Kroger continued its plan to prioritize its core supermarket business and its new technology initiatives when it announced late last month that it had sold its Turkey Hill Dairy business to Peak Rock Capital, a mid-market private equity firm based in Austin, TX.
Twelve months earlier, the Cincinnati, OH-based merchant – the largest U.S. pure-play supermarket retailer with annual sales of $121 billion – unloaded its 784 store convenience division (which included such banners as Turkey Hill, Loaf ‘N Jug, Kwik Shop, Tom Thumb and Quik Stop) for $2.15 billion to British c-store and petroleum firm, EG Group.
While no price was announced for the Turkey Hill Dairy deal, the new owners said it would continue to operate the large dairy and headquarters in Conestoga, PA and retain the approximately 800 full-time, part-time and seasonal associates currently employed by Turkey Hill.
“We believe this is the right step to ensure the Turkey Hill business can meet its full potential and continue to grow its successful ice cream and beverage brands,” said Erin Sharp, group VP for Kroger Manufacturing. “Throughout this process, we were extremely impressed with Peak Rock’s professionalism and vision for the future of the Turkey Hill business. We look forward to working with them to ensure a smooth and successful transition for all parties.”
“Turkey Hill represents an exciting opportunity to invest in a premier brand with an established reputation for quality, flavor variety, and authenticity, within the large and growing ice cream and refrigerated drinks space. We are impressed with the accomplishments of the business under the stewardship of Kroger and look forward to completing a seamless transition of the business to a standalone entity and partnering with Turkey Hill’s management team to drive significant growth through continued product innovation,” said Robert Pistilli, managing director of Peak Rock Capital.
Anthony DiSimone, CEO of Peak Rock Capital, added, “We believe that Turkey Hill represents an excellent platform for growth through near-term organic initiatives and strategic acquisitions. We will be aggressively pursuing complementary acquisitions to extend the product and brand portfolio.”
Closing is expected during Kroger’s first quarter (which ends on May 25) and the after-tax proceeds will be used to reduce debt.
In December 2018, Kroger also sold its digital coupon and rebate publishing division, YouTech, to Inmar, the Winston-Salem, NC-based technology and analytics firm which will gain a long-term services agreement with the retailer. Kroger acquired YouTech in 2014.
In late 2017, Kroger said it would explore potential sales options for its non-core businesses and would also look to expand its digital and e-commerce operations under a new initiative called Restock Kroger. While it has now sold three businesses within a year, it has also signed an exclusive agreement with British online distributor Ocado (it is currently building three of what may be as many as 20 online warehouses in the U.S.) and also expanded its Home Chef Express meal kit program to its nearly 2,800 supermarkets which currently operate in 30 states.