen food and ice cream – West Pico Foods, Quality Ice Cream, and Wonder Ice Cream. According to President, Ignacio Gutierrez, "This has been in the works since late 2010 when we decided to bring in new capital to finance our growth and get more efficient in our plant and distribution". "The costs of a DSD ("Direct Store Delivery") fleet just did not make sense since our sales are so seasonal and the efficiencies that the major retail and 'big box' chains demand just made it untenable financially and operationally."
The company transitioned its entire California DSD over to independent distributions in May, though it began incrementally as early as 2009. According to major retailers, DSD has become a fragmented and inefficient system that clogs supermarkets and "big box" loading docks and floor space with as many as 50 to 60 deliveries per day. The general consensus among the leading chains is that DSD is arcane and complicated and takes store operators away from servicing customers.
"We have seen this progression here in California as more chains have requested we distribute our product through accepted independent distributors loaded with other frozen products (pizzas, frozen meals, meats, etc.)", according to Vice President, Patricia Gutierrez. Gutierrez continued, "We have worked with our own DSD and these distributors for years so the transition has been pretty easy and we expect very little disruption to retailers and our customers throughout the state.
The southern California market is now being serviced by West Pico Foods (Los Angeles area) and Quality Ice Cream (San Diego and Orange County). According to Don Lubitz of West Pico Foods, "We are thrilled to develop an even closer working relationship with PLM. The brand is one of the fastest growing in the novelty ice cream space in the state and provides West Pico an opportunity to grow with them. We have been working closely and increasingly since 2009 and it was the natural next step."
In northern California, Wonder Ice Cream is now handling the Bay area and the Central Valley, PLM's legacy market. According to Alex Alfar of Wonder Ice cream, "Our team has worked tirelessly the last several months planning and executing on switching over. We expect little impact on consumers and retailers."
In closing, according to Ignacio Gutierrez, "The new system is expected to support even better service levels for customers (more frequent service, broader geographic coverage, etc.), provide greater opportunities for the independent distributors through larger drop sizes, given the combined volume resulting from their other frozen products and permit PLM better control of its distribution expenditures."
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