IGA, Unified Eye Expansion in West

ELLIOT ZWIEBACH

CHICAGO — IGA here said last week the addition of Unified Grocers as its 13th U.S. distributor will enable the alliance to significantly expand its banner and fill geographic gaps in its distribution.

Unified, based in Los Angeles, is a member-owned cooperative with the bulk of its distribution in California, Oregon, Washington and Arizona.

“When Fleming folded [in 2004], we lost a major distributor in those areas,” said Mark Batenic, president of IGA U.S. “Although C&S did pick up some of that business in Northern California, this deal with Unified is a huge opportunity.

“This is a match that complements IGA's current distribution very well, a major step in our growth strategy and just one more example that IGA is on the move.”

The addition of Unified to its licensed distributors is “another step in our efforts to bring quality independents to the IGA banner for the benefit of consumers,” Batenic told SN. “But it's not just growth for growth's sake. We want to add independents who can bring value to the name and to whom the name can provide value.”

Batenic told SN he sees the potential over the next few years for “several hundred” of Unified's 3,100 stores to adopt the IGA banner.

He also said IGA is in talks with other distributors to join IGA, though he declined to name any of them.

Al Plamann, president and chief executive officer of Unified, told SN last week his company has not set any short-term goals for building the IGA banner among its membership. “We'd be happy if we could supply 50 new IGA stores by the end of 2008 and get 10 or 20 members with established brands to adopt the banner to see how it works,” he said.

Unified already supplies approximately 25 IGA stores in California, Washington and Arizona, he noted.

Unified's agreement with IGA allows it to supply groceries to independents in its marketing area that bear the IGA banner and to offer the banner to its retailers.

Plamann said Unified is interested in affiliating with IGA for three reasons: “First, we already have a number of customers in the Pacific Northwest, Arizona and Southern California that buy from us that already carry the IGA banner. Second, there are quite a few retailers — in rural areas especially — for whom I believe the IGA banner could be very strong. Third, there are IGA retailers in certain areas, especially in Washington, that we would like to try to serve.”

Unified will continue to try to work with members to pursue their own particular strategies “rather than trying to sell the new brand,” Plamann said.

“But in cases where a retailer is struggling and we believe IGA could help turn his business around, it would be an easy sell. Or, if there were a change in ownership, the IGA banner could provide a fresh start.”