Kehe to buy Tree of Life

Up-and-coming beverage companies in the natural scene will soon have one fewer distributor to choose from.

Netherlands-based Royal Wessanen nv agreed to sell Tree of Life’s North American business to Illinois-based Kehe Food Distributors Inc. for $190 million. The deal will allow Royal Wessanen to reduce its debt and focus on its European business, the company told Supermarket News. It will also consolidate distribution opportunities for food and beverage companies aiming at the U.S. natural foods channel.

Many of the beverage industry’s recent giants and rising stars began by staking their territory in the natural foods channel. Tea brands Honest, Sweet Leaf, Steaz and Guayaki all owe some of their success to their presence in Whole Foods, and coconut waters earned early adopters through natural foods retailers.

The consolidation of Tree of Life into Kehe could raise the stakes for new brands, which will now have fewer options for national natural channel distribution. Those that secure distribution with Kehe, though, could be in a better position than in the past.

Greg Leonard, senior vice president of natural food sales for Kehe, told The Gourmet Retailer that the company wants to significantly grow its business in natural food stores in the coming years. The deal will also extend Kehe’s reach to Canada.