Enhancing Distribution Of Organic Products

UNFI, Tree Of Life expand operations to meet growing consumer demand for organics.


Organic foods in the form of consumer packaged goods (CPG) stand out on the shelves of conventional grocery stores and dominate the assortments of natural products retailers that cater to health-oriented shoppers. As consumer demand for these foods and beverages has increased, so has the sophistication of product distribution to thousands of retail customers around the country.

Expansion of facilities and advances in supply chain practices and technology have combined to produce more reliable distribution. That much is clear upon a close look at the two giant rivals in the business: United Natural Foods and Tree of Life.

At the latter firm, company officials say the foundation of its strategy is excellence in buying and selling, logistics and order quality-all of the fundamentals of food distribution.

Michael Funk, president and CEO of United Natural Foods (UNFI), has pledged to enhance value to retailers through everything from a "highly-evolved logistics network, on-time deliveries and promotional and marketing programs to industry-leading service levels and broad product availability." The company carries more than 40,000 products and supplies over 17,000 retail customers nationwide.

UNFI is the largest publicly-traded wholesale-distributor in the natural and organic foods industry. It services a wide variety of retail formats, including super natural chains, independent natural products retailers and conventional supermarkets.

Since 2002, the distributor has added approximately 1, 900,000 square feet of capacity-a 100 percent increase in distribution capacity. In 2003, UNFI became the first and largest certified organic distributor in North America. All of its DCs are certified by Quality Assurance International, the industry's underwriter of organic quality.

Recently, the company rolled out a new distribution facility-the largest in its nationwide network-after relocating from New Oxford, PA. Full commencement is expected to occur at the end of this year at the new 675,000 square foot distribution center in York, PA. The facility boasts "best-in-class" warehousing and inventory control systems, including state-of-the-art "pick-to-voice" order fulfillment systems.

It will serve as the hub for customers in New York, New Jersey, Pennsylvania, Delaware, Maryland, Ohio, Virginia and West Virginia.

"We continue to experience growing consumer demand and completion of this new location will help relieve our over-capacity at the New Oxford facility as well as enhance our overall capacity to grow," says Funk. "The infrastructure investments in our nationwide distribution network will ultimately serve to improve efficiencies, lower our operating costs and provide customers with enhanced product diversity."

For the York facility, UNFI will be pursuing LEED (Leadership in Energy and Environmental Design) certification-a third-party certification program and a nationally accepted benchmark for the design, construction and operation of high performance green buildings. LEED promotes a whole-building approach to sustainability by recognizing performance in sustainable site development, water savings, energy efficiency, materials selection and indoor environmental quality.

The leasing of a new, state-of-the-art distribution center in Moreno Valley, CA, is also in the works. The recently constructed 613, 200-square-foot facility will be UNFI's largest distribution center in its western region, serving customers in Southern California, Arizona, Southern Nevada, Southern Utah and Hawaii.

Operations are scheduled to commence during the summer of 2008 and the facility is expected to employ approximately 340 associates within the first year. Like the York operation, the Moreno Valley location is designed to enhance efficiencies, lower operating costs in its distribution network and improve productivity through "best- in-class" warehousing and inventory control systems.

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