United Natural Foods, Inc. Extends Distribution Partnership with Whole Foods Market to 2032

Rhea-AI Summary

United Natural Foods has extended its distribution partnership with Whole Foods Market until May 2032. This agreement solidifies UNFI as the primary distributor for Whole Foods, replacing the prior agreement that was set to expire in September 2027. David Matthews, President of National Sales for UNFI, highlighted the commitment to providing quality foods and supporting Whole Foods' growth. David Garraway, VP Supply Chain for Whole Foods, emphasized the importance of UNFI in their supply chain as they continue to expand.

Positive

• UNFI secures an eight-year extension with Whole Foods Market, ensuring revenue stability until May 2032.
• The extension solidifies UNFI's role as the primary distributor for a major affiliate of Amazon, potentially enhancing market credibility.
• The partnership reflects mutual confidence, indicating UNFI's ability to meet growing consumer demands.

Negative

• Potential risks if UNFI fails to meet the high expectations of the extended contract with Whole Foods.
• Dependence on a single major client could pose financial risks if Whole Foods changes its distribution strategy.

Insights

Financial Analyst

The extension of the distribution partnership between United Natural Foods, Inc. (UNFI) and Whole Foods Market is a significant development for both companies. For UNFI, the agreement provides a steady revenue stream from a reliable and prominent client for an additional eight years, which is important for financial stability and long-term planning. By securing a primary distributor role until 2032, UNFI mitigates future revenue risks that might have emerged had the contract expired in 2027. Furthermore, this partnership enhances UNFI's market positioning by maintaining a relationship with a leading player in the organic and natural foods sector.

For Whole Foods Market, the logistical stability provided by UNFI helps maintain consistent supply chain operations, which is vital for sustaining customer satisfaction and operational efficiency. Given Whole Foods Market's affiliation with Amazon, any disruptions in their supply chain could have broader implications for Amazon's grocery segment. The extension secures continuity and the capacity to meet growing consumer demand for high-quality, natural products.

Investors should note that while this extension offers stability, it doesn't necessarily forecast significant revenue growth but rather continuity. The impact of this deal on UNFI’s stock price may be positive in the short term due to increased investor confidence, but the real measure of benefit will be seen in consistent performance over the years.

Market Research Analyst

This extended partnership between UNFI and Whole Foods Market is notable within the context of the broader grocery and organic foods market. UNFI's role as the primary distributor to Whole Foods, a major player in the organic food segment, reinforces its stronghold in a rapidly growing market. The demand for organic and natural products has seen significant growth over the past decade, driven by increased consumer awareness towards health and sustainability.

From a market perspective, this agreement ensures that UNFI retains a substantial share of the organic food distribution market, thus providing it with a competitive edge over other distributors. Additionally, the long-term nature of this agreement allows both companies to plan collaboratively for future market shifts and consumer trends.

For retail investors, this partnership signals a stable market positioning for UNFI and indicates potential for sustained performance in a growing segment. However, it's important to monitor market dynamics and see if UNFI can leverage this partnership to innovative market strategies or further expansion.

PROVIDENCE, R.I.--(BUSINESS WIRE)-- United Natural Foods, Inc. (NYSE: UNFI) announced today that it has extended its wholesale grocery distribution partnership with Whole Foods Market, an affiliate of Amazon.com, Inc. (NASDAQ: AMZN), by entering into an eight-year extension agreement with the company to serve as their primary distributor. The term of the newly extended distribution relationship between the parties will now run until May 2032, replacing the term of the prior agreement, which was set to expire in September 2027.

UNFI Extends Distribution Partnership with Whole Foods Market to 2032. (Graphic: Business Wire)

“We are proud to extend our longstanding partnership with Whole Foods Market to provide high-quality foods and other valuable items to consumers all across the country,” said David Matthews, President of National Sales for UNFI. “We look forward to supporting Whole Foods Market and remain firmly committed to working together to serve the evolving needs of their consumers.”

"UNFI plays an important role in our supply chain as we continue to grow and serve more customers," said David Garraway, Vice President Supply Chain for Whole Foods Market. "We look forward to strengthening our longstanding partnership together."

About UNFI

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 delivering value for its stakeholders, visit www.unfi.com.

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 include those 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 29, 2023, filed with the SEC on September 26, 2023, and other filings the Company makes with the SEC. 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 contained in this press release to reflect subsequently occurring events or circumstances. 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.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240516707242/en/

For UNFI Investors:

Kristyn Farahmand

401-213-2160

kristyn.farahmand@unfi.com

-or-

Steve Bloomquist

952-828-4144

steve.j.bloomquist@unfi.com

For Media:

UNFI

Charles Davis

215-539-1696

cdavis@unfi.com

Source: United Natural Foods, Inc.

FAQ

What is the new expiry date for UNFI's partnership with Whole Foods Market?

The new expiry date for UNFI's partnership with Whole Foods Market is May 2032.

How long was the previous distribution agreement between UNFI and Whole Foods Market set to last?

The previous distribution agreement was set to expire in September 2027.

What role does UNFI play for Whole Foods Market according to the new agreement?

UNFI will continue to be the primary distributor for Whole Foods Market.

Which companies are involved in the extended distribution partnership?

The extended distribution partnership involves United Natural Foods (UNFI) and Whole Foods Market, an affiliate of Amazon.

Why is the extended agreement between UNFI and Whole Foods Market significant?

The extended agreement is significant as it ensures UNFI's revenue stability and reinforces its market credibility as the primary distributor for a major retailer.