While low employee turnover and careful expansion have contributed to Gelson’s Markets BB #:113119 success—innovation, experimentation, and execution have been crucial to the company’s position as one of the nation’s top independent grocers.
In the mid-1960s, Gelson’s became part of Arden Group, which shared Gelson’s philosophy of quality and service.
Ron Fong, president and CEO of the California Grocers Association, based in Sacramento, CA, says that private equity firms invest in California-based grocery chains because of the potential for profit.
“It’s worked well because the investment firms keep on the companies’ management or hire professional staff with track records in the industry.”
It’s no surprise then, that over the years, Gelson’s has attracted the attention of private equity firms seeking a solid investment.
Mid-2014 saw Gelson’s acquisition by TPG (formerly known as Texas Pacific Group), the global private investment company founded in Ft. Worth, TX with offices in San Francisco and around the world.
In 2021, Gelson’s was acquired by Tokyo-based Pan Pacific International Holdings Corporation, which owns and operates nearly three dozen retail and service-related businesses globally, including a grocery store in Hawaii.
“The relationship with Pan Pacific is still in the honeymoon phase, and so far, it’s been a very positive experience,” says Paul Kneeland, senior director of produce and floral at Gelson’s. “They give us input and ask us for input. I look forward to future collaboration.”
“The acquisition doesn’t seem to have compromised any of Gelson’s core values or advantages,” says retail consultant Carol Spieckerman, president of Spieckerman Retail in Bentonville, AR.
“The company’s CEO and long-term employees will help to ensure that Gelson’s culture carries forward even as it brings in a slate of experienced leaders from diverse retail backgrounds.
“Gelson’s encourages its employees to build careers with the company, and its buyers are true experts in specific categories,” she adds. “Gelson’s loyalty to its suppliers pays off with first-choice quality and access to unique items.”
Local Focus
In 2019 Gelson’s implemented its Local Discoveries program, which encourages companies within 50 miles of a Gelson’s store to pitch new and promising products.
As a result, Gelson’s is the top retailer offering locally sourced and manufactured products. As of 2021, this represented over 1,500 products ranging from almond and oat milk creamers and fresh salsa to kombucha.
“We support small, local growers,” Kneeland explains. “We don’t generally have long-term contracts.
“We try to purchase from quality California farmers such as Harry’s Berries in Oxnard, Ojai Pixie Tangerines, Del Rey Avocados in San Diego County, and Cuyama Orchards’ heirloom apples from Northern Ventura County.
“Although we don’t import directly, we partner with brokers, growers, and shippers when we need to fill in with product from Mexico, Peru, or Australia,” Kneeland says.
This an excerpt from the California Supplement to the May/June 2022 issue of Produce Blueprints Magazine. Click here to read the whole supplement.
