What changed in this filing

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Item 1. Business

2023-09-26 compared with 2022-09-27 · 113 added, 128 removed, 175 unchanged (58% of the section changed)

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Our diversified customer base includes over 30,000 customer locations ranging from some of the largest grocers in the country to smaller independents as well.

We offer approximately 260,000 products consisting of national, regional and private label brands grouped into six product categories:

We offer approximately 250,000 products consisting of national, regional and private label brands grouped into the following main product categories:

grocery and general merchandise;

perishables and frozen foods;

nutritional supplements and sports nutrition;

bulk and foodservice products;

and personal care items.

We believe we are North America’s premier wholesaler with 56 distribution centers and warehouses representing approximately 30 million square feet of warehouse space.

frozen foods;

wellness and personal care items;

and bulk and foodservice products.

We believe we are North America’s premier grocery wholesaler with 55 distribution centers and warehouses representing approximately 30 million square feet of warehouse space.

We are a coast-to-coast distributor with customers in all 50 states as well as all ten provinces in Canada, making us a desirable partner for retailers and consumer product manufacturers.

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Our Strategic Priorities

We are committed to executing our Fuel the Future strategy.

Through this strategy, UNFI is building a food ecosystem that is better for all by delivering great food, more choices and fresh thinking for our customers and suppliers.

Our Fuel the Future strategy consists of six pillars:

Fulfill Power in Scale, Unlock the Customer Experience, Taste the Future, UNFI Pride, Retail Optimized, and Earn Results.

We are executing our strategy through four focus areas:

1) Customers:

Utilizing our scale, insights and innovative offerings to develop a differentiated value proposition that helps our customers grow and gain share.

2) Suppliers:

Strengthening our capabilities, especially those driven by technology, to deliver value creating programs to our suppliers.

3) Associates:

Building a culture that inspires pride and enables associates to do their best work.

4) Communities:

Supporting our communities and the planet through our wide-ranging and ambitious environment, social and governance (ESG) initiatives.

We believe that we have been able to broaden our geographic penetration, expand our customer base, enhance and diversify our product selections, increase our market share, increase operating efficiencies in existing facilities and open new facilities in part through our 2018 acquisition of SUPERVALU INC.

(“Supervalu”).

We are continually striving to better serve our stakeholders, including our customers, suppliers, associates and communities, while driving profitable growth and sustainable shareholder value creation.

We have recently introduced our transformation strategy designed to accomplish this.

Our enterprise-wide business transformation strategy, which we believe will position us for customer service and cost structure improvement, consists of four areas:

Network Automation and Optimization:

Enhancing our distribution network to drive efficiency and improve the customer experience, which we expect to increase network capacity and scalability.

Commercial Value Creation:

Generating more profitable revenue growth through simplified pricing and procurement, and enhancing analytical insights for our customers and suppliers, making it easier to do business with UNFI.

Digital Offering Enhancement:

Integrating and enhancing the functionality of the digital platforms we offer and expanding the actionable intelligence we provide through these platforms.

Infrastructure Unification and Modernization:

Addressing legacy integration issues and continuing investments to upgrade and simplify our digital infrastructure, which we expect will streamline operations, provide greater visibility and enhance our scale.

We are also working on near-term initiatives to help improve profitability while we execute our longer-term strategy.

These include actioning administrative structure efficiencies, reprioritizing our selling and administrative spending, optimizing our stock-keeping unit (“SKU”) assortment as well as reviewing commercial contracts in collaboration with our customers and suppliers.

We expect to continue to use available capital to re-invest in our business, and we remain committed to improving our financial leverage and reducing outstanding debt over the long term.

Since the close of our 2018 acquisition of SUPERVALU INC.

(“Supervalu”), we have reduced net debt by $1.4 billion.

We believe we can enhance our profitability and accelerate our growth through our transformation efforts, which we expect will improve our cost structure, increase sales of products and services, and position us to provide tailored, data-driven solutions to help our customers run their businesses more efficiently and contribute to customer acquisitions.

We believe the key drivers for value creation will be improved efficiency through the automation and optimization of our supply chain, as well as new customer growth associated with the benefits of our significant scale, product and service offerings and nationwide footprint.

Our Commitment to Social and Environmental Responsibility

We Believe in Better for All

We are committed to being good stewards of our planet, our communities and our people through tangible action.

In fiscal 2022, we published our 11 th annual environmental, social and governance report, which we refer to as our Better For All report and the first update to our Better for All plan, which seeks to build a food system that is better for our people, our communities and our world.

The report is available on our website at www.betterforall.unfi.com and expands the six impact focus areas to provide a more in-depth look at the direct and indirect impacts at multiple points along the value chain.

Our key focus areas include Diversity & Inclusion, Responsible Procurement, Community Development, Governance, Associate Safety & Well-Being, Climate Action, Waste Reduction, Customer Health & Safety, and Energy Efficiency.

Building a Food System That’s Better for All

As North America’s premier grocery wholesaler, we are using our scale to drive progress across the food industry, focusing on the areas where we can affect the greatest change.

Now in the third year since unveiling our Better for All plan, we continue to evaluate the impacts we have along our value chain, focusing on proactively engaging with the people making and moving the products we distribute.

In fiscal 2023, we published our 12th annual Better for All report, which offers a summary of our social, environmental, and governance impacts during the fiscal year, and the second update to this plan, which prioritizes nine areas of focus:

Associate Safety & Well-being, Climate Action, Community Development, Customer Health & Safety, Diversity, Equity, and Inclusion, Energy Efficiency, Governance, Responsible Procurement, and Waste Reduction.

The report is available on our website at www.betterforall.unfi.com and highlights progress toward goals including waste reduction, supplier diversity, food donations, and food safety.

Our Better for All report and the contents of our Better for All webpage are not incorporated by reference into or considered to be part of this Annual Report.

Better for Our World

We continue to focus on reducing our environmental impact, conserving natural resources and promoting sustainability across our value chain and in our operations.

We invest in the efficiency of our transportation fleet and warehouses, generate on-site solar power for operations use and focus on diverting waste from landfills.

In fiscal 2022, we announced a new set of climate targets covering Scope 1, 2 and 3 emissions, which have been validated by the Science Based Targets initiative.

To help address value chain emissions, we created the UNFI Climate Action Hub, which provides tools and resources to our suppliers to help innovate and scale climate solutions across the food system.

Better for Our Communities

We believe that freedom of food choice matters and we play a vital role in delivering safe, quality and nutritious food options to more tables across North America.

We are working to increase access to better food, particularly for people in low-income and rural communities or vulnerable situations, through monetary and in-kind donations and operating retail stores in underserved areas.

The UNFI Foundation, a 501(c)(3) organization, provides grants to nonprofit organizations working to build better food systems and nurture everyday health.

In fiscal 2022, the UNFI Foundation announced the UNFI Food Equity Project, which aims to invest in community-led solutions that create more equitable access to fresh, healthy food.

We also encourage our associates to make a difference by volunteering in their communities, including through paid volunteer time off.

Better for Our People

The safety and wellbeing of our associates is a top priority.

We are focused on fostering a culture of caring and safety;

we are continuously striving toward zero injuries and accidents.

We are also working to advance diversity, equity and inclusion in our workplace by creating and maintaining a culture of inclusion and empathy through open dialogue, effective associate training, and by honoring holidays and special events that speak to our associates’ identities.

In fiscal 2021, we launched a new “Missions” platform to promote awareness of our Better for All goals and engage associates in issues that matter to them and to UNFI as a whole.

Our impact begins with the decisions made by our partners and suppliers, well before products reach our distribution centers.

We are investing in programs and partnerships that will help build a more equitable system and carry our values further upstream.

In fiscal 2023, we launched the UNFI Climate Action Partnership, encouraging suppliers to set credible climate goals.

The program builds on UNFI’s Climate Action Hub, which offers suppliers a variety of tools and resources to innovate and scale climate solutions across the food system.

We also published a new Deforestation Policy, an updated Animal Welfare Position Statement, and an updated Supplier and Vendor Code of Conduct, clearly outlining expectations of suppliers on responsible procurement topics.

We remain focused on operating efficiently and sustainably, which includes managing the social and environmental impacts within our direct control.

Our associates’ safety and well-being are of utmost importance to us.

Our primary goal is to cultivate a culture that values care and safety for all.

Through continuous efforts we are dedicated to achieving zero injuries and accidents, ensuring a safe and thriving environment for everyone.

In fiscal 2023, we received a score of 100 on the Human Rights Campaign Foundation’s 2022 Corporate Equality Index and a score of 100 on the Disability Equality Index.

In 2023, we launched our seventh associate-led Belonging & Innovation Group, the Asian Coalition for Engagement, to celebrate Asian Pacific Islander heritage, promote career development and foster a safe space for all.

We also completed key initiatives in support of our science-based climate targets, including the completion of LED lighting installations at all distribution centers, the installation of our largest solar array to date in Howell, New Jersey, and achievement of our goal of sourcing 20% of our electricity from renewable sources.

We aim to be responsible community members, from how we provide information and services to our customers, to the local organizations our associates support with their volunteer hours.

In fiscal 2023, we significantly grew associate volunteerism and the UNFI Foundation, a 501(c)(3) organization, began a five-year strategic planning process intended to make a more profound impact on the communities we serve.

We also made strides toward our food waste reduction goal and expanded our partnership with Too Good to Go, an innovative food waste reduction app and the largest business-to-consumer marketplace for surplus food.

Social and environmental responsibility remains integral to our overall business strategy, and we believe these practices deliver significant value to our stakeholders, including our stockholders, associates, customers, suppliers and communities.

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This includes sales to eCommerce companies as well as business-to-business sales to non-traditional customers.

In fiscal 2021, we launched Community Marketplace by UNFI, a business-to-business digital eCommerce solution for emerging brands looking to expand distribution with UNFI customers.

In fiscal 2021, we launched Marketplace by UNFI, a business-to-business digital eCommerce solution for emerging brands looking to expand distribution with UNFI customers.

Through this virtual marketplace, suppliers gain immediate access to UNFI’s digital infrastructure to promote and sell their products to UNFI’s broad customer base while UNFI customers gain access to an even broader assortment of unique and local items with flexible order sizes and the convenience of ordering from multiple sources online in one place.

We organize and operate our Wholesale reportable segment through four U.S.

In June 2023, we realigned our regional structure by consolidating from four operating regions to three.

We now organize and operate our Wholesale reportable segment through three U.S.

geographic regions:

Central and Pacific, each of which is led by a separate regional president responsible for product and service strategy, execution and financial results;

East, Central and West, each of which is led by a separate regional president responsible for product and service strategy, execution, and financial results;

and Canada Wholesale, which is operated separately from the U.S.

Wholesale business.

Product and service categories include grocery, fresh, wellness, private brands, eCommerce, foodservice and multi-cultural.

Product and service categories include grocery, fresh, private brands, wellness and personal care items, eCommerce, and foodservice.

This operating structure includes regional sales organizations and distribution center networks, which offer a combination of conventional and natural products to our customers as a consolidated supply solution.

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As a logistics provider, efficiency is an important customer service measure.

We optimize our facilities to implement leading warehouse technology, ranging from radio-frequency devices guiding selectors to mechanized facilities with completely automated order selection for dry groceries that help us deliver aisle-ready pallets to Wholesale customers.

We are in the process of optimizing our facilities to implement leading warehouse technology, ranging from radio-frequency devices guiding selectors to mechanized facilities with completely automated order selection for dry groceries that help us deliver aisle-ready pallets to Wholesale customers.

Deployment of continuous improvement methodologies within our supply chain is focused on delivering labor and cost efficiencies while also improving our ability to more effectively service our customers.

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Net sales to customers are determined at the time of sale based on the then prevailing vendor listed base cost, and include discounts we offer to our customers.

The differential between the procured cost, including vendor funds and inbound freight, as compared to the net sales price of these products, generates our gross margin.

The differential between the procured cost, including vendor funds and inbound freight, as compared to the net sales price of these products, primarily generates our gross margin.

A key component of our historical growth has been to acquire distribution companies differentiated by product offerings, service offerings and market area.

We believe the expanded product and service offerings from these acquisitions has enhanced and will continue to support our ability to acquire new customers and present opportunities for cross-selling complementary product lines.

The Company expects to selectively and strategically engage in acquisitions to enhance our capabilities and geographic footprint.

We believe the expanded product and service offerings from these acquisitions have enhanced and will continue to support our ability to acquire new customers and present opportunities for cross-selling complementary product lines.

Since our strategic $2.3 billion acquisition of conventional distributor, Supervalu, the Company has prioritized the integration of Supervalu and debt reduction and has not undertaken any additional material acquisitions.

As our financial leverage has decreased following the Supervalu acquisition and to the extent it remains near our target levels, we may consider strategic acquisitions.

We may consider strategic acquisitions to enhance our capabilities and geographic footprint, when we determine that to be the most efficient use of capital.

Our Retail segment includes 78 Cub Foods and Shoppers retail grocery stores.

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We offer national and local brands, as well as our own private label products.

A typical retail store carries approximately 17,000 to 21,000 core stock-keeping units (“SKUs”) and ranges in size from approximately 50,000 to 70,000 square feet.

A typical retail store carries approximately 17,000 to 21,000 core SKUs and ranges in size from approximately 50,000 to 70,000 square feet.

We believe our retail banners have strong local and regional brand recognition in the markets in which they operate.

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We offer nationally recognized brand name and private label products, including grocery (both perishable and nonperishable), general merchandise, home, health and beauty care, and pharmacy, which are sold through our Wholesale segment to wholesale customers and our Retail stores.

We offer six main product categories:

We offer the following main product categories:

grocery and general merchandise;

perishables and frozen foods;

nutritional supplements and sports nutrition;

bulk and foodservice products;

and personal care items.

frozen foods;

wellness and personal care items;

and bulk and foodservice products.

Our owned brands portfolio is a collection of brands that offer high quality solutions for private label to our customers.

ESSENTIAL EVERYDAY® is our leading national brand equivalent private label solution with 2,500+ items for departments throughout the store.

ESSENTIAL EVERYDAY® is our leading national brand equivalent private label solution with nearly 2,500 items for departments throughout the store.

It is complemented by SHOPPERS VALUE®, which offers the budget conscious consumer quality alternatives to national brands.

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Our Field Day® brand is primarily sold to natural store / co-op retailers as a private label solution.

Our category-specific brands, EQUALINE®, CULINARY CIRCLE®, ARCTIC SHORES SEAFOOD COMPANY®, STONE RIDGE CREAMERY® and SUPER CHILL®, also provide national brand equivalent products at a competitive price.

Our Blue Marble Brands portfolio is a collection of national brands that offer USDA organic, non-GMO Project Verified, and specialty food and non-food items.

Our category-specific brands, primarily including STONE RIDGE CREAMERY®, EQUALINE®, and CULINARY CIRCLE®, also provide national brand equivalent products at a competitive price.

Our Blue Marble Brands portfolio is a collection of national brands that offer United States Department of Agriculture (“USDA”) organic, non-GMO Project Verified, and specialty food and non-food items.

The WOODSTOCK® brand has been pioneering organic / non-GMO products for over 35 years and continues to launch innovative products.

TUMARO’S is our better for you wrap brand.

MT.VIKOS®, KOYO®, ASIAN GOURMET®, MEDITERRANEAN ORGANIC®, and NATURAL SEA® are all niche specialty brands ranging from imported Greek feta cheese to organic Ramen.

Our subsidiary doing business as Woodstock Farms Manufacturing specializes in importing, roasting, packaging and distributing nuts, dried fruit, seeds, trail mixes, granola, natural and organic snack items and confections for our customers and in the Company’s branded products.

We operate an organic (USDA and Quality Assurance International (“QAI”)) and kosher (Circle K) certified packaging, roasting, and processing facility in New Jersey that is SQF (Safety Quality Food) level 2 certified.

Woodstock Farms Manufacturing sells items manufactured in bulk and through private label packaging arrangements with large health food, supermarket and convenience store chains and independent retailers.

We operate an organic (United States Department of Agriculture (“USDA”) and Quality Assurance International (“QAI”)) and kosher (Circle K) certified packaging, roasting, and processing facility in New Jersey that is SQF (Safety Quality Food) level 2 certified.

Our Service Offerings

Our Professional Services

We offer a broad array of professional services that provide Wholesale customers with cost-effective and scalable solutions.

These services include pass-through programs in which vendors provide services directly to our Wholesale customers, as well as services and solutions we develop and provide directly.

Our services include retail store support, pricing strategy, shelf and planogram management, advertising, couponing, eCommerce, consumer convenience services, store design, equipment sourcing, electronic payments processing, network and data hosting solutions, point-of-sale hardware and software, automation tools, sustainability services and administrative back-office solutions.

Our services include shelf and planogram management, retail store support, pricing strategy, electronic payments processing, advertising, couponing, store design, equipment sourcing, point-of-sale hardware and software, network and data hosting solutions, consumer convenience services, eCommerce, automation tools, sustainability services and administrative back-office solutions.

The sales and operating results for these services are included within Wholesale.

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Trade and consumer marketing programs are supplier-sponsored programs that cater to a broad range of retail formats.

Retail marketing programs offer web and digital marketing services, including websites, mobile applications and eCommerce capabilities;

circular programs for our customers and vendors;

and allow our suppliers to purchase advertising space on our trailers.

Supplier marketing programs include information sharing programs designed to provide heightened transparency to suppliers through demand planning, forecasting and procurement insights.

All of our programs and services are designed to educate consumers, profile suppliers and increase sales for retailers, many of which do not have the resources necessary to conduct such marketing programs independently.

Our goal is to provide support to ensure long-term success.

Set forth below are the services offered by each of these programs:

Retail Marketing Programs

• We offer circular programs to our customers and vendors, and also provide retailers with a physical flyer and shelf tags corresponding to each month’s promotions.

We also offer a web-based tool, which retailers can use to produce highly customized circulars and other marketing materials for their stores called the Customized Marketing Program.

• Web and digital marketing services including websites, mobile applications and eCommerce capabilities.

• Trailer wrap program allows our suppliers to purchase advertising space on the sides of our hundreds of trailers traveling throughout the United States and Canada, increasing exposure to end consumers.

Our goal is to provide support to ensure collective long-term success.

We continually seek customer and supplier feedback to ascertain their needs and allow us to better service them.

We also provide our customers with:

We also offer our customers:

• trends reports in the natural and organic industry:

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• a robust retailer portal with product information, search and ordering capabilities, reports and publications.

Trade Marketing Programs

• New item introduction programs showcase a supplier’s new items to retailers through trials and discounts.

• myUNFI Customer allows our suppliers to advertise directly to retailers using the portal that many retailers use to order product and/or gather product information.

• Monthly specials catalogs that highlight promotions and new product introductions.

• Customized email marketing campaigns to share supplier product information or promotion directly to our Wholesale customers’ inbox.

• Specialized catalogs for holiday and seasonal products.

Supplier Marketing Programs

• Efficient Supplier Agreement is a customized supplier relationship program designed to address key needs of a select group of suppliers.

• ClearVue®, an information sharing program offered to a select group of suppliers designed to improve the transparency of information and drive efficiency within the supply chain.

With the availability of in-depth data and tailored reporting tools, participants are able to reduce inventory balances while improving service levels.

• Supply Chain by ClearVue®, an information sharing program designed to provide heightened transparency to suppliers through demand planning, forecasting and procurement insights.

This program offers weekly and monthly reporting, enabling suppliers to identify areas of sales growth while pinpointing specific opportunities for achieving greater profits.

• Supplier-In-Site (SIS), an information-sharing website that helps our suppliers better understand our Wholesale customers in order to generate mutually beneficial incremental sales in an efficient manner.

• Growth incentive programs, supplier-focused high-level sales and marketing support for selected brands, which foster our partnership by building incremental, mutually profitable sales for suppliers and us.

• Various marketing vehicles are offered that support the needs of our diverse customer base, while providing suppliers a cost-effective means to market and promote their products.

Organic Certification

Our “Certified Organic Distributor” certification covers 25 of our distribution centers in the United States.

Although not designated as a “Certified Organic Distributor” by QAI, two of our California locations are certified as Organic by the State of California Department of Public Health Food and Drug Branch, and another California location is currently registered with the California Department of Food and Agriculture Organic Program as an organic handler.

In addition, our four Canadian distribution centers in British Columbia and Ontario each hold an organic distributor certification from either QAI or ProCert Canada.

We maintain a comprehensive quality assurance program.

All of the products we sell that are represented as “organic” are required to be certified as such by an independent third-party agency.

We maintain current certification affidavits on most organic commodities and produce in order to verify the authenticity of the product.

Most potential suppliers of organic products are required to provide such third-party certifications to us before they are approved as suppliers.

Our Suppliers

We purchase our products from nearly 11,000 suppliers.

The majority of our suppliers are based in the United States and Canada, but we also source products from suppliers throughout Europe, Asia, North America, South America, Australia and New Zealand.

The majority of our suppliers are based in the United States and Canada, but we also source products from suppliers throughout the world.

We believe suppliers seek to distribute their products through us because we provide access to a large customer base across the United States and Canada, distribute the majority of the suppliers’ products and offer a wide variety of marketing programs to our customers to help sell our suppliers’ products.

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Each region is responsible for placing its own orders and can select the products that it believes will most appeal to its customers, although each region is able to participate in our company-wide purchasing programs.

Our Distribution Systems

Our Distribution Network

We select the sites for our distribution centers to provide direct access to the markets we serve and configure them to minimize total operating costs.

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Deliveries to areas outside the continental United States and Canada are typically shipped by freight-forwarders through ocean-going containers.

Our Focus on Technology

We have made significant investments in distribution, financial, information and warehouse management systems.

Organic Certification

Our “Certified Organic Distributor” certification covers 26 of our distribution centers in the United States.

In addition, our two Canadian distribution centers in British Columbia and Ontario each hold an organic distributor certification from QAI.

We maintain a comprehensive quality assurance program.

All of the products we sell that are represented as “organic” are required to be certified as such by an independent third-party agency.

We maintain current certification affidavits on most organic commodities and produce in order to verify the authenticity of the product.

Most potential suppliers of organic products are required to provide such third-party certifications to us before they are approved as suppliers.

Our Technology Investments

We continue to make significant investments in distribution, financial, information and warehouse management systems.

We continually evaluate and upgrade our systems to enhance efficiency, cost-effectiveness and responsiveness to customer needs.

These systems include functionality in radio frequency inventory control, pick-to-voice systems, pick-to-light systems, computer-assisted order processing and slot locator/retrieval assignment systems.

At most of our receiving docks, warehouse associates attach computer-generated, preprinted locator tags to inbound products.

These tags contain the expiration date, locations, quantity, lot number and other information about the products in bar code format.

Customer returns are processed by scanning the UPC bar codes.

We also employ a management information system that enables us to lower inbound transportation costs by making optimum use of our own fleet of trucks and/or by consolidating deliveries to achieve full truckloads.

Orders from multiple suppliers and multiple distribution centers are consolidated into single truckloads for efficient use of available capacity.

We believe these systems include best in class functionality in warehouse management systems, inventory control, labor management, scan-based fulfillment applications, mechanized pick-to-light systems and order management systems.

We are in the process of updating our fulfillment technology with Universal Product Code (“UPC”) scan-based technology for selection, loading and customer deliveries to ensure order accuracy throughout the supply chain.

We have also begun to make significant investments in warehouse automation solutions to support full case and unit pick fulfillment processes.

These investments are intended to unlock our supply chain capabilities, improve customer experience and enable growth.

We continue to leverage a management information system that enables us to lower inbound transportation costs by making optimum use of our own fleet of trucks and/or by consolidating deliveries to achieve full truckloads.

In addition, route efficiency software assists us in developing the most efficient routes for our outbound trucks.

As part of our “one company” approach, we have implemented a national planning and procurement system and are in the process of converting to a national warehouse management platform across the organization.

We continue to focus on the automation of certain of our distribution centers that are at different development stages.

These steps and others are intended to promote operational efficiencies and reduce operating expenses as a percentage of net sales.

Our Wholesale and Retail businesses operate in a highly competitive industry, which is characterized by low profit margins.

As part of our “one company” approach, we continue an effort to standardize to best in industry software solutions for inventory procurement, order management, transportation operations and warehouse management systems throughout our network.

Our investment in technology is intended to improve our supply chain effectiveness for our suppliers, associates and customers enabling our collective success.

Our Wholesale and Retail businesses operate in a highly competitive and rapidly evolving industry, which is characterized by low profit margins, new business models and the entry of new, well-funded competitors that intensify competition.

Our food distribution business competes with many traditional and specialty grocery wholesalers and retailers that maintain or develop self-distribution systems for the business of independent grocery retailers.

We also increasingly compete with deep discount retailers, limited assortment stores and wholesale membership clubs.

We also increasingly compete with deep discount retailers, limited assortment stores, wholesale membership clubs, and eCommerce and other internet-based businesses.

The primary competitive factors in the Wholesale business include price, service level, product quality, variety, availability and other value-added services.

In recent years, consolidation within the grocery industry has resulted in, and is expected to continue to result in, increased competition, including from some competitors that have greater financial, marketing and other resources than we do.

Independent retailers and smaller Chain customers represent a significant portion of our business and face intense competition from supercenters, deep discounters, mass merchandisers and rapidly growing alternative retail channels, such as dollar stores, discount supermarket chains, Internet-based retailers and meal-delivery services.

Independent retailers and smaller Chain customers represent a significant portion of our business and face intense competition from brick and mortar, eCommerce, and omni-channel retailers operating discount, department, retail and wholesale grocers, drug, dollar, variety and specialty stores, supermarkets, hypermarkets and supercenter-type stores, and social commerce platforms, as well as companies that offer services in digital advertising, fulfillment and delivery services, health and wellness and financial services.

Our retail banners compete with traditional grocery stores, supercenters, deep discounters, mass merchandisers, limited assortment stores and eCommerce providers.

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We are also subject to the National Labor Relations Act, which provides employees the right to organize and bargain collectively with their employer and to engage in other protected concerted activity;

and the Fair Labor Standards Act, which establishes minimum wages and overtime standards, among other requirements.

Our facilities in the United States and in Canada are subject to various environmental protection statutes and regulations, including those relating to the use of water resources and the discharge of wastewater.

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Human Capital Management

Our employees are critical to supporting our values and achieving our strategic vision.

Through our UNFI Pride strategic pillar, we are striving to be an employer of choice.

Our employees are critical to supporting our values and achieving our strategic vision, and we are striving to be an employer of choice.

We are focused on associate engagement, empowerment and safety to foster innovation and bring best-in-class solutions to our customers and suppliers in an ever-changing retail landscape, including new ways of work scheduling and productivity investments.

In fiscal 2021, we created Compensation Committee oversight for human capital management matters with a focus on associate wellbeing across a variety of measures.

The Compensation Committee of our Board of Directors has oversight of human capital management matters with a focus on associate wellbeing across a variety of measures.

As of July 29, 2023, we had approximately 29,455 full and part-time employees within continuing operations, 10,667 of whom (approximately 36%) are covered by 49 collective bargaining agreements, including agreements under renegotiation.

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We are committed to the continued support and development of our associates and provide access to robust leadership development programming, role-based training and other career development opportunities at every stage of an associate’s tenure with us.

Designed to enhance the leadership capabilities of our people, the Emerge program for front-line leaders and the Evolve program for our mid-level managers invite participants from all departments to come together to learn and practice their management skills and identify opportunities to lead more effectively.

The Elevate program for Director-level and above associates, as well as the Operations Leadership Academy for leaders in our distribution centers, work to solidify our talent pipeline and promote the success of the organization’s future leaders.

Key groups, such as Sales and Risk & Safety, develop role-based training to drive greater productivity and safety.

Designed to enhance the leadership capabilities of our people, we design and deliver optional programs to leaders across all departments to come together to learn and practice their management skills as well as identify opportunities to lead more effectively.

The Elevate program for Director-level and above associates works to solidify our talent pipeline and promote the success of the organization’s future leaders.

Our Learning & Development teams partner with key groups such as Sales, Operations, Transportation and Environmental Health & Safety to develop role-based training to drive greater productivity and safety.

We also offer associates additional learning and career development opportunities that extend from skills-based training deployed electronically through our BetterU learning system, to mentorship programs and career development discussions and beyond.

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Additionally, we provide to eligible associates a leading edge, no-cost wellness program, paid time off programs including paid parental leave, an employee assistance program, 401(k) plan, a back-up childcare program, and a recently enhanced education assistance program.

Diversity and Inclusion

We pledge to promote equity, celebrate diversity, dismantle systemic racism and support justice and inclusion for all.

Our Board of Directors is diverse in gender and ethnic background, as well as having a broad range of experience, with four out of 11 directors identifying as female, two members identifying as African American, one member identifying as Asian American and one member identifying as LGBTQ+.

Diversity, Equity and Inclusion

We pledge to promote equity, celebrate diversity and support justice and inclusion for all.

We recognize that innovation thrives when there is unity and respect for diverse backgrounds and perspectives.

Additionally, we aim to foster a culture of belonging, equity and empathy through open dialogues, educational opportunities and by honoring the experiences and special events that speak to our associates’ many identities.

We built a diversity and inclusion team, and our diversity and inclusion strategy is built on a foundation of research, best practices and leadership commitment.

Our Vice President of Diversity and Inclusion oversees our diversity and inclusion efforts and our diversity council takes an active role in advocating for and celebrating diversity and inclusion, as well as overseeing belonging and innovation groups.

We provide helpful diversity and inclusion information on our associate platforms including diversity and inclusion training.

Additionally, our UCount campaign encourages associates to self-identify and our Real Talk program offers a series of conversations on various dimensions of diversity.

We built a Diversity, Equity and Inclusion (“DEI”) team, and our DEI strategy is built on a foundation of research, best practices and leadership commitment.

Our Vice President of Diversity, Inclusion, Equity and Wellbeing oversees our DEI efforts, inclusive procurement initiatives and wellbeing programs.

Our diversity council and seven associate-led Belonging & Innovation Groups actively strive to create a workplace where all associates feel welcome and are motivated to reach their full potential.

We developed a multi-pronged approach to educate and engage associates that includes open discussions on various dimensions of diversity, a podcast, DEI trainings on our associate platforms, targeted volunteerism, and campaigns encouraging respect and empathy.

Creating a Safe Environment

Safety is at the forefront of everything we do.

We continue to focus on the safety of our associates, customers and communities with enhanced sanitation and increased safety measures.

We also have invested in several initiatives, including the development and implementation of a new safety brand and pledge, Every Moment Matters, that is designed to foster a caring culture, the implementation of interactive and proven training programs, which were rolled out across our network, and enhanced safety auditing.

In fiscal 2022, we created a new role and hired a new Senior Vice President, Occupational and Food Safety.

We continue to focus on the safety of our associates, customers and communities with increased safety measures.

We continue to be committed to continuous learning and improvement, and we believe in the power of learning from past experiences to enhance our safety system and performance, including through root cause incident analysis.

We also continue to invest in our safety brand and pledge, Every Moment Matters, which is designed to foster a caring culture, the implementation of interactive and proven training programs, which were rolled out across our network, and enhanced safety auditing.

This past year, we focused on creating an audit ready everyday culture;

improving our audit scores, sanitation practices, and overall customer satisfaction.

During fiscal 2023, we added additional data analytic tools to continuously monitor and report on fleet safety performance metrics.

We integrated new safety performance dashboards that allow management to monitor fleet safety metrics at the corporate, regional, and individual site level.

These tools allow us to better identify and respond to unsafe driving behaviors and recognize drivers who demonstrate safe driving habits.

Overall product sales are fairly balanced throughout the year, although demand for certain products of a seasonal nature may be influenced by holidays, changes in seasons or other annual events.

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What changed 10-K

Item 1. Business