March 17, 2020
Dear Valued Customer:
To reiterate what we’ve stated in our previous communications, UNFI remains committed to informing you of any new or relevant information related to COVID-19; here is the latest information and our actions in support of your stores.
COVID-19 is a dynamic situation with far-reaching implications as seen by the recent school closings and cancellation or postponement of major events. The situation has impacted all of us personally and our businesses and communities; we sincerely hope all our customers are managing this event to the best of their abilities and staying safe. Our industry has consistently demonstrated its resilience and adaptability and these recent events are bringing us closer to our consumers and their changing behaviors. With over 25,000 grocery customers, UNFI understands we’re a critical link in the overall supply chain and we take seriously our responsibility to provide food to North American consumers. Yesterday, UNFI CEO Steve Spinner participated in a call with President Trump and White House officials, reaffirming our commitment to meet the needs of customers and consumers across the country. You can read about it here.
All decisions we’re making are rooted in doing the very best to serve our customers while ensuring the safety of our 21,000+ associates and continuity of our operations. I’m extremely proud of our teams’ response to the increased volume on all fronts and, particularly, in support of you, our customers. Please know, we continue monitoring the latest CDC and FDA information, and are taking necessary precautions to keep all our stakeholders safe during this unique situation
Unprecedented product demand continues to build. The COVID-19 volume surge has now impacted all UNFI DCs, and some warehouse locations are receiving orders for 200-500% of normal demand. In addition to historic demands for previously mentioned “pantry loading” SKUs, we are now experiencing surges on additional product categories as consumers adapt to eating more at home and school children being home. This shift of consumer behavior is generally desirable for our industry, but the sudden demand has outpaced ability to absorb within our current supply chain. This has put pressure on our operations team and on certain products and categories and we are taking the following steps to build product inventories and continue working diligently with suppliers to secure critical products.
In some cases, there are suppliers who were producing product for UNFI (such as hand sanitizer production) but have recently been asked to shift their inventories to support government needs. This is a necessary change and one we recognize and support. We are also managing the capacity labor constraints in our DCs. I am very proud of the effort our warehouse and driver associates have displayed by working extremely long hours to accommodate demands. We have added resources in some locations but, given the extreme lift of volume, we must have to make short term adjustments to orders to meet our capacity and supply constraints and avoid future service disruptions. Adjustments will vary by DC and be based on total available labor hours and available inventory. Our goal is to continue to service all customers in a systematic manner during this time. We have spoken to many of our customers about these constraints and we appreciate the understanding and cooperation we have received from our partners. We have also suspended all non-critical operations and projects to focus on servicing our customers.
We have created and continue to adapt business continuity plans including preparing for all situations. This means we are readying ourselves for a scenario in which we might have to temporarily close a facility or shift work due to a health event or environmental constraint (i.e. travel restrictions). To ensure we protect our associates and maintain operations, we’ve taken further preventative measures and made several key decisions this week, including:
• Social distancing – we’ve communicated and implemented plans to minimize participation in any large group meeting, as well as eliminated all non-essential business travel
• Remote work preparation – out of an abundance of caution we’re preparing those associates who have the capability to potentially work remotely
• Minimizing office meetings with outside vendors/customers – we are reducing in-person meetings at our offices and facilities to only those that are essential, and seeking alternative means for conducting business partner meetings
• Tacoma office closure – we’ve closed our Tacoma office and asked all associates to work remotely for the next 14 days, as the state of Washington continues to be one of the more high-risk areas
• Engaging professional cleaning companies to conduct deep cleaning in our distribution centers and office facilities to help ensure a safe working environment for our associates
We know this is a rapidly-changing, dynamic, and quickly-evolving situation. We are on top of it. Your success and ability to support your communities is why we come to work every day. COVID-19 and all the corresponding consumer behavior remain unpredictable, but please know we will continue adapting to meet your needs. Thank you for your understanding and continued support.
President and Chief Marketing Officer