1. Vision for the Future
Investor Presentation
November 2006
United Natural Foods 1
2. Forward-Looking Statements and Discussion of
and Reconciliation of Non-GAAP Information
Safe Harbor Regarding Forward-Looking Statements
Please note that this presentation was created as of October 31, 2006, and reflected
management’s views as of that date. This presentation contains certain statements
and projections that are “forward-looking statements” within the meaning of the
Securities Act of 1933, the Securities Exchange Act of 1934 and the Federal Securities
Litigation Reform Act of 1995, which represent the Company’s expectations or beliefs
concerning future events. Although the Company believes that its expectations are
reasonable, it cannot and does not give any assurance that such expectations will
prove to be correct. Certain phases of the Company’s operations are subject to
influences and factors outside its control as described in the Company’s reports on
Forms 10-K and 10-Q and other filings with the Securities and Exchange Commission.
Any one of these factors or any combination of these factors could materially affect
the results of the Company’s operations, and cause actual results to differ materially
from the Company’s expectations. The Company may update or revise these
projections from time to time but is under no obligation to do so.
Discussion and Reconciliation of Non-GAAP Information
This presentation also includes certain non-GAAP information. Included on the
Company’s website is a reconciliation of the non-GAAP Information to the most
relevant GAAP information and an explanation of why management views the non-
GAAP information as relevant.
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3. Wholesale Distribution to the Natural
Products Industry
Diversified sales base of approximately 18,000 customers in
every class of trade with more than 40,000 different products
Servicing customers nationwide from 17 distribution centers
Sophisticated inter-regional logistics system
Over 4,500 associates
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4. Attractive Industry Fundamentals
$51 billion industry fueled by sustainable consumer trends
Fastest growing sector of overall food industry
9% growth rate versus 0% - 2% for overall grocery industry
Represents approximately 9% - 10% of grocery and related sales
Driven by demand for a healthy lifestyle, food safety concerns and
concerns over the impact on the environment
Competition
One national competitor—Wessanen (parent company of
Tree of Life)
Regional competitors
• Nature’s Best, located in Southern California
• 200 plus local and regional distributors
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5. Percent of Distribution Sales by Channel
Revenue growth of approximately 18.8% in FY2006
Strong growth in our major customer channels
Supernaturals
SuperMarkets
Independents
Foodservice
Supernaturals - Includes two national natural product supermarket chains
(Whole Foods Market, Inc. and Wild Oats Markets, Inc.)
Independents - Range from “mom and pop”
to regional chains
SuperMarkets - Includes conventional Other
supermarkets, mass merchandisers, Foodservice 2% Supernaturals
club stores, and convenience stores Super 2%
Markets 15%
Food service – Includes Sodexho, Aramark,
35%
Med Assets and the Compass Group
Other – International, buying clubs and
47%
non-distribution divisions
Independents
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6. Multiple Competitive Advantages
Largest natural products distributor with national infrastructure
Most efficient distributor of Natural and Organic products
Larger distribution centers with more freezer / cooler capacity
Largest product selection (more than 40,000) supplying all store departments
National purchasing power with regional marketing
Key relationships with leading natural products retailers
Whole Foods agreement runs through September 2013 (7yrs.)
Wild Oats agreement runs through March 2009 (5 yrs.)
Sub distribution arrangements
with Food Service distributors
Strong management team
Highest service levels in natural
products industry
97%+ order fulfillment rates
Same day/next day delivery
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7. Largest Distributor with
Nationwide Presence
Wholesale Locations
Albert’s Organics
Hershey Import
Natural Retail Group
Planned New
Distribution Centers
United Distribution West
United Distribution East
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8. Investment in Warehouse Capacity
& Technology
Over the past six years, we have invested over $150 million in distribution capacity and
infrastructure improvements. We have increased our capacity by 124%, or close to
1,900,000 square feet:
Fiscal 2006 – New facility in Rocklin, California replacing two facilities in Auburn, California
Fiscal 2005 – New facility in Greenwood, Indiana
Fiscal 2004 – Iowa City, Iowa, Dayville, Connecticut and Aurora, Colorado expansions
Fiscal 2003 – Chesterfield, New Hampshire expansion and Aurora, Colorado modernization
Fiscal 2002 – Atlanta, Georgia and Fontana, California
Fiscal 2001 – New Oxford, Pennsylvania expansion
New facilities planned for the Pacific Northwest, Florida and Texas in fiscal 2007 and
fiscal 2008, adding an additional 750,000 sq. ft. of distribution capacity.
Capacity utilization of approximately 75% with 3.5 million sq. ft. of warehouse space.
Installation of new technologies such as pick-to-voice and pick-to-light into existing
facilities to improve productivity, lower operating costs and reduce errors.
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9. Largest Product Selection
Supplying All Departments
Over 40,000 high-quality products in all retail categories
Introduce 150 - 350 new products per month
Largest vendor – Hain Celestial Group at approximately 8% of purchases
National, regional, private label assortment – 65% common across the company
QAI (Quality Assurance International) certification
Reaffirms our purpose and commitment to natural and organic products
Frozen Foods
Produce/Perishables
12%
19%
Personal Care Items Grocery/
6% General Merchandise
Bulk &
7%
Food Service Products
48%
8%
Nutritional Supplements
& Sports Nutrition
United Natural Foods Is Not Dependent on Any Single Category or Supplier
United Natural Foods Is Not Dependent on Any Single Category or Supplier
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10. Growth Opportunities
Sales growth opportunities within existing channels
UNFI branded products
Growing at 50% annually
Target of 5% of net sales by FY 2008
Fragmented industry offers
acquisition opportunities,
including branded product lines
UNFI has completed
30 acquisitions since 1985
New sales channel opportunities
Food service
International
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16. Balance Sheet Strength
As of As of
July 29, July 31, %
($ in millions) 2006 2005 Change
Total Assets $ 700.6 $ 651.3 7.6%
Total Equity $ 349.2 $ 295.5 23.0%
Debt to Equity 0.52 0.66 20.8%
Return on Total Capital* 21.0% 20.0% 4.7%
Return on Equity* 13.2% 14.2% (7.0%)
Enterprise Value $1,484.6 $1,587.0 (6.5%)
*Excludes special items and share-based compensation
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17. Comparative Stock Performance
.
240
230
220
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
FY03 FY04 FY04 FY04 FY04 FY05 FY05 FY05 FY05 FY06 FY06 FY06 FY06 FY07
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
Stock price as of July 31,
Nasdaq Composite S & P 500
base period 2003
UNFI Natural & Organic Index*
Wholesale Distributor Index**
NASDAQ 1,735.02
S & P 500 990.31
UNFI $15.29
* The Natural and Organic Index includes: Wild Oats Markets, Inc., Whole Foods Market Inc., Hain Celestial
Group Inc., Lifeway Foods and SunOpta Inc.
Natural & Organic Index*
(Composite) $61.64
** Wholesale Distributor Index includes Performance Food Group, Supervalu Inc., Sysco Corp and Nash Finch
Wholesale Distributor Index**
Co.
(Composite) $108.24
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18. Recent Financial Performance
DAILY DATA: September 1, 2005 through September 30, 2006
5,000 36
Volume (in thousands)
4,000
32
Price ($)
3,000
2,000
28
1,000
- 24
Sept Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sept
‘05 ‘06
United Natural Foods Inc.: Price (right axis)
United Natural Foods Inc.: Volume (left axis)
Stock Price (1) 2006A FYE EPS (2)
$30.99 $1.09
2007P FYE EPS (3)
Market Cap (mm) $1,309.59 $1.30
Firm Value (mm) (4) $1,495.81 Firm Value/LTM Revenue (4) 0.60
(1) Stock price and Market Cap as of 09/30/06.
(2) 2006A FYE EPS is presented before special items.
(3) 2007P FYE EPS is Wall Street analysts median estimate quoted from First Call as of 10/16/2006.
(4) Firm Value as of 09/30/06; LTM: Last twelve months.
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19. UNFI Fiscal 2007 Guidance
Top line growth of approximately 11% to 15% over fiscal
2006, or $2.7 billion to $2.8 billion.
Earnings per share, of $1.25-$1.30 per diluted share.
Anticipated share-based compensation expense of
approximately $5.5 million to $7.0 million pre-tax, or
$0.08 to $0.10 per diluted share after taxes.
Capital expenditures of $40 - $45 million.
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20. UNFI Guidance (continued)
Historically, interest rate swaps, distribution facility
expansions, distribution facility relocations and asset
impairment charges (including goodwill) have been classified
as special items. However, at this time we are not aware of
any special items that may be incurred in fiscal 2007. The
Company’s guidance is based on a number of assumptions,
which are subject to change and many of which are outside
the control of the Company. If any of these assumptions
vary, the Company’s guidance may change. There can be no
assurance that the Company will achieve these results.
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21. NASDAQ: UNFI
Named by Forbes Magazine
“One of America’s Best Big Companies” in 2006 and
“One of America's Best Managed Companies” in 2005
and ranked by Business Ethics as one of its “100 Best Corporate
Citizens for 2006”
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