US food distributors announce major acquisitions

Published on
July 31, 2018

Two major food distribution mergers will undoubtedly change how seafood is procured and distributed in the United States.

On Monday, 30 July, Rosemont, Illinois-based US Foods said it will acquire five companies under the Services Group of America (SGA) umbrella, for USD 1.8 billion (EUR 1.5 billion) in cash. US Foods, which carries a wide range of seafood items including “Serve Good” sustainable options, is acquiring Food Services of America (FSA), one of the largest regional broadline distribution companies in the United States, specializing in servicing independent restaurants.

The deal also brings Systems Services of America, a foodservice distributor that specializes in casual, fast-casual, and quick service restaurants chains, to US Foods. Other distributors that are part of the deal include Ameristar Meats, a provider of custom meats and Amerifresh, which specializes in produce sourcing and marketing.

Plus, late last week, Providence, Rhode Island-based United Natural Foods said it was buying Supervalu in Minneapolis, Minnesota, a food distributor and operator of more than 3,000 grocery stores.

The newly-formed company is expected to grow the reach of sustainable and responsibly-sourced seafood products, in addition to other natural foods. At the same time, UNFI said that it would divest Supervalu’s retail stores over time.

"Combining our leading position in natural and organic foods with Supervalu's presence in fast-turning products makes us the partner of choice for a broader range of customers. Together, we can provide our ‘better for you’ products as well as other high-growth segments, improving customers' competitive advantages in a dynamic marketplace,” said Steve Spinner, chairman and CEO of UNFI, in a statement.

Meanwhile, US Foods’ stock dropped 16 percent in morning trading on 30 July because of disappointing second quarter earnings. While its net income surged from USD 65 million (EUR 55 million) for the second quarter last year to USD 126 million (EUR 108 million) this year, total case volume declined by 0.9 percent and revenue was flat at USD 6.16 billion (EUR 5.3 billion).

Still, US Foods Chairman and CEO Pietro Satriano said in a press release that the acquisition will “significantly increase US Foods’ reach across key markets in the attractive and growing Northwest region of the U.S. and adds one of the most well-regarded regional distributors to our company.”

US Foods did not respond to SeafoodSource’s requests for comment.

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