UNFI Supplies Safeway with Natural Products

PROVIDENCE, R.I.United Natural Foods Inc. (UNFI) will replace Safeway Inc.s current distributor of specialty, natural, organic and regionally relevant products, according to a three-year agreement signed by both companies. UNFI will assume distribution to all of Safeways banners in the United States for non-proprietary natural, organic and specialty products effective October 2011. A brief transition period from Safeways current distributors is expected, which will coincide with the termination of the current distributors distribution agreements.

UNFI said it anticipates incremental annual volume from this contract will increase annual revenues by approximately 4 percent in fiscal 2012. Our ability to continue to gain market share reflects the ongoing efforts by all of our associates to service our customers needs and further strengthens our position as the nations leading distributor of natural, organic and specialty products," said Sean Griffin, senior vice president, national distribution of the UNFI. We are in the process of finalizing a transition plan with Safeway in order to provide them with excellent service levels and support, while ensuring there are no disruptions to any of our existing customers."

UNFI will incur approximately $1.5 million$2.5 million in total start-up expenses during the fourth quarter of fiscal 2011 and the first quarter of fiscal 2012 to transition this business. It is anticipated that approximately $0.5 million to $1.0 million in costs will occur in the fourth quarter of fiscal 2011, ended July 30, 2011, with the remaining costs being incurred in the first quarter of fiscal 2012.

UNFI carries and distributes more than 60,000 products to more than 23,000 customer locations throughout the United States and Canada. The company serves a wide variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel. In February 2011, VIRGO recognized UNFI with its annual Vanguard Award at the 9th annual Focus on the Future conference. The Vanguard Award recognizes leadership that has made an important impact on the health, wellness and nutrition industries. UNFI has achieved financial success while expanding efforts in sustainability and social responsibility. Examples of UNFI's leadership include the company's commitment to LEED® certification and sustainable operations, charitable efforts such as Vitamin Angels, Feeding America, and the work in Haiti, the use of solar power and other sustainable energy sources, and the hybrid vehicle program for employees.

Safeway Inc. is a Fortune 100 food and drug retailers in North America. The company operates 1,692 stores in the United States and western Canada and had annual sales of $41.1 billion in 2010.