KeHE CEO shares vision for a ‘fresh’ food future, igniting the M&A engine

By Ryan Daily

- Last updated on GMT

Image Credit: Getty Images - TommL
Image Credit: Getty Images - TommL

Related tags KeHE distribution network fresh food Cheese

KeHE will expand its play in fresh food and build a stronger relationship with Kroger, the distributor’s new president and CEO, Deb Conklin, said during a Naturally Chicago webinar this week.

“You have my personal commitment that on this multi-year journey, you're going to see a reinvigorated and differentiated KeHE ... because what got us here, won't necessarily get us to the next bastion of hope," Conklin said. "A lot of what we're going to be spending our time on is how we can be a better service ... the industry to do not only good work for all of us but also the communities that we live in.”

KeHE focuses on fresh food with DPI deal

Earlier this year, Conklin took the helm at KeHE​, replacing Brandon Barnholt, who still serves on the board of directors. Shortly after the executive change, KeHE acquired specialty food distributor DPI Specialties, which will enable the distributor to better address the fresh-food market.

“We had been talking about this as a board for four years before I joined as the CEO, so I was very aware of DPI, was very aware of what they could potentially do to expand our portfolio, and a lot of this is about selling our products to their customers and their products to our customers," Conklin explained.

Within the fresh food category, Conklin said KeHE plans to grow within the cheese segment, leveraging DPI's capabilties in the space. The two companies sold “about the same amount of cheese,” but DPI had a “differentiated” service with its cheese cutting and wrapping capabilities, she added.

“We sell north of a $1.5bn worth of fresh, but we don't act like a fresh company and so we've got a lot of work to do, and the investment in DPI will help us with that.”

What Kroger, Albertsons merger will mean for KeHE? 

KeHE also is facing a different retail landscape with the Albertson and Kroger merger.

“The Albertsons, Kroger deal neither hurts nor helps us. It doesn't really have anything to do with why we would do the [DPI] deal. It's more about our strategic plan to go deeper in a fresh and their penetration in cheese was important to that,” she said. “Obviously, Kroger is now a top 20 customer for ours and will continue to grow that, as we grow across the United States with them.”

Looking to the future, Conklin said she hasn’t ruled out the possibility of more mergers and acquisitions (M&A), which could include companies to reduce the cost of doing business.   

“I also believe that [M&A is] going to run the gamut. Not only will we continue to invest in distribution in different ways, like we did with DPI, we recently invested in a 3PL company to try to help be easier to do business with or for from our suppliers to get product to our DCS in a better way faster and less expensive. And so, we're going to continue to work our M&A engine, as we look to grow our scope.”

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