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UNFI Produce Implements New Technologies and Processes; Expands Private Label Options
Rhea-AI Impact
(Neutral)
Rhea-AI Sentiment
(Very Positive)
Tags
Rhea-AI Summary
United Natural Foods, Inc. (NYSE: UNFI) has announced enhancements in its produce sourcing model, utilizing new technologies to shorten delivery times by over a day. This initiative aims to provide fresher produce to customers, resulting in sales growth that outpaces industry trends amid inflationary pressures. The company has streamlined procurement by consolidating purchasing and sourcing directly from major Mexican suppliers, improving inventory turnover and reducing shrink. Additionally, UNFI is expanding its Wild Harvest organic produce brand, which has seen strong performance.
Positive
Shortened delivery times by over a day through improved sourcing and technology.
Sales growth in produce outpacing the industry, even amid inflation.
Successful launch of Wild Harvest organic bananas, with plans for further expansion.
Negative
None.
Technologies, talent, and an updated produce sourcing model have enabled the Company to deliverfresher produce to its customers
PROVIDENCE, R.I.--(BUSINESS WIRE)--
Consistent with its commitment to deliver the highest quality produce, United Natural Foods, Inc. (NYSE: UNFI) (the “Company” or “UNFI”) today announced it has implemented new technologies and processes to enable the Company to shorten certain delivery times by over a day and harness the full potential of UNFI data points to deliver fresher produce to its customers. These efforts have proven successful as UNFI has grown its produce sales ahead of industry growth even as retail produce industry numbers move with inflation.
UNFI is leveraging its deep expertise to provide a broad catalog of organic produce in an easily recognized and trusted brand, Wild Harvest. Wild Harvest produce is already available in hundreds of retailers across the country and the newly launched Wild Harvest organic bananas have performed well, with dozens of additional key items will be introduced throughout the remainder of 2022. The bold purple branding makes it easier for both shoppers and store associates to recognize which products are organic, while offering the trust of the Wild Harvest label. (Photo: Business Wire)
Removing Over a Day from the Supply Chain
To help UNFI deliver the freshest product to its customers, the Company redesigned its produce sourcing strategy by consolidating its purchasing efforts and procuring many items directly from major Mexican suppliers. Product is then transported from those farms directly to UNFI distribution centers via a McAllen, TX cross docking facility, a produce best-in-class practice. UNFI has also implemented commodity specific thresholds to accelerate the movement of product through its distribution centers and to retailers. The new sourcing model and supply chain processes have improved inventory turnover, reduced inventory shrink, and most importantly, has allowed UNFI to remove an average of over a day from its supply chain during the past year.
“We know quality is the number one driver for produce purchases, which is why we are fanatical about freshness at UNFI Produce,” said Dorn Wenninger, Senior Vice President of Produce at UNFI. “In line with UNFI’s overall strategy to harness technology and data to serve our customers better, these initiatives allow us to remove over a day from our supply chain and provide a fresher product to our customers and their shoppers. Our team is already seeing the positive results of our efforts to deliver the freshest produce to our customers and I’m looking forward to continuing to evolve UNFI as a best-in-class produce organization.”
Using Data to Create a Culture of Quality
UNFI recently implemented Share-ify, a real-time, cloud-based, tablet-enabled quality control program, which allows the Company to synthesize tens of thousands of data points to remove variability and help ensure its growers and suppliers are providing the freshest produce possible. The technology is currently in use at half of UNFI’s produce distribution centers and will roll out to the remainder by this September. To help manage the rollout, UNFI recently recruited industry veteran Susan Akin to serve as Director of Quality Assurance, overseeing quality control programs.
“The power of the data we now have in our hands is immense,” says Wenninger. “Our new technology updates provide greater transparency in our supply chain, better protecting our customers and helping us to provide them with the freshest, highest-quality produce available. But we’re not just investing in technology. With the addition of Susan and several other leaders to the team, we’re assuring that we have the expertise, focus, and leadership to excel in unleashing the power of data for our customers.”
Wild Harvest Expansion
UNFI is also leveraging its deep expertise to provide a broad catalog of organic produce in an easily recognized and trusted brand, Wild Harvest. The bold purple branding makes it easier for both shoppers and store associates to recognize which products are organic, while offering the trust of the Wild Harvest label. The newly launched Wild Harvest organic bananas have performed well, and dozens of additional key items will be introduced throughout the remainder of 2022. Wild Harvest produce is already available in hundreds of retailers across the country.
UNFI is North America's premier grocery wholesaler delivering the widest variety of fresh, branded, and owned brand products to more than 30,000 locations throughout North America, including natural product superstores, independent retailers, conventional supermarket chains, ecommerce providers, and food service customers. UNFI also provides a broad range of value-added services and segmented marketing expertise, including proprietary technology, data, market insights, and shelf management to help customers and suppliers build their businesses and brands. As the largest full-service grocery partner in North America, UNFI is committed to building a food system that is better for all and is uniquely positioned to deliver great food, more choices, and fresh thinking to customers. To learn more about how UNFI is Fueling the Future of Food, visit www.unfi.com.
Forward-Looking Statement
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding the Company’s business that are not historical facts are “forward-looking statements” that involve risks and uncertainties and are based on current expectations and management estimates; actual results may differ materially. The risks and uncertainties which could impact these statements are described in the Company’s filings under the Securities Exchange Act of 1934, as amended, including its annual report on Form 10-K for the year ended July 31, 2021 filed with the Securities and Exchange Commission (the “SEC”) on September 28, 2021 and other filings the Company makes with the SEC, and include, but are not limited to, the impact and duration of the COVID-19 pandemic; labor and other workforce shortages and challenges; our dependence on principal customers; the addition or loss of significant customers or material changes to our relationships with these customers; our sensitivity to general economic conditions including changes in disposable income levels and consumer spending trends; the relatively low margins of our business, which are sensitive to inflationary and deflationary pressures; our ability to realize anticipated benefits of our acquisitions and strategic initiatives, including our acquisition of Supervalu; our ability to timely and successfully deploy our warehouse management system throughout our distribution centers and our transportation management system across the Company and to achieve efficiencies and cost savings from these efforts; our ability to continue to grow sales, including of our higher margin natural and organic foods and non-food products, and to manage that growth; increased competition in our industry as a result of increased distribution of natural, organic and specialty products and direct distribution of those products by large retailers and online distributors; increased competition in our industry, including as a result of continuing consolidation of retailers and the growth of chains; union-organizing activities that could cause labor relations difficulties and increased costs; our ability to operate, and rely on third parties to operate reliable and secure technology systems; moderated supplier promotional activity, including decreased forward buying opportunities; the potential for disruptions in our supply chain or our distribution capabilities by circumstances beyond our control, including a health epidemic; the potential for additional asset impairment charges; the risk of interruption of supplies due to lack of long-term contracts, severe weather, work stoppages or otherwise; our ability to maintain food quality and safety; volatility in fuel costs; volatility in foreign exchange rates; and our ability to identify and successfully complete asset or business acquisitions. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. The Company is not undertaking to update any information in the foregoing reports until the effective date of its future reports required by applicable laws. Any estimates of future results of operations are based on a number of assumptions, many of which are outside the Company’s control and should not be construed in any manner as a guarantee that such results will in fact occur. These estimates are subject to change and could differ materially from final reported results. The Company may from time to time update these publicly announced estimates, but it is not obligated to do so.
What recent changes has UNFI made to its produce sourcing model?
UNFI has implemented new technologies to shorten delivery times and improved its produce sourcing strategy, consolidating purchases directly from major suppliers.
How has UNFI's produce sales performed compared to the industry?
UNFI's produce sales have grown ahead of industry trends, even during inflationary pressures.
What is the significance of the Wild Harvest brand for UNFI?
The Wild Harvest brand is expanding, with successful product launches like organic bananas, enhancing UNFI's organic produce offerings.
What technology did UNFI implement to improve quality control?
UNFI introduced Share-ify, a real-time quality control program that synthesizes data to ensure the freshness of its produce.
How does UNFI's new sourcing model impact inventory?
The new sourcing model has improved inventory turnover and reduced inventory shrink for UNFI.
