UNFI
#We made a very conscious decision to be very proprietary about how we release that information, because, as you might expect, there is a competitive part of that question that we'd just rather not talk about which DCs and when.
But you guys know the DCs that we fill with refrigerated capacity, and those are going to be the markets that have the greatest speed to market with this group of products.
Yes, <UNK>, and I would tell you that while we did see some deflation challenges with Albert's, given their portion to the overall business, it did not have a meaningful impact on our overall inflation number.
And what we've seen in the fourth quarter, some of the increases that we saw from an inflationary standpoint in the third quarter were in place for a good part of the quarter.
So these aren't recent price increases.
They sort of started in the March time frame.
So I would tell you that what we're ---+ barring some major changes when we get to run the data when we close the month ---+ I would tell you that most of what we're seeing now is volume and not price in the first four or five weeks of this quarter.
Yes, I mean, I would say that it certainly appeared that way.
We didn't see anything that was noticeable.
There may have been instances with an individual customer.
But when you look across the broad swath of customers in each channel, it certainly appeared that it was across all the channels.
I don't think so.
The reality is we sell most of them, to one degree or another.
I think when you look at our capabilities on internet fulfillment, which is pretty stunning, we expect some pretty spectacular growth in that channel over the next couple years.
And again, my opinion, as I look out over the next year, year and-a-half, there's been this massive migration.
And it's just not mass and drug.
It's convenience store.
It's so many points of retail.
We were looking at an organic item here in the room that came from a hard goods retailer.
Home goods.
And so I believe that we're going to get to a point where a lot of these retailers, non conventional, in other words, non conventional organic and natural retailers, who have run to add SKUs are going to wake up one day and say, wait a second, these items, they don't move as fast as we'd like.
And so I think that a lot of those SKUs are ultimately going to find their way back to UNFI.
I think people are reacting to what they think is customer demand, and they're placing the SKUs into stores and retail points that, if you were to ask us five years ago whether 7-Eleven would have an organic protein bar, we would have said it's probably not going to happen.
But will there be enough demand to keep the products in those types of retail points.
I think that the answer is probably not.
And we will get an influx of the items back to within our distribution network.
When it happens, I'm not sure, but I believe that that is what will take place.
Yes.
Adjusting for where Easter shifted, yes.
So we had to adjust our numbers to reflect having Easter be earlier and having a strong week and a good week there and a little bit of softness into April.
But you take those weeks into the mix and adjust accordingly and it tended to be the end of March, beginning of April.
Well, I mean, I think that, Andy, there's an element of it where certainly some of our DCs were still getting up to speed.
We had some ---+ we'll have some of the benefit in the fourth quarter associated with the new Twin Cities location versus where we were, and we're moving business that was handled from other locations into that facility.
So we'll get some benefit there.
But yes, we've certainly ---+ we certainly, as we've had turnover within the DCs, if we're not growing at the same rate, we're not replacing all of those heads.
<UNK> mentioned before that when we saw things ---+ certainly it was a much greater degree in 2008, 2009, but when we saw sales growth slow, we started managing the expenses based on that run rate.
So we've taken that approach going into the fourth quarter, and we started addressing it during the third quarter.
But again, it happened much more quickly than we anticipated, so you weren't able to completely keep pace in the third quarter.
We're not going to help you there, Andy.
It's other distributors.
It would be hard for me to comment on the profitability of any one customer.
I'm not sure that would be fair to talk about that.
I think that the tipping point is to continue to slowly but surely win new pieces of business in the geographies in which we've built the capacity.
And the second side is to make the right acquisitions that we can fold in to the buildings that we built the capacity for.
So I think those are the two areas that I would kind of refer to as the tipping points.
Our Albert's business, we've converted to run up underneath our Tony's fresh platform.
That's now completed.
And so now we have a produce, a protein, a cheese, an added value fresh product offering in a large swath of the United States.
And I would look forward to additional customer wins, and I would look forward to some pretty interesting M&A within the space.
Okay.
Thank you, everybody, for joining us today for our third quarter 2015.
We look forward to speaking with you again for the conclusion of our FY15 and our guidance on FY16.
Thanks and have a great day.
