Key Food Stores Co-op, the Matawan, NJ-based independent retailer co-operative, announced that it has signed a new 10-year supply agreement with UNFI to service its 318 stores, most of which are located in the metro New York market.

The estimated $10 billion deal becomes effective in late 2021 following the expiration of Key’s current contract with C&S Wholesale Grocers, and the opening of a new UNFI distribution center in Allentown, PA.

The switch in wholesalers surprised few in the trade, especially since Key Food CEO Dean Janeway and COO George Knobloch openly implored C&S to improve their level of service to the co-op’s member stores at Key’s 2019 vendor meeting which was attended by more than 700 suppliers, brokers and distributors.

“We certainly appreciate the efforts of C&S,” said Janeway, whose company’s stores have been supplied by the Keene, NH-based distributor for the past 20 years. “However, as we’ve publicly stated before, having our stores serviced from three separate distribution centers was not an efficient system for our members. With UNFI’s commitment to building a brand new facility, all segments of our business will become housed under one roof and provide great efficiency to our members. Additionally, I feel strongly that moving to UNFI will benefit our Florida members (UNFI has DCs in Ocala, Pompano Beach and Quincy, FL – all part of the 2018 Supervalu acquisition) where we will gain more flexibility in a market that we have targeted for growth.”

The new 1.3 million square foot UNFI distribution center in Allentown (Lehigh County) is currently under construction and is expected to open in the fall of 2021. It will serve UNFI’s existing and new customers in the greater Northeast and surrounding areas, including Key Food. UNFI also anticipates the new distribution center will create more than 500 local jobs. UNFI’s primary DC serving clients in the metro New York, Delaware Valley and Central PA areas is based in Harrisburg, PA.

In its role as primary grocery wholesaler, UNFI will supply Key Food stores with conventional, natural and organic grocery products, along with a wide variety of international items. All categories such as protein, produce, frozen bakery, deli, general merchandise/health and beauty, as well as Key Food’s Urban Meadow private brand and UNFI-owned brands such as Essential Everyday and Woodstock, will also be supplied.