U.S. organic food distributor buys Canadian network

A U.S. firm billing itself as that country’s leading distributor of organic and natural foods will buy Canada’s biggest distributor of organic, natural, kosher and specialty foods.

Toronto food firm SunOpta Inc. said Tuesday it will sell its SunOpta Distribution Group (SDG) assets to United Natural Foods (UNFI) for C$68 million.

The deal doesn’t include SDG’s distribution or manufacturing assets for “natural” health products, which the seller said it will keep.

UNFI, a Rhode Island firm, said Tuesday it will make offers of employment to workers at SDG’s affected operations.

UNFI CEO Steve Spinner, in SunOpta’s release, described the SDG deal as “the latest step in our strategy to grow our organic and specialty foods business.” It also”represents an opportunity for UNFI to diversify its operations by entering into the Canadian market,” he said.

SunOpta, for whom the SDG assets alone raised revenue of US$169.6 million in 2009, said shedding the food distribution assets is “an important milestone in our strategy to focus on our core food manufacturing platform.”

Net proceeds from the SDG sale will be used to reduce existing debt, said SunOpta.

SDG, launched in 2002, now handles about 15,000 different stock-keeping units (SKUs) through five distribution centres, feeding about 6,000 of its customers’ outlets.

Providence-based UNFI, by comparison, carries and distributes over 60,000 SKUs to over 17,000 of its customers’ outlets nationwide. Those include conventional supermarket chains, “natural product” superstores, independent retailers and foodservice channels.

“We are very excited to be joining with UNFI given its broad product array and outstanding commitment to customer support,” SDG president Roger Eacock said in UNFI’s release.

The deal, he said, gives SDG “additional resources to expand our product offerings and serve more customers with greater efficiencies, utilizing items such as UNFI’s substantial purchasing power and sophisticated interregional logistics system.”

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