Western Family Foods deal about 'economies of scale'
Once the deal is completed in the next few months, Western Family will close its corporate office and lay off its entire 58-person workforce.
Western Family is a private-label buying and marketing company that distributes grocery items under its brands to a network of retailer-owned grocery wholesalers. It ranked fifth last year on the Business Journal's list of largest private companies, with $750 million in 2014 revenue, the most recent data available.
Topco, based in the Chicago suburbs, does essentially the same thing, only on a much larger scale. It describes itself as a $15 billion privately-held company, whose members include some of the biggest independent grocery retailers in the country, such as Pittsburgh-based Giant Eagle Inc.; Wegman's of Rochester, N.Y.; and Grand Rapids, Mich.-based Meijer Inc.
In a statement released to its wholesale customers last week, Western Family said Topco would provide economies of scale by consolidating the purchasing of Western Family's products with that of Topco's other members. In a separate statement issued Monday, the company said Topco could continue to carry the same products.
"This move is seen as a benefit to both independent retailers and consumers as it will help grow our brands which have been in existence for over 50 years and help independent retailers remain competitive by utilizing Topco’s large economies of scale," the company said.
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