United Natural and Millbrook food distributors merge
Organic food distributor United Natural Foods, Inc. announced it has entered into a merger agreement with Millbrook Distribution Services, Inc., a privately held subsidiary of Distribution Holdings, Inc., according to the company
Millbrook President and Chief Executive Officer Robert Sigel will continue to oversee the operations of Leicester, Mass.-based Millbrook once the merger with United Natural Foods is completed.
Dayville, Conn.-based United Natural Foods believes that the transaction will accomplish several strategic objectives for the company, including accelerating its expansion into various high-growth business segments and establishing an immediate presence in the specialty foods market.
The company hopes that Millbrook's strong customer base will also enhance United Natural Food’s conventional supermarket segment, while creating opportunities to cross sell its organic food in conventional supermarkets and have Millbrook put its conventional foods in organic markets.
United Natural Foods carries and distributes more than 40,000 products to more than 17,000 customers nationwide and serves a variety of retail formats including conventional supermarket chains, natural product superstores, independent retail operators and the food service channel.
Millbrook distributes more than 22,000 specialty food items and over 20,000 health and beauty care items and other non-food items to more then 9,000 retail locations. The company’s customers include independent store retailers, regional and national supermarkets, mass merchandisers and chain drug stores in 48 states.
Shamber said that the United Natural Foods primarily uses B-to-B marketing to target natural food stores like Whole Foods and Wild Oats, while also targeting the independent mom and pop chains and regional organic markets like Earth Fare and New Seasons.
“The closest that we come to B-to-C marketing is through a small portion of buying club,” he said. “We do very little advertising. Most of the marketing initiatives we do compliment our suppliers. We have coupon books and advertising circulars that we offer to retailers. It’s mostly our suppliers trying to sell to their customer with us as the conduit.”
Shamber thinks that United Natural Foods and Millbrook Distribution will initially keep the companies’ marketing and businesses separate. He thinks that the two companies are equally successful in different markets, so he said that the companies will cross-pollinate in the short term.
“I wouldn’t think that the (marketing) initiatives will have any wholesale changes, they’ll just compliment current strategies,” he said. “I would say it’s too early to tell but I wouldn’t expect any dramatic changes, perhaps some tweaking on existing strategies.”
Shamber said agencies should wait to pitch proposals to United Natural Foods. The company currently has both national and regional marketing personnel that Executive Vice President and Chief Marketing Officer and President of United Natural Brands Daniel Atwood supervised for a number of years.
“I think we would always listen to anything that was presented to us but I don’t know if we’d actively be seeking anything right now,” he said. “You certainly can’t predict down the road where somebody might come along with a proposal that’s a completely different take and is outside the box, but in the short term, there’s no immediate need.”
According to Nielsen Monitor-Plus, Millbrook Distribution spent approximately $60,000 on local newspaper ads in 2006.
Interested agencies should keep United Natural Foods on your long-term prospect list. Take your time to come up with a way for the company to leverage Millbrook Distribution, as well as, any other partners that the company picks up along the way. Then, after United Natural Foods has begun to establish itself in more conventional marketplaces throughout the country, make your initial introductions and pitch your marketing strategy ideas.
United Natural Foods Inc.
260 Lake Road
Dayville, CT 06241
National Vice President of Marketing
Executive Vice President, Chief Marketing Officer & President of United Natural Brands
President & Chief Executive Officer
Millbrook Distribution Services Inc.
88 Huntoon Memorial Highway
Leicester, MA 01524
Robert A. Sigel
President & Chief Executive Officer