Around 1920, A.C. Kelly took over Merchants Produce Company of Hickory, a wholesale fruit and produce company. In 1931, Moses George, a Shelby, North Carolina grocer, bought Merchants Produce for $17,000 and began running it with his sons Alex and G.L. George. Merchants Produce took advantage of the trend away from "mom-and-pop" grocery stores, as chain stores became common. In 1938 the name changed to Merchants Produce and Grocery as the company became an important distributor of merchandise to the independent stores in North and South Carolina. After Moses George died in 1947, his sons Alex and Lee took over the business, along with daughter Josephine. The name changed to Merchants Distributors Inc. or MDI in 1956. By 1960, MDI had over 130 employees and supplied 400 grocery stores within 150 miles. Alex George was president, and the company added a $1 million, four-acre facility on Twelfth Street. In 1965, MDI began selling to schools and eventually merged its MDI Foodservice with James Wholesale Company, also in Hickory, forming Institution Food House, with Lee George as president. Norman James was vice president; after his death, the Lee brothers bought his share of the company and made IFH a subsidiary of MDI. Lee George retired in 1980 but remained chairman. In 1984, MDI bought the Lowes Foods chain of supermarkets. In 1992 MDI, IFH and Lowes Foods became part of a new holding companyAlex Lee Inc., named for Alex and Lee George. MDI president Boyd Lee George, grandson of the founder, became chairman and president, remaining as chairman of MDI. In 1993, MDI became a distribution center for Independent Grocers Alliance. In addition to providing the IGA stores with low-priced merchandise, this arrangement allowed IGA to take advantage of the advertising and merchandising skills of MDI. Also in 1995, MDI announced plans for a $60 million plant in Caldwell County. The company received $5.5 million in economic incentives from Caldwell County and Hickory, with plans for Hickory to annex the site and turn part of it into an industrial park. This arrangement created controversy because the North Carolina Supreme Court had not yet ruled on whether such economic incentives to keep businesses were constitutional. Two years later, the distribution center was complete, though neighbors complained about the noise, and a few people claimed construction damaged their nearby homes. IFH took over the former MDI location. MDI also supplies Galaxy Food Centers, founded in 1979, with 100 stores in 7 states. Alex Lee Inc. announced October 28, 2019 that it had completed its purchase of Scranton, South Carolina-based W. Lee Flowers & Co., a wholesale distributor which supplies 75 IGA and KJ stores, 50 of which the company owned.
