Heritage Grocers Group, the parent company to Cardenas Markets that is owned by Apollo Global Management, has acquired El Rancho Supermercado, the Hispanic grocery chain with 28 stores in Texas and Kansas.
Terms of the deal were not disclosed.
The acquisition means that Heritage, which operates as an ethnic specialty grocery company, will have a total of 113 stores, including 57 under the Cardenas banner, 21 under the Tony’s Fresh Market banner, and seven as Los Altos Ranch Market. Apollo created the Heritage business unit in 2022 after acquiring Cardenas. El Rancho will continue to operate out of its Texas headquarters.
In a letter to vendors, Eric Stover, CEO of Cardenas Markets (and now the CEO of El Rancho), wrote, “El Rancho Supermercado will continue to operate under its own banner within Heritage, and its employees will be warmly welcomed into the Heritage Grocers Group family. The team at El Rancho Supermercado has built a strong brand and long-standing relationship with its customers, and by leveraging our collective strengths, El Rancho Supermercado can deliver even greater value to its loyal customers across Texas and Kansas … As we work hand-in-hand through the details of integration and identify synergies that enhance the overall customer shopping experience for our respective customers, rest assured we will also work together to identify opportunities that may grow and strengthen this partnership."
- KC's View:
Doug Sanders, who is the chairman and CEO of Heritage, seems to be working with Apollo to assemble an impressive collection of ethnic supermarkets, which is a savvy thing to do at this moment in time. (Also part of this equation is Scott Moses of Solomon Partners, who represented El Ranch Supermercado in this deal.)
The US Census Bureau points out that the Hispanic population of the US has increased more than 80 percent since 2000, and now is more than 63 million. In addition, Texas Tribune reported this week that Texas' Hispanic residents now make up the largest percentage of the state's population - 40.2 percent, compared to non-Hispanic white Texans, who represent about 39.8 percent of the state's population.
Axios points out that this is just one reflection of America's changing face: "the electorate, the customers, the influencers, the decision-makers, the workforce, the workers you'll be trying to recruit in the future." Apollo, Heritage and Sanders (who, let's not forget, ran Sprouts for so many years), seem to have their fingers on the pulse of this important and persistent demographic shift.
I suspect we'll see more of these kinds of deal going forward, as Apollo/Heritage look to assemble an ethnic retail juggernaut that will give independent retailers new life and fresh competitive viability.