Sysco to supply Kroger prepared foods

Kroger is turning to Sysco to provide foodservice items like sandwiches and salads for the retailer’s in-store delis and commissaries, Sysco announced at its investor day last month.

“We created a partnership where we could bring them a true foodservice product offering, so we can create an environment where they can be successful with foodservice products and differentiate themselves in their marketplace,” said Thomas Bene, EVP and president — foodservice operations at Sysco.

Sysco has started to roll out the program to Kroger’s more than 2,800 stores, Bene said. The partnership is expected to continue over the next couple of years.

The new arrangement will help Kroger cut back on shrink, product costs and labor, Andrew Wolf, an analyst for BB&T Capital Markets, said in a research note Friday.

Wolf noted that Kroger’s current approach of using retail food solutions is “less efficient and productive for Kroger’s growing foodservice offerings.”

Supermarket foodservice is a $27 billion market that is expected to grow 4.2% over the next five years, Deutsche Bank said in a research note on Sysco.

Note: This story has been updated to correct Thomas Bene's statement.