Kroger boosts direct sourcing to cut costs and improve supply visibility

Kroger is accelerating its efforts to source products directly from producers, aiming to increase first-party procurement volumes to over 10%, according to Supply Chain Dive.

The grocery chain is working toward a fully owned import and distribution model, building up logistics, sourcing, workforce, and payment capabilities to reduce intermediaries in the supply chain.

Kroger has already sourced about 40% of its fruit for the November 2026 season directly from growers in Peru, bypassing third parties to lower costs and strengthen supply access.

Besides grapes, Kroger is expanding direct sourcing to other products such as citrus, shrimp, and frozen vegetables, while leveraging better data to improve buyer understanding of volume, demand, and supplier performance.

The company is also collaborating closely with suppliers to maintain prices and plans to reduce its inventory assortment to between 6,000 and 6,500 SKUs as part of its strategy.

Kroger's focus is now on scaling successful sourcing practices and embedding these approaches more broadly into its procurement processes.