Supervalu and The Fresh Market said Monday they have reached a long-term supply agreement for Supervalu to serve as a grocery wholesaler and distributor to the Greensboro, N.C.-based specialty food retailer.
The deal calls for Supervalu to supply Fresh Market with traditional and signature grocery products across a range of categories including meat, deli, bakery, grocery, frozen foods and dairy. Supervalu will become the chain's primary wholesaler when Fresh Market's existing supply contracts expire, and anticipates to begin supplying some stores later this year.
Fresh Market did nearly $1.9 billion in retail sales for the fiscal year ended Jan. 31, making it the 57th largest U.S. food retailer, according to SN's Top 75.
The announcement marks another new account win for Supervalu, which is aggressively refashioning its business behind wholesaling as it prepares to spin off or sell its Save-A-Lot retail stores division. Supervalu would succeed Burris Logistics, which has served as primary logistics provider for The Fresh Market since 2007 and supplied approximately 58% of the merchandise it bought during 2015. According to regulatory filings, The Fresh Market's agreement with Milford, Del.-based Burris extends to August 2017 for one distribution center that serves its stores and to February 2018 for the remaining facility.
Supervalu earlier this year said it would take over distribution for Marsh Supermarkets, replacing rival C&S Wholesale Grocers.
Fresh Market officials said the deal would allow for more competitive pricing as it restructures its offering under private ownership. It was sold to Apollo Global Capital earlier this year.
“We are excited about this relationship with Supervalu,” Rick Anicetti, Fresh Market's president and CEO, said. “Supervalu's experience in wholesale grocery and logistics capabilities aligns well with our strategic vision and will make them a valuable strategic partner for our future. This new relationship will be highly beneficial in enhancing our customer experience, with a focus on providing superior quality and freshness at a greater value.”
“The Fresh Market is a terrific organization with a tremendous store base and a great consumer offering,” Supervalu president and CEO Mark Gross added. “The stores offer a great shopping experience. They are extremely well merchandised, meet customer demand with a keen focus on fresh, and provide a wonderful mix of traditional and specialty products. This is an excellent example of how our experience, strong distribution network and overall wholesale capabilities can serve larger grocery chains while also being flexible to the needs of specialty-focused retailers.”