Chapter 8
Finding the Missing Piece

Harbor’s successful onboarding of over 500 Subway and Taco Time NW locations stunned the foodservice industry. This achievement signaled Harbor’s readiness to compete with national broadline distributors and marked its emergence as a serious player in the foodservice sector.

In 2018, US Foods announced plans to acquire Food Services of America (FSA), a major foodservice distributor in the Northwest. The Federal Trade Commission (FTC), which had previously blocked a merger between US Foods and Sysco, scrutinized the deal for antitrust concerns.

• The FTC required US Foods to divest FSA’s Seattle operations to preserve regional competition.
• Harbor was identified by Distribution Market Advantage (DMA) as the ideal candidate to fill the gap left by FSA.

Harbor entered confidential negotiations with US Foods to acquire the FSA Seattle distribution center in Kent, Washington. Justin Erickson and CFO Jim Winkle led the effort. The team assembled a “dream team” of advisors, including board member Jamie Colbourne and investment banker Michael Barber. Due to confidentiality, Harbor couldn’t tour the facility and had to estimate its value from the outside.

In May 2019, Justin and Jim presented Harbor’s case to the FTC in Washington, D.C. Justin shared Harbor’s century-long story, emphasizing its family-owned values and commitment to independent businesses. The FTC was impressed by Harbor’s unique position and experience with Subway and Taco Time. Harbor’s proposal was approved, and the acquisition was finalized in October 2019.

Harbor acquired the 250,000-square-foot Kent distribution center and a significant portion of FSA’s Seattle business, serving 1,700 independent restaurants across ten counties. The deal was valued at $37 million, with the facility appraised at $55 million (and $75 million by 2023). Justin and his wife Alexis formed Priest Point Properties LLC to purchase the facility, with 40% of the ownership placed in a trust for their children.

The acquisition led to the creation of Harbor Foodservice, a new operating company focused on restaurant distribution. Harbor Foods was established as the parent company of Harbor Wholesale and Harbor Foodservice. The move allowed Harbor to serve both retail and foodservice customers with tailored strategies and infrastructure.