Karat Packaging adds leased distribution space in Chino

Karat Packaging leases additional Chino distribution space for paper products and logistics.

Additional California distribution space

Karat Packaging has signed a lease for a 187,000-square-foot warehouse and distribution centre in Chino, California, close to its headquarters. The company announced the agreement on Mar 4, 2025.

Chief executive Alan Yu expects the space to support approximately 500 additional paper-product stock-keeping units and expanded third-party logistics services. The company said the facility would nearly double its Chino distribution capabilities ahead of the summer peak season.

Karat distribution milestones — Warehouse leases and operating target

Annual business performance

Karat's 2024 net sales increased 4.2% to $422.6 million from $405.7 million. Volume growth and changes in product mix contributed $36.7 million, while increased online platform fees contributed $4.6 million and logistics and shipping revenue added $0.8 million. Unfavourable pricing comparisons offset $25.2 million of those increases.

Gross profit rose to $164.3 million from $153.0 million. The annual gross margin reached 38.9%, compared with 37.7%. Lower vendor pricing, currency movements and product mix supported margins, while freight and duties exerted pressure. Freight and duty costs increased $4.4 million despite a $3 million reduction in anti-dumping and countervailing duty charges.

Paper foodservice packaging — Paper containers and cups

Earlier Southwestern expansion

Karat announced a separate lease for a 44,000-square-foot distribution centre in Mesa, Arizona, on Feb 15, 2024. The company described it as its first Southwestern distribution centre outside California and expected it to be fully operational in the second quarter of 2024.

The Mesa plan included local delivery and customer collection options for Arizona and New Mexico. Karat also added five sales representatives covering the South, Midwest and Pacific Northwest. Yu expected the expanded distribution footprint and sales team to support additional national and regional restaurant-chain accounts.