United Natural Foods Buys Select Nutrition

DAYVILLE, Conn.--United Natural Foods Inc. (NASDAQ:UNFI) announced Dec. 21 it bought Select Nutrition Distributors Inc., a New York-based private distributor of health and beauty aids (HBA) and vitamins, minerals and supplements (VMS). Details of the transaction were not disclosed.

In first quarter 2004, the two companies formed a partnership under which Select Nutrition began distribution of certain VMS and HBA products to UNFI customers. From its two warehouses in Visalia, Calif., and Philadelphia, Select Nutrition distributes more than 14,000 products, representing more than 450 manufacturers, to some 5,000 customers nationwide, according to UNFI. Select Nutrition filed Chapter 11 bankruptcy in February 2001, following a difficult move to the Philadelphia warehouse, only to emerge by September 2001 to reestablish itself as a major player in VMS and HBA distribution.

Select Nutrition has been a long-standing partner, and its franchise is a terrific complement to the United Natural Foods organization, said Steven Townsend, chairman and chief executive officer of UNFI. We believe the combined resources of our two organizations will result in enhanced presence and increased market share, and serve to rationalize distribution in the HBA and VMS categories.

Born as a merger of two distributors, Cornucopia Natural Foods and Mountain Peoples Warehouse, UNFI grew to its present size (revenues of $1.6 billion in 2004 revenue) through acquisitions, partnerships and major distribution agreements, including deals with Albert's Organics, Hershey Import, Northeast Cooperatives and Blooming Prairie Warehouse. For at least the last decade, the company was the primary distributor to Whole Foods Market, and it reacquired the business of Wild Oats Markets this year in five-year deal worth $1 billion. Also in 2004, UNFI entered the food service sector, inking deals with heavyweights Sodexho and Aramark. The company also poured millions into major expansion initiatives at a number of its facilities across the nation, including key plants in Iowa City, Iowa, and Dayville.