Wholesaler KeHE Distributors plans to acquire DPI Specialty Foods, a western U.S. specialty foods distributor, from food and beverage-focused private equity firm Arbor Investments, Chicago.
The companies did not disclose the financial terms of the agreement, or a timetable for finalizing the deal. Naperville, Illinois-based KeHE said that both companies will operate independently until the transaction closes, pending regulatory approval and the completion of customary closing conditions.
An employee-owned, B Corp-certified company, KeHE supplies natural, organic, fresh and specialty food, groceries and other products to more than 30,000 natural food stores, supermarket chains, independent grocery stores, online retailers, retail pharmacies, convenience stores, foodservice providers and specialty retailers across North America.
KeHE said the addition of Ontario, California-based DPI will bring more than 1,000 customers across channels.
Delivering products in a one-truck solution, the combined company will be able to provide high-touch support to all customers, backed by data-driven insights, business intelligence tools and more warehouse space to fuel scalable growth, the company said. DPI also will boost KeHE’s fresh food portfolio, enabling retailer partners to respond more quickly to consumer demand, the company added.
“KeHE is dedicated to being a source for good, and this expansion provides an opportunity to deliver enhanced experiences for customers, suppliers, and ultimately, consumers,” KeHE President and CEO Deb Conklin, who joined the distributor as chief executive earlier this year, said. “This year, we’re celebrating seven decades of serving and feeding America, and this acquisition continues to position KeHE as the preferred supply chain partner in North America.”
DPI supplies ambient, chilled and frozen specialty foods—including gourmet, natural, organic, gluten-free, local and ethnic foods—to 17 Western states through distribution centers in Henderson, Colorado (Rocky Mountain Division); Tualatin, Oregon (Northwest Division); and Ontario, California (West Division). The Denver-area warehouse totals 130,000 square feet and offers more than 11,000 items, while the Portland-area facility spans 250,000 square feet and houses more than 18,000 products. DPI’s largest distribution center, the 424,000-square-foot Los Angeles-area warehouse, carries more than 15,000 items.
“Both DPI and KeHE have built impressive networks, deep industry and category expertise and value-added services over decades of operation,” according to Russ Blake, CEO at DPI Specialty Foods. “Combining our complementary strategies allows us to further capitalize on those strengths to offer superior value for the U.S. food industry.”
The acquisition of DPI continues KeHE’s expansion of its distribution network and customer base. Adding to its share of the c-store space, in November, KeHE landed a primary distribution partnership with Midwestern convenience-store retailer Kum & Go LLC, adding KeHE as a primary partner for 80 locations, with plans to expand to more locations and to improve distribution and increase product assortment. (In April, Salt Lake City-based c-store retailer Maverik acquired Kum & Go, a family-owned chain with more than 400 locations across 13 states, from Krause Group.)
- Maverik is No. 21 and Kum & Go is No. 22 on CSP’s 2023 Top 40 update to the 2022 Top 202 ranking of convenience store chains by store count. Watch for the full 2023 Top 202 in June.
The Kum & Go deal came about a month after KeHE opened a 1 million-square-foot, state-of-the-art distribution center—its largest to date—in Dallas.
A 124,000-square-foot expansion of KeHE’s DC in Aurora, Colorado, earmarked for new independent grocery clients, opened in August 2022. Also that month, KeHE extended its KeHE Connect Direct digital fulfillment network to include its distribution center in Chino, California, making the service available to West Coast retailers. The Chino facility joined three fulfillment centers supporting the Connect Direct service.
Earlier in 2022, KeHE added grocery retail cooperative Allegiance Retail Services as a primary distribution customer and expanded distribution of natural and specialty products with Publix Super Markets. And in December 2021, KeHE opened its 16th distribution center, a 500,000-square-foot facility in Goodyear, Arizona.
A version of this story first appeared in CSP sister publicationWinsight Grocery Business.
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