UNFI President Christopher Testa to depart

United Natural Foods Inc. (UNFI) President Christopher Testa is slated to leave the company next week, with CEO Sandy Douglas adding the president’s title.

Providence, Rhode Island-based UNFI disclosed Testa’s planned exit on Tuesday in an 8-K filing with the Securities and Exchange Commission (SEC). Plans call for Testa, who also served as president of UNFI Services, to step down on Oct. 13.

UNFI confirmed the upcoming departure of Testa on Tuesday in an email to Winsight Grocery Business. With the move, UNFI Services—encompassing supplier services and merchandising, professional services and the company’s Brands product platform—will report to Louis Martin, president of wholesale.

“In a continued effort to improve execution and results, better align and simplify our organizational structure, and support our customer- and supplier-focused multiyear transformation plan, we have made the decision to combine our services and wholesale platforms,” Douglas said in a statement. “This alignment of our sales, services, brands, merchandising and digital teams will enable us to move with greater speed and alignment in support of the continued growth of our customer and supplier partners.”

Chris Testa, outgoing president of United Natural Foods Inc. and president of UNFI Services. / Photo courtesy of UNFI

Related:UNFI closes out fiscal 2023 with disappointing 4th quarter

Testa has served as UNFI president since Aug. 1, 2018, after being promoted that May from the role of president of the Atlantic region. In that post, he also oversaw the grocery wholesaler’s U.S. broadline natural, organic and specialty distribution business—as well as select nutrition and e-commerce, enterprise sales and service—and continued to direct branding and communications.

His duties were expanded in March 2020 to include oversight of supplier services, professional services, the Brands business and UNFI’s Canadian business. Then in mid-July 2022, as part of a leadership reorganization, Testa added the title of president of UNFI Services, overseeing supplier services, professional services, e-commerce and private brands. He joined UNFI in August 2009 as president of the Blue Marble Brands division.

“On behalf of our entire senior leadership team, I want to thank Chris for his tremendous service and leadership over these past 14 years, and I wish him all the best as he embarks on a new chapter,” Douglas added.

UNFI said Douglas adds the president’s title effective Oct. 13. He became UNFI CEO and joined the distributor’s board in August 2021 with the retirement of Steven Spinner. Before coming to UNFI, he served as CEO of Staples and as president of Coca-Cola North America.

Related:UNFI refreshes board and plans financial review of company

UNFI looks to shore up performance, accelerate transformation

The ouster of Testa comes in the wake of disappointing quarterly financial reports and reorganizations at UNFI.

Just before reporting fiscal 2023 fourth-quarter earnings last week, UNFI named three new independent board members—under a cooperation agreement with JCP Investment Management—and announced plans for a board-led financial review of the company. The wholesaler posted a net loss for the fourth quarter and a noticeable drop in net income for the full year, while sales growth tailed off for both periods. The company forecasts a GAAP net loss per share for fiscal 2024.

Douglas had cited “deep disappointment” with fiscal 2023 Q3 results and unveiled UNFI’s transformation agenda in Q2 upon reporting a plunge in earnings. The Q2 report had sent UNFI’s stock price plummeting, and nearly three weeks later investors filed a federal class-action lawsuit against UNFI, claiming the company violated U.S. securities laws by failing to disclose key business information, which ended up pulling down its share price.

About a week after the Q3 report, UNFI announced plans to consolidate from four operating regions to three—East, Central and West, compared with the previous Atlantic, South, Central and Pacific operating units. With the restructuring, about 150 positions—mainly management and supervisory posts—were earmarked for termination.

Related:UNFI to cut 150 jobs as it streamlines regional operating structure

UNFI CEO Sandy Douglas is set to add the president's title later next week. / Photo courtesy of UNFI

And back in July 2022, UNFI unveiled a new leadership and organizational structure comprised of four growth platforms—services, wholesale, retail and corporate/business transformation—linked to the distributor’s strategic priorities. The move made Testa head of UNFI services and positioned him and four other C-suite executives—Steve Dietz, chief customer officer; Mark Bushway, chief supply chain officer; Jack Clare, chief information officer; and Mike Stigers, CEO of the Cub Foods retail unit—in leading roles in the revamped organization. Clare and Stigers have since left the company.

“Fiscal 2024 is an important year as we emerge from three years of unprecedented volatility and look to reset our profitability in the near term, while investing in critical foundational skills, infrastructure and capabilities that we believe will accelerate growth in sales and profitability for UNFI, our customers and our suppliers,” Douglas told analysts last week in a call on Q4 results. (Call transcript provided by AlphaSense.)

The CEO outlined UNFI’s transformation plan, which focuses on supply-chain optimization and automation, commercial value creation for customers and suppliers, enhancing the digital offering, and technology infrastructure unification and modernization. He noted that, since the Q3 call, UNFI has captured nearly $100 million in value creation on a run-rate basis and raised the near-term projected benefit to $150 million from the $100 million target cited in June.

“There have been and continue to be challenges that impact the entire food industry but, we’re taking decisive action to strengthen the business and drive improved performance. We run a complex business and know the path forward will take time, tenacity and discipline and that will need to be adaptable along the way. But we also know the way to fully realize our vision and maximize shareholder value creation is through a proactive combination of near-term action and the multiyear transformation path that I’ve outlined,” Douglas said. “And finally, with the steps we’re taking to continue to strengthen both our leadership team and our board, we’re positioning our company to capture the significant, profitable growth opportunities that lie ahead.”

*Editor's Note: Article updated with UNFI financial and background information.