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United Natural profits from demand for natural and organic

By Caroline Scott-Thomas , 08-Mar-2010

United Natural Foods, Inc. (UNFI) has reported a 15 percent increase in profits for Q2 of the current fiscal year compared to the equivalent 2009 period, on the back of continuing demand and new business.

In contrast with other markets, including much of Europe, demand for organic and natural products has stayed strong in the United States over the past year, with supermarket sales falling just 0.3 percent, according to Mintel. The market research organization’s figures also show that the popularity of natural products has boomed – making ‘natural’ the leading label claim on new products, featuring on 23 percent of those launched globally in 2009.

UNFI, the organic and natural food and supplements wholesaler and distributor, said its net sales increased six percent to $898m during the quarter ended January 30. It has also been awarded $100m-worth of annual new business during the last six months, which the company said it will phase in throughout fiscal 2010.

President and CEO Steven Spinner said: "Improving sales trends have provided us with a solid level of top-line growth as we continue to work to gain market share and incremental business.”

However, Spinner would not name the companies involved when questioned during a conference call with investors.

“As we begin the second half of fiscal 2010, I look forward to continued revenue growth throughout our company," Spinner said. "UNFI will continue to enhance its national leadership position in the natural, organic and specialty foods channel. Our strategy to increase market share, drive operational excellence, operate as one company and further our sustainability and philanthropic causes will serve as the primary vehicle for success over the long term."

For the quarter ended January 30, the company reported a profit of $15.7m, or 36 cents a share, up from $13.6 million, or 32 cents a share, a year earlier.

The company had been expected to post strong profits after Whole Foods reported a 79 percent boost in its quarterly profits last month, as Whole Foods is UNFI’s biggest customer, accounting for one third of sales.

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