KeHE Distributors Acquires DPI Specialty Foods in California

KeHE Distributors, a distributor of fresh, natural, and specialty food products, based in Naperville, Illinois, has acquired DPI Specialty Foods, a distributor based in Ontario, California, on June 20, 2023. KeHE Distributors services North America while DPI Specialty Foods distributes in the western United States and Canada.

Transaction Summary

The Facts of the Acquisition

  • Target: DPI Specialty Foods is also a distributor of wholesale specialty, fresh, and organic food products, servicing the western United States and Canada through its three distribution centers in the United States.
  • Acquirer: KeHE Distributors is a distributor of fresh, natural, and specialty food products with 14 distribution centers in the United States, serving retailers on a national scale. It has an additional three distribution centers in Canada to cater to Canadian businesses. 

Our Take on the Acquisition

The acquisition will broaden KeHE’s customer base and add three new distribution centers to its existing 14. The combined business partners of the two companies would be over 31,000 customers and 6,100 suppliers. The combined warehouse space will be around 7 million square feet across North America. Overall, the acquisition enhances KeHE’s revenue sources and expands its product lines while remaining true to its existing product lines. 

The challenge will be integrating the two entities to operate as a single unit. The last acquisition undertaken by KeHE Distributors was in 2009 of Tree of Life, another distributor of specialty and fresh food operating in the United States and Canada. Lower margins in the food distribution sector mean increased efficiency will be the primary factor that will determine the success of the transaction. 

The Transaction

Date:June 20, 2023
Purpose: To expand the fresh food portfolio and broaden the customer base.
Acquirer’s Statement:Deb Conklin, president and CEO at KeHE – “Combining KeHE’s and DPI’s long histories of success and preeminent category expertise will enable retailers to respond more quickly to customer demand, offer additional supplier opportunities, and deliver enhanced consumer experiences. Both of our organizations share an obsession for our partners, a deep commitment to our people, a focus on serving others, and financial and operational performance. This transaction represents an opportunity to capitalize on the strengths of both organizations and become an even greater force for good.”

Target/Seller: DPI Specialty Foods

Company Information

Target:DPI Specialty Foods
Industry: Food and Beverage Distribution – specialty, fresh, and natural foods
Employees:832 (Self-published on LinkedIn)
ServicesSupplies more than 40,000 SKUs
Distribution – Sourcing food items from producers and selling to businesses and retail customers.
Logistics – Transportation of food items to retail and wholesale buyers.
Warehousing – Storage and handling of food items. Packing to meet order size.
Locations:Corporate Headquarters and Distribution Center #1: 601 S Rockefeller Avenue, Ontario, California, United States
Distribution Center #2: 8125 East 88th Avenue, Henderson, Colorado, United States
Distribution Center #3: 12360 S.W. Leveton Drive, Tualatin, Oregon, United States
John Bull Retail Store: 7 Minster Gates, York, United Kingdom

Financial Information

Revenue:USD $484 Million (Unconfirmed Source: RocketReach)
Revenue per Employee:USD $581,730 (Estimated based on self-reported number of employees and data from RocketReach)

Target/Seller Overview: DPI Specialty Foods

DPI has established an efficient network of wholesale specialty food distribution centers in key geographic locations across the western United States. DPI’s strength in grocery distribution, independent retail sales, and food service incorporates a product mix that includes gourmet, specialty, natural, organic, gluten-free, local, and ethnic foods. DPI warehouses and delivers frozen, refrigerated, and dry goods. 

DPI supplies over 40,000 SKUs comprising perishable and non-perishable food items from five continents. The team at DPI brings unique market niches and retail experiences to create exciting programs, tailored for each retailer’s needs.

This is achieved through a combination of a broad range of specialty foods and a highly focused service model. DPI continues to build an incredible network of national and international vendors that invest with DPI to ensure its consumers enjoy the benefit of exciting marketing programs.

DPI Specialty Foods is a distributor of fresh, organic, and specialty food products
DPI Specialty Foods’ fleet, which services customers in the western United States

Buyer/Acquirer: KeHE Distributors

Company Information

Buyer: KeHE Distributors
Industry: Food and Beverages – Distributor of specialty, fresh and natural foods
Type: Private, employee-owned, received one round of private equity funding
Founded: 1953
Employees: 6,800 (Self-published on company website)
Investors:TowerBrook Capital Partners: An investment management firm spun out of Soros Fund Management with assets under management of USD $13.7 billion. The investment was made in 2019. The total investment made by TowerBrook Capital Partners was not disclosed.
Services:Supplies more than 40,000 SKUs
Distribution – Sourcing food items from producers and selling to businesses and retail customers.
Logistics – Transportation of food items to retail and wholesale buyers.
Warehousing – Storage and handling of food items. Packing to meet order size.
Locations:Corporate Headquarters: 1245 E. Diehl Road, Suite 200, Naperville, Illinois, United States

Corporate Office: 1750 14th Street, Boulder, Colorado, United States

ArizonaDistribution Center #1: 17510 West Thomas Road, Goodyear, Arizona, United States

CaliforniaDistribution Center #2: 4650 Newcastle Road, Stockton, California, United States

Distribution Center #3: 6810 Bickmore Ave, Chino, California, United States

Distribution Center #4: 16081 Fern Ave, Chino, California, United States

ColoradoDistribution Center #5: 2200 N. Himalaya Road, Aurora, Colorado, United States

FloridaDistribution Center #6: 4055 Deerpark Blvd Elkton, Florida, United States

Distribution Center #7: 3225 Meridian Parkway, Fort Lauderdale, Florida, United States

GeorgiaDistribution Center #8: 1851 Riverside Parkway, Douglasville, Georgia, United States

IllinoisDistribution Center #9: 900 Schmidt Rd, Romeoville, Illinois, United States

IndianaDistribution Center #10: 8101 West States Rd, 46 Ellettsville, Indiana, United States

MarylandDistribution Center #11: 585 Principio Parkway W, North East, Maryland, United States

OregonDistribution Center #12: 9555 NE Alderwood Road, Portland, Oregon, United States

PennsylvaniaDistribution Center #13: 860 Nestle Way, Suite 250, Breinigsville, Pennsylvania, United States

TexasDistribution Center #14: 4450 Logistics Drive, Dallas, Texas, United States

CanadaDistribution Center #15: 2600 61 Avenue S.E., Calgary, Alberta, Canada

Distribution Center #16: 6185 Mclaughlin Rd., Mississauga, Ontario, Canada

Distribution Center #17: 19488 Telegraph Trail, Surrey, British Columbia, Canada

Financial Information

Revenue:USD $6.3 Billion (2022) (Source: Forbes)
Revenue per Employee:USD $926,470 (Estimated based on self-reported number of employees and data from Forbes)

Buyer/Acquirer Overview: KeHE Distributors

KeHE Distributors, LLC is a premier distributor of fresh, natural and organic, and specialty products to more than 30,000 natural food stores, chain and independent grocery stores, e-commerce retailers, and other specialty products retailers throughout North America.

With over 6,800 employees, KeHE, an employee-owned company, drives its mission – serving to make lives better – throughout all aspects of its operations. Through the KeHE Employee Stock Ownership Plan, the company provides company stock to employees as a benefit. KeHE has 17 distribution centers across North America and is one of the largest and most respected pure-play grocery and natural distributors in the nation.

As a proud Certified B Corporation, the company is held to the highest standard of social and environmental performance. Through this accountability and public transparency, it strives to have a positive impact on the planet and the communities it touches. B Corporation is a private certification of for-profit companies of their social and environmental performance. Other Certified B Corporations include Ben & Jerry’s, Coursera, and The Body Shop.

KeHE Distributor began with a mission: “We SERVE to make lives better”
KeHE Distributors’ distribution center in Dallas, Texas

Previous Acquisitions

Tree of Life (2009) – Distributor for specialty, natural, and fresh foods with operations in the United States and Canada. We researched the scale of Tree of Life’s operations (number of distribution centers, revenue, and headcount) at the time of the acquisition, but no information was available.

Would you like more information on this transaction?

If there is any additional category of information you would like to see us include on future acquisition announcements, please contact us.