Wild Oats Markets, the US-based natural and organic foods retailer, has signed a distribution deal with the Dutch food producer Koninklijke Wessanen whose Tree of Life unit already distributes natural food products throughout the US.
"Over the past several months we have been conducting a thorough review and analysis of our current distribution system and supply chain. The objective of this process was to determine the best distribution partner and system that will enable Wild Oats to optimise our overall supply chain, leverage our purchasing power, reduce costs and improve service to our stores," said Perry Odak, president and CEO of Wild Oats Markets.
"Tree of Life was selected as our distribution partner due to their extensive distribution and logistics expertise, as well as their advanced information systems and distribution technology. Tree of Life was able to provide us with competitive pricing and terms, and an ability to meet not only our current distribution and supply chain needs, but also future needs as we continue to grow our business."
Wild Oats said the new distribution relationship would reduce current procurement and distribution costs through competitive product costs, consolidated management of freight and logistics and reduced store expenses through consolidated deliveries. Tree of Life will also commit resources for marketing support, product line expansions, performance standards and growth objectives.
The three-year agreement with Tree of Life will commence on 1 September 2002 when Wild Oats' current distribution contract expires.
"Ultimately, we want a supply chain partner that will help us be a leader in the natural and organic products industry as we continue to grow our business," said Odak. "We are making a change in our business that we believe will have substantial long-term benefits for our company and for our industry. Our strategic partnership with Tree of Life will accelerate the advancement of the natural and organic products industry's current distribution systems, and we are confident this will be a competitive advantage for us in the future."
Once the transition is complete, Wild Oats anticipates improved service for its stores with consistent, reliable product availability and more seamless service with consolidated store deliveries, advanced receiving systems and a unified pricing structure. The company is confident that it will improve these and other service levels as a result of Tree of Life's extensive North American distribution system and experience working with numerous national retail accounts.
Tree of Life's core distribution and logistics competencies, coupled with Wild Oats' recent centralisation of procurement functions, will further enable Wild Oats' store management personnel to focus on store-level operations and customer service rather than product purchasing, Odak said.
"We are committed to providing Wild Oats with exemplary customer service and logistical support for each of its locations," said Richard A. Thorne, chairman of Tree of Life. "Both organisations' management teams have significant experience executing and managing large-scale changes in distribution strategies and, as a result of thorough planning, we believe the transition will be seamless. Our experience working with companies of this size and scale, both nationally and internationally, will enable us to meet the needs of Wild Oats, both now and as the company accelerates its growth going forward."
Tree of Life is the world's leading marketer and distributor of natural and speciality foods, serving more than 20,000 retail customers. With a strong base in the US and Canada, the company has recently expanded into western Europe.