|
|
|
UNFI Sows Its Oats
United Natural Foods Inc. (NASDAQ: UNFI)
260 Lake Rd.
Dayville 06241
860-779-2800
Chief executive officer: Michael Funk
Revenues (FYE July 31, 2001): $1,016,834,000
Operating margin (FYE July 31, 2001, excluding restructuring costs): 3.40 percent
Market capitalization (July 25, 2002): $351.2 million
No. employees: 2,700
|
Business New Haven
8/5/2002
By: BNH
|
Parse the shelf at your nearest Stop 'n' Shop or Bread & Circus, and you're likely to find a product distributed by United Natural Foods Inc. (NASDAQ: UNFI) on display. The Dayville-based distributor of more than 30,000 natural and organic foods and related products serves more than 7,000 customers in 49 states, including conventional supermarkets, super natural chains (such as Whole Foods Markets Inc.) and independent natural products retailers. It is the largest publicly traded wholesale distributor to the natural and organic foods industry. In addition, through its subsidiary, the Natural Retail Group, it owns and operates 12 retail natural product stores in the Eastern U.S.
In spite of the sluggish economy, the natural products market continues to grow. Sales of natural products, which include aromatherapy candles, naturally based cosmetics and cleaning agents as well as yogurt, were up more than six percent in 2001 - this, compared to a jump of seven percent in the preceding year, and outpacing conventional supermarket sales, which remained basically flat in the second half of last year.
Industry experts attribute the growth to an aging population determined to maintain its health as well as the broadening demographics of the industry's customer base. No longer the exclusive province of highly-educated, high-income baby boomers, customers for organic products have driven deeper into socioeconomic measures.
(Wal-Mart, for instance, is rapidly becoming No. 1 in nationwide sales of gross organic products.)
United Natural Foods serves this burgeoning market by dividing its distribution operations into three principal units: United Natural Foods in the East, Mountain People's Warehouse Inc. and Rainbow Natural Foods Inc. in the West and Albert's Organics, which supplies produce and other perishables nationwide.
On a national level, according to Chief Executive Officer Michael
Funk, the company's principal competition is Tree of Life. In the West, Funk says the competition is Nature's Best; in the Midwest it is Blooming Prairie, and in the East, Northeast Cooperatives warehouse.
In June, United Natural Foods announced that it had failed to renegotiate a contract as the distributor for Wild Oats Markets, the Colorado-based natural grocer that, as the company's No. 2 account, had been responsible for 13.5 percent of United Natural Foods' total revenues in Q3 of 2001.
The unsuccessful negotiations renewed rumors that Wild Oats was priming itself for a takeover, but United Natural Foods' Funk says that his company will “pursue more profitable opportunities” for its shareholders.
These include the establishment of “a greater presence” in Texas and the Midwest.
“This is a decision that many CEOs have faced,” Funk tells BNH of UNFI's split from Wild Oats. “Do you retain business at any cost, or at certain times do you walk away? At times, you do have to walk away.”
The third quarter of 2002 (ended April 30) saw United Natural Foods announce the start-up of its new Southwestern distribution center in Southern California. The company expects that the new center, located in Fontana, Calif., will pare its transportation costs and increase its service.
Net sales for the third quarter of fiscal 2002 totaled $300.4 million, a 16.2-percent increase over sales reported in the third quarter of fiscal 2001. And fiscal year 2001 saw United Natural Foods set a record: For the first time in the company's history, sales passed the billion-dollar mark (total reported sales were $1,016,834,000). This represented a 12-percent increase in sales over fiscal year 2000. Its net income per share amounted to 72 cents.
From a 52-week low of $15.64, posted on September 21, 2001, the company's stock reached a 52-week high of $26.38 on May 10. On July 25 its stock closed at $18.38, and its market capitalization amounted to $351.2 million. In June, it announced earnings per share of 29 cents for Q3, excluding special items.
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
