Tired supply chain turns into silver liner for UNFI



Dive brief:

  • UNFI is taking advantage of supply chain disruptions affecting grocers as more customers turn to the company for supplies, executives said at a press conference. earnings call Tuesday.
  • President Chris Testa said UNFI’s buying ladder and portfolio has helped turn others’ logistical challenges into sales. Customers who previously only bought natural foods from UNFI, for example, have also turned to purchasing conventional foods due to supply chain constraints.
  • “The supply chain is currently under stress and has been for 17 months. And that level – that environment – has been an opportunity for UNFI, ”Testa said.

Dive overview:

Taking advantage of this opportunity has been difficult for UNFI. “It’s been a roller coaster ride,” Testa said.

UNFI itself has faced “sourcing challenges” that have resulted in declining service levels from inbound vendors, according to Testa. The underlying factors affecting raw material purchases and transportation costs deteriorated in the fourth quarter and the company faced a temporary stop in one of its facilities.

“The retail community is increasingly tired of limited assortments and increasing stockouts in several key categories,” Testa said.

Nevertheless, the UNFI new CEO, Sandy Douglas said he saw opportunities for the growth of the business and endorsed the strategic plan of the business which was set up over the summer aiming to generate $ 30 billion in sales and $ 900 million in adjusted profits by 2024.

Some of these plans are already taking shape.

“My first view is that there are significant opportunities to improve the way we serve existing and new customers and the ability to partner with suppliers to provide customers with the differentiated products and services of the most. high quality that they want and need, ”said Douglas.

UNFI restructured its sourcing during the last quarter to focus on relationships with its own suppliers. “Closer relationships with producers should improve the consistency of our sourcing up to days outside the supply chain and ultimately improve product quality across the network and help boost sales, ”Testa said.

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