In a move highlighting the urgency to diversify its assortment and offer more fresh foods to its customers, distributor United Natural Foods, Inc. on Monday said it has acquired certain assets of Global Organics/Specialty Source, a Florida-based fresh-foods distributor.
UNFI said Global Organics would be integrated into its Alberts Organics division in the Southeast. The company, a leading distributor of organic fruits, vegetables, juices, milk, eggs, nuts, and coffee, primarily in Florida, operates out of a facility adjacent to UNFI's Sarasota, Fla., warehouse.
Providence, R.I.-based UNFI a week ago announced plans to acquire Haddon House Food products, a New Jersey-based specialty food distributor. CEO Steven Spinner said the acquisition of Global "significantly moves our timing of fresh in Florida forward," with plans to deploy such offerings to its retail customers there within the next quarter. He said the deal "we hope, is one of many to come in this particular space.
"There are many companies around the country that have a very similar profile to Global," he added. "Great product, high-touch, fresh perimeter, in the right markets for us. They're not ... overly material to our overall numbers, but very material in a particular market in terms of getting us into fresh faster."
Terms were not disclosed.
"The acquisition highlights UNFI's sense of urgency to diversify its revenue stream as non-perishables become increasingly more commoditized," Karen Short, an analyst at Deutsche Bank, said in a research note Tuesday. "While we applaud the sense of urgency, we remain cautious on UNFI because an accelerated acquisition strategy can sometimes result in integration risk, and in UNFI’s case, will lead to lower [returns] in the near-term."
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