Strack & Van Til says new distributor should mean lower-priced items, more organics

Krisanne Eckelbarger, of Chesterton, stocks shelves in the organic section of the Valparaiso Strack & Van Til store on Calumet Avenue. The grocery chain has reached a deal with Associated Wholesale Grocers as its new supplier.

John Luke, The Times

Joliet-based grocery cooperative Central Grocers wasn't just Strack & Van Til's owner. It was the wholesaler that stocked meat, produce and sundry items like Centrella black olives or honey roasted peanuts.

Now it's folding, collapsing under the weight of $225 million in debt and pressure from creditors who want to get paid. The generic Centrella brand will disappear along with it.

Strack & Van Til, which was saved from being assimilated into the much larger Jewel-Osco chain by the Jeff Strack-led Indiana Grocery Group, has turned to a new supplier that's expected to make it more competitive on price, selection and organic offerings.

Like many of the 400 independent grocers throughout Chicagoland that Central Grocers served, the Highland-based supermarket chain has struck a new deal with Associated Wholesale Grocers. Kansas City-based AWG is the second largest wholesaler in the country and five times bigger than Central Grocers with $10 billion a year in revenue, giving it far more leverage to negotiate good prices.

AWG offers the IGA, Best Choice, Clearly Organic, Always Save and Superior Selections generic brands.

"We will be migrating to AWG," said Strack, president and CEO. "We're very excited about having the backing of a much larger co-op. With that comes better services they can provide us to help us remain competitive, whether it's on a cost of goods nature, marketing and merchandising. They have an extensive array of private labels in different tiers from a low-end tier to a mainstream to a natural and organic. So we feel that our offerings will be much more impactful than what we used to have with the Centrella Brand."

A majority of the former Central Stores have migrated to AWG, which recently opened a massive warehouse in Kenosha, Wisconsin, and serves Chicago grocers like Angelo Caputo’s Fresh Markets and Treasure Island Foods, Strack said. The transition won't take place overnight, but eventually will help strengthen the remaining Strack & Van Til stores in an increasingly competitive marketplace.

Strack & Van Til also will be able to find more local suppliers of meat and produce.

"One of the things we're looking forward to, now that we're independently owned again, is more opportunity to take advantage of opportunities as they present themselves, whether it's produce from the market, or special deals from vendors and manufacturers," Strack said. "We're excited about that, and our customers will be the ultimate winners from that. That's what it takes today for the independents to survive against the big players: being nimble and flexible."

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Joseph S. Pete is a Lisagor Award-winning business reporter who covers steel, industry, unions, the ports, retail, banking and more. The Indiana University grad has been with The Times since 2013 and blogs about craft beer, culture and the military.