MILITARY SERVICE

MINNEAPOLIS -- Nash Finch here said it committed to growing its military-supply business and making it more efficient.f its operations, its wholesale supply division, it still hopes to drive additional business through its second-largest division, which supplies groceries to more than 100 military commissaries in the U.S. and overseas.Although the military-supply business operates on a different revenue

MINNEAPOLIS -- Nash Finch here said it committed to growing its military-supply business and making it more efficient.

f its operations, its wholesale supply division, it still hopes to drive additional business through its second-largest division, which supplies groceries to more than 100 military commissaries in the U.S. and overseas.

Although the military-supply business operates on a different revenue model -- suppliers pay Nash Finch to have their products delivered to the commissaries -- and it offers few synergies with Nash Finch's other operations, the company has a long history of involvement with the Defense Commissary Agency (DeCA) and plans to leverage those ties to retain the business.

"Our military system set is uniquely designed for DeCA," said Jeffrey E. Poore, senior vice president, military, Nash Finch. "We have resources that are dedicated solely to the military, and we have people who have been dealing with those customers for 20 years."

He said the company is seeking to make the business more efficient with improvements in technology, such as the planned rollout of voice-based warehouse technology from Pittsburgh-based Vocollect. The company already has technology in its warehouses that allows it to deliver real-time data to its vendors, he said.

In addition, the company seeks to help DeCA in making its operations more efficient as the agency seeks to offer its customers a discount of 30% on what they would spend in a supermarket.

"We're very focused on DeCA in their business as well, helping them make their business more efficient and helping them manage their supply and promotions," he said.

The company delivers up to 20 times per week to some commissaries, he said, as they generate enormous volume. At least one of the commissaries does about $65 million in sales per year.

He said growth in the military business could come from expansion into other military venues such as exchanges and other nontraditional outlets.

Sales in the military division have increased steadily in the past few years and have taken up a larger percentage of overall revenues at the company. In 2003 military sales accounted for nearly $1.1 billion in sales, or 27.5% of the company's volume.

"Military is a tremendous opportunity for us to grow," said Ron Marshall, chief executive officer, Nash Finch. "We own the last mile, and in some cases we own that 20 times per week."