United Natural Foods, Inc. (UNFI) celebrated its 40-year anniversary in 2016. It also reported first quarter fiscal 2017 results in December with a net sales rise of 9.7 percent to US$2.28 billion compared to US$2.08 billion for the same period last year, boosted by four major acquisitions.
Adjusted net sales for the first quarter ended October 29, 2016, increased 12.9 percent, excluding the year-over-year impact of the previously disclosed termination of a customer distribution contract. Net income (or profit) for the first quarter of fiscal 2017 decreased 3.0 percent, to $29.2 million.
“We are pleased with the progress we have made on our strategic initiatives, including the ongoing integration of our recent acquisitions and the sales reorganization, which was completed at the start of our first quarter,” said Steven L. Spinner, UNFI’s President, and CEO.
“We believe these initiatives will enable us to continue to execute our strategy of building a national fresh distribution platform and capitalize on growth opportunities with new and existing customers in an operating environment that remains challenging due to deflationary pressures and competition.”
The acquisitions of Haddon House Food Products, Inc., Global Organic/Specialty Source, Inc., Nor-Cal Produce, Inc. and Gourmet Guru, Inc., impacted net sales positively, UNFI said.
The increase in gross margin of 20 basis points to 15.32 percent was due to the favorable impact of acquisitions completed in the past 12 months. Despite the year-over-year improvement, first quarter fiscal 2017 gross margin continued to face headwinds from moderated supplier promotional activity, competitive pricing
UNFI’s non-adjusted net sales for fiscal 2016 ended July 30 increased 3.5 percent to $8.47 billion.
The (August 2016) acquisition of Gourmet Guru has enhanced UNFI’s strength in finding and cultivating emerging fresh and organic brands and further expands UNFI’s presence in key urban markets. "Gourmet Guru had $50 million in net sales for the twelve months ended June 30, 2016,” UNFI said.
Sales lifted by acquisitions
Reaching its 40-year anniversary in 2016, the team at United Natural Foods looked back on a journey that has brought the company from one truck in 1976 to over 1,000 and annual revenues approaching $9 billion.
"We are extraordinarily proud of the accomplishments and contributions we have made over the past 40 years, and of the many associates that have made them possible," Steven L. Spinner, UNFI’s President, and CEO said in December.
"Every day, we are moving food forward and discovering what’s next, delivering new choices that shape the foodscape. At our core, we are pioneers, and we will continue to be courageous and future-focused for the next 40 years, energizing tomorrow and guiding a healthier road ahead.
"In fiscal 2016 we made great strides in our core strategy of building out the store. We took decisive steps to grow our fresh and specialty product offering through the acquisition of four exciting and uniquely positioned companies.
"We acquired Haddon House, Global Organic and Nor-Cal Produce during fiscal 2016 and Gourmet Guru in early fiscal 2017. Each helped us strengthen our foundation. UNFI is now positioned as a large national distributor of fresh produce, proteins, bakery, deli, specialty and 'better for you' products in the United States and Canada".
Haddon House, the largest acquisition of the fiscal year was founded in 1960 by the Anderson family and is a well- respected distributor and merchandiser of specialty, gourmet, and ethnic products. UNFI said it gained from seeing how they managed their full-service merchandising business and picked up several warehouses in strategic locations and a new customer channel of gourmet and specialty retailers, many of multiple locations.
UNFI carries and distributes more than 100,000 products to more than 43,000 customer locations throughout the US and Canada. UNFI, which owns distributor Albert's Organics, serves a wide variety of sales channels including conventional supermarket chains, natural product superstores, independent retailers, e-Commerce and food service. Other company acquisitions include custom dried fruits and nuts snacks manufacturer Woodstock Farms Manufacturing, Select Nutrition, Earth Origins, Blue Marble Brands, Honest Green e-Solutions, and Tony’s Fine Foods.