UNFI Reveals ‘Fuel the Future’ Growth Strategy
During its virtual Investor Day on June 24, United Natural Foods Inc. (UNFI) unveiled its new growth strategy, outlining the pillars of its Fuel the Future plan and its focus on increasing market share through network optimization, stronger innovation and an enhanced customer experience.
“UNFI has built a tremendous customer base, we have amazing associates, and we’re truly excited by our Fuel the Future strategy, which will help guide the next chapter of our growth,” said UNFI Chairman and CEO Steven Spinner. “I’m proud of all the work and success we’ve had under our prior Build-out-the-Store strategy, which widely expanded our offerings and strengthened our core business. Our new plan builds off that work, elevating us to the next level and focusing our efforts on making our customers stronger, our supply chain better and our food solutions more inspired.”
Fuel the Future is composed of six pillars that work together to deliver the “FUTURE” by advancing key areas of the UNFI business. Highlights of the plan are:
- Fulfill Power in Scale: optimizing UNFI’s distribution network, maximizing capacity and simplifying operations with higher levels of standardization, and making investments in technology.
- Unlock Customer Experience: expanding the company’s portfolio of brands, products and services while offering more tailored solutions to help UNFI’s customers grow.
- Taste the Future: investing in existing, high-margin growth platforms such as Brands+, as well as developing new sources of revenue that further complement UNFI’s core wholesale business.
- UNFI Pride: focusing on UNFI’s people to deliver on the company's core value of safety in the workplace, as well as enhancing the overall associate experience; embracing and growing diversity of background, thought and approach; and UNFI’s commitments toward climate change and food insecurity and injustice, among other priorities.
- Retail Optimization: advancing the retail business through greater investment in store upgrades, e-commerce and digital platforms, combined with new sites that will contribute to growth.
- Earn Results: driving sustainable growth and stakeholder value, with the Fuel the Future plan helping deliver fiscal 2024 financial results that are expected to include sales of more than $30 billion; adjusted EBITDA of more than $900 million; and earnings per share (EPS) of more than $5.25.
UNFI released its third-quarter fiscal 2021 financial results earlier in the month, posting expected declines but also reporting revenues 6.7% higher than pre-pandemic figures. It had a net income of $48.6 million for the period ending May 1. That’s down from the $88.1 million net income in the same pandemic-defined period in 2020. While the wholesaler reported net income loss, it's still on track to meet 2021 goals.
Baltimore-based grocery industry observer Jeremy Diamond provided other insights into the recent investor meeting, noting that UNFI isn’t looking to sell the Shoppers supermarket chain. While Spinner said that the Cub and Shoppers retail chains contributed to UNFI's increased sales, "he didn't state the real reason he's backed off from trying to sell Shoppers," noted Diamond.
“The pension fund, with thousand of members, is large and underfunded,” continued Diamond. “Safeway and Ahold have passed on purchasing the remaining Shoppers stores due to this reason. No grocery company/purchaser currently wants to take on this large liability.”
Providence, R.I.-based UNFI delivers a wide variety of products to customer locations throughout North America, including natural product superstores, independent retailers, conventional supermarket chains, e-commerce retailers and foodservice customers. The largest publicly traded grocery distributor in America, the company is No. 47 on The PG 100, Progressive Grocer's 2021 list of the top food and consumables retailers in North America.
