adidas Group Canada Distribution Center Sets New E-commerce Standard

Fall 2015
The new adidas Group Canada distribution center in Ontario, Canada, totals more than 1 million square feet.

A new facility in rural Ontario enables distribution of goods from four separate brands to stores and directly to customers. 

WITH EVERY MAJOR new development project, plans are made, teams are formed and bars are set — high and then even higher. Everyone involved hopes that when the dust has settled, the end result will exceed expectations. 

Such was the case with the new adidas Group Canada distribution center in Ontario, Canada. The project began in 2008, when the company began planning an expansion strategy to handle its four brands, adidas, Rockport, Reebok and TaylorMade. The company’s previous distribution center, in Brantford, Ontario, was at capacity and the company was using other locations for its distribution requirements. It needed a new facility from which it could distribute products throughout Canada, both to stores and directly to customers.

The project presented both incredible challenges and exciting opportunities. adidas Group is a global leader in the sporting goods industry and offers a broad portfolio of products. All of the real estate professionals involved in the project were keenly aware of the exacting standards and specifications involved in working with a major international brand of this caliber.

The sheer size of the project — over 1 million square feet — matched the significance of the international company for which it was being built. The development team was charged with creating a state-of-the-art warehouse, distribution and fulfillment center with ancillary light apparel manufacturing uses in a rural area. The distribution/fulfillment center also had to include a mezzanine, office space and a 38-foot-clear warehouse.

map of Canada

Locating the facility in the Brant 403 Business Park, about 70 miles southwest of Toronto, resulted in significant cost savings. The county widened Highway 24 and Bethel Road, improved ramps onto and off of Highway 403, and installed two traffic lights to improve traffic flow from the park.

adidas Group Canada gathered an international team to take this project from conception and design to construction and completion. The team included adidas Group Canada as well as developer Panattoni Development Co., broker and project manager JLL, general contractor Belrock Design-Build Inc., supply chain consulting firm Sedlak Management Consultants and Ware Malcomb, which provided architectural design services. One of the major challenges of the project involved the vast amount of detailed coordination required among the development team, contractor and consultants.

Financial Considerations

A key factor in adidas Group Canada’s decision to locate its new distribution center in the County of Brant, about 70 miles southwest of Toronto, was the financial savings, as well as the county’s extraordinary accommodations to welcome the global brand to its community. Land and development costs in the county were much more economical than they would have been in surrounding municipalities in the Greater Toronto area proper, which saved the company tens of thousands of dollars. Development costs were 75 percent less and land approximately one-tenth of the cost of other Greater Toronto municipalities.

“The collaboration between adidas Group Canada and the county was incredible,” said Fraser Plant, JLL senior vice president and national director, industrial. The county’s accommodations included scraping the site to make it pad-ready for the adidas Group Canada distribution center, as well as others described below.

Location and Economic Impact

adidas Group Canada chose the Brant 403 Business Park for its new major distribution facility because of the park’s proximity to the company’s head office in Woodbridge, Ontario, the available land and a skilled workforce. The company’s 82-acre site represents about 68 percent of the 121-acre business park. With the completion of the new distribution center, the facility has the capacity to allow adidas Group to double its workforce from the number of workers at its previous facility in nearby Brantford.

exterior view of warehouse

The built-to-suit facility includes a truck loading area on the east side, complete with 48 loading docks and two drive-in doors.

“The county is truly ecstatic with this investment, as it has resulted in the creation of jobs, tax revenue and what are sure to be great economic spinoffs moving forward for the county as well as the region,” said County of Brant Business Development Officer Michael Buranyi.

One of the first challenges faced by the project team involved the site’s location in a rural area, at the junction of Highways 24 and 403 but without access to these major transportation routes. To accommodate the traffic that would be generated by the building once it reached full operation, the county widened Highway 24 to provide added capacity to the provincial highway system. The county also widened a service road (Bethel Road), improved the ramps onto and off of Highway 403, and installed two sets of traffic lights to improve traffic flow from the Brant 403 Business Park. The road on which the new adidas Group Canada distribution center sits was named Adi Dassler Way, in recognition of the original German sportswear company’s founder, Adolph Dassler.

Innovation and Sustainability

adidas Group Canada’s 1,012,500-square-foot built-to-suit facility includes a truck loading area on the east side, complete with 48 loading docks and two drive-in doors. The west side of the building provides an additional four truck docks and one drive-in door. The building and site have been designed to accommodate a fully operational double-loaded truck loading facility in the future, if required. The precast Flexwall facility also includes a light manufacturing area, a 247,900-square-foot mezzanine and 24,000 square feet of office space.

interior view of warehouse

The precast Flexwall facility includes a light manufacturing area, a 247,900-square-foot mezzanine, 24,000 square feet of office space and a 38-foot clear warehouse.

The south wall is constructed of metal siding to allow for future expansion. The warehouse portions of the distribution center boast a 38-foot clear height to accommodate a highly complex automated material handling system and racking system.

Some of the project’s most notable innovations include the following:

Sustainability. One of the world’s three most sustainable companies (according to Corporate Knights, a Toronto-based media, research and financial information products company), adidas Group Canada set out to build a facility that met its sustainability initiatives. The facility includes a 90,000-square-foot solar-ready roof structure that is structurally reinforced for 500 KW of solar panels, which it plans to install in the near future. The building also features a variety of energy-efficient systems and lighting controls. In March 2015, Brant County Power recognized the high-efficiency approach to the building’s construction by presenting adidas Group Canada with a check for over $322,000, the largest energy-efficiency incentive ever awarded in the county.

Fire Suppression. An advanced fire suppression system was designed in conjunction with fire protection engineers from the adidas Group in Germany. The sophisticated material handling system consists of conveyors and sorters that needed to be protected by sprinklers. Early suppression fast response (ESFR) sprinkler heads are installed in the warehouse area above the racking. An on-site 200,000-gallon water tank provides the water output needed for fire suppression throughout the building.

Automation. The facility includes a fully automated and elevated conveyor system that handles products for all four of adidas Group’s brands. The project team had to design for loads supporting fire suppression and material handling equipment hanging from the mezzanine and roof structure. The rapid conveyance system enables the company to take products from large pallets of sporting goods and send them to major retail stores and the company’s own stores. At the same time, it can process a customer’s online order for a single pair of tennis shoes. The facility’s distribution (to stores) and fulfillment (to e-commerce customers) functions are fully integrated throughout the building. A separate area handles returns.

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Speed. The large-scale facility was completed on time and with no major delays. It was fully enclosed in less than 12 months; construction was completed in 14 months. The development team kept the project on schedule by phasing construction and bringing trades on-site earlier than anticipated.

Design. The exterior features a clean, contemporary design, with neutral colors that are consistent with the adidas Group corporate brand color scheme. Since the facility was designed to house products belonging to all four brands under the adidas Group umbrella, it was important that the exterior not be branded solely as an adidas sportswear building. The office portion consists of concrete precast panels and curtain wall spanning two stories to accommodate a main office on the ground floor and a lunchroom on the mezzanine level.

The facility, from which the company now serves all of Canada, was one of the most significant projects completed in the County of Brant in 2014. adidas Group Canada president Michael Rossi told a local newspaper that the company “takes great pride in our operations in this country.”

“This project involved an incredible collaboration among adidas Group, the county, the broker, developers, the contractor and the design team,” said Frank Di Roma, regional director of Ware Malcomb’s Toronto office. “We are so pleased with the result and are confident adidas Group Canada will enjoy many productive years to come in its modern new distribution center.”

In April 2015, the project was named Industrial Development of the Year by NAIOP Greater Toronto at its annual Real Estate Excellence (REX) Awards Gala.