Central to Absorb Certified

JON SPRINGER

FRANKLIN PARK, Ill. — The boards of Chicago area cooperatives Central Grocers and Certified Grocers Midwest last week agreed to merge the companies, officials said.

Under terms of the agreement, which requires approval from member-owners, Certified members will transition their business to Central here, which would be the surviving entity under the leadership of Jim Denges, chief executive officer of Central.

The move provides a new solution for Certified, weakened from the departure of its largest member, Butera Foods, to Fresh Brands, a Wisconsin-based retailer-wholesaler. Certified's members include Chicago-based independent chains Treasure Island, Fairplay Foods and Tony's Finer Foods.

Paul Butera, who controls Butera Foods and also served as chairman of Certified, purchased Fresh Brands from Certified last year and subsequently moved Butera's volume to that company. Butera told SN earlier this year that Certified was seeking a smaller warehouse or a new partnership to continue its business. It recently agreed to sell its Hodgkins, Ill., warehouse and headquarters.

The volume of the two wholesalers will be consolidated in a new 920,000-square-foot distribution facility in Joliet, Ill., set to open early next year, said Denges. The combined organization will have sales of about $1.93 billion, serving 225 members operating some 450 stores in Illinois, Indiana, Iowa and Wisconsin. Certified members would gain access to Central's Centrella private brand.

“The combined volume would make us a very powerful cooperative,” Denges said. “It will result in financial savings, purchasing power will be much greater, and the delivery service will be better because today we drive right by their [Certified] stores.”

Central has annual sales of about $1.4 billion, including volume from its Strack & Van Til chain.

Certified members would not be required to join Central's co-op, although Central last week had received commitments from all of Certified's board members. Denges said he plans to meet with other members this week.