Steven L. Spinner is ready to build. The president and CEO of wholesaler United Natural Foods Inc. has his sights set on both new acquisitions and distribution centers.
“On the M&A front, we continue to look for attractive acquisitions. The expanding product offerings and geography are important to our growth strategy looking out over the next five years,” Spinner said at an earnings call earlier this month.
He added that recent acquisitions — including Pacific Organics Produce that was acquired this winter, B.K. Sethi in late 2011 and Disley in July 2012 — are progressing as planned. Last fall, UNFI also acquired B2B distributor Green Irene.
As reported earlier by SN, Chief Financial Officer Mark Shamber said UNFI wants to double its Canadian business with organic growth and acquisitions.
UNFI has been updating and adding to its distribution centers. Spinner said three DCs per year will be moving to a new management warehouse system, starting in Auburn, Wash.
The Albert’s Organic division of UNFI opened a new 70,000-square-foot warehouse in Logan Township, N.J., this spring, and announced plans to replace three small facilities with a LEED-certified, 540,000-square-foot warehouse in Denver this summer. In the next two years, UNFI plans to build additional warehouses in Wisconsin, Northern California and the Hudson Valley in New York.
“These new facilities will create capacity for growth and keep us very close to the retailers, which allow us to meet the high level of service and quality that is critical for our business, while continuing to drive out cost,” Spinner said.
UNFI has also begun rolling out an inventory optimization platform. Spinner said that 60% of West Coast suppliers have started using this new inventory system.
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UNFI sees the GMO debate gaining traction.
Spinner said he thinks consumer interest in GMO labeling, as documented by recent research, will lead to government intervention in mandating GMO ingredient labeling in the future.
Whole Foods’ decision to phase out products using GMO ingredients and Connecticut passing a conditional labeling mandate, suggest GMO labeling will continue to be a hot topic. UNFI has been an advocate of the labeling movement.
“UNFI believes the cultivation of GMOs and their presence in our food supply poses a threat to human and animal health and to the environment and is fundamentally contrary to our vision of a sustainable future,” the company wrote in a statement last fall supporting ballot initiatives that would enforce labeling.
UNFI’s Blue Marble division is dedicated to products that are certified GMO-free.
Spinner sees a bright future for organic and natural products, which have experienced consistent growth.
Organic fresh produce and natural antibiotic-free proteins lead UNFI’s category growth, with double-digit sales growth, according to Spinner.
The company’s net income overall was 14.5% for the first nine months of the fiscal year.
A two-month Teamsters strike in Auburn this winter cost the company $1.5 million for the quarter. The union and the company agreed on a new five-year contract in February.
“We appreciate the hard work and diligence of negotiating teams and mediator in reaching a fair and equitable agreement and now look to move forwards as a company,” Sean Griffin, UNFI group president, said in a February release.
UNFI’s customer channels have been shifting. “Supernaturals” are up to 36.6% of the business from 35.7% compared with the third quarter last year, supermarkets are up to 24.3% from 24.2%, and independents are down to 33.7% from 35.1%, Spinner said.
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