empty warehouse with columnsWhen I had my own natural food distributing company back in the 1980’s, I started selling to Vons Grocery Company in Los Angeles (they were ultimately acquired by Safeway).

The buyer took a liking to me. He was the produce buyer and they assigned the new natural products category to him. I had just started out and had 2 delivery trucks and 5 employees.

They had 170 stores.

So he invited me to see their warehouses.

First, we went to the grocery warehouse.  It was filled with miles of pallet rack.  Guys on forklifts and motorized pallet jacks picking orders.  Lots of activity.  I was impressed and amazed.

Then we went to the produce warehouse.  It was empty!  “Where is all the product?” I asked.

He told me that they bought exactly what they needed for the stores every day, and then shipped it all out.  They didn’t time the market to take advantage of product prices that might be going up because the prices could just as easily go down.  So they bought what they needed and kept their produce fresh.  They didn’t use algorithms.  They just bought what they needed.  It was a great lesson learned for me.