After more than 35 years in business, Tree of Life is known as a leader in natural, organic and specialty food distribution. Unfortunately, the company hit a rough patch a few years ago, and needed a fresh vision. With a new president, a new senior team, significant IT investments, and a bold new strategy, 2009 looks to be a good year.
Tree of Life began in the late 1960s as a single shelf of natural food products in a family-owned grocery store in St. Augustine, Florida. As the market for natural food products grew, the company quickly transformed from a retail store into a thriving distribution business.
Today, Tree of Life, now owned by Dutch-based Royal Wessanen, distributes to natural food retailers and supermarkets across the US. The company expanded and enjoyed strong profitability until 2002, but experienced its first downturn in 2003, with sales dropping from approximately $1.8 billion to $1 billion. According to president and CEO Richard Lane, the drop in revenue was due, in large part, to the company’s rapid growth through a string of small-company acquisitions which operated independently of one another.
After Lane took over operations in 2006, a new senior management team was installed and with it, a fresh direction for the company. The mission was simple but powerful: Delight the customer every day. And Tree of Life is doing just that—the company is better than ever with strong vendor partners, coast-to-coast distribution, and a dedication to customer service.
To fulfill the mission, Lane implemented a three-part strategy. “The first step was to focus on the basics,” he said. “We had to streamline and create efficient warehousing, transportation, procurement, and in-store stocking services.”
The second part of the plan focused on product knowledge. To handle an inventory of more than 40,000 items, the company expanded its category management team. The team developed a Smart Assortment program, where in-house experts use demographic, market trend, and point-of-sale data to create custom product plans for individual stores.
“It allows us to advise retailers, based on their demographics, which items should go on their shelves,” Lane said.
The third leg of the plan involved transparency. Tree of Life holds its relationships with vendors and retailers sacred, and to keep these partnerships strong, Lane and his team build trust by keeping interactions transparent. Through an online portal called Oak, vendors and customers can see an unprecedented amount of information, helping suppliers and retailers improve their sales performance and their bottom line.
To further strengthen relationships, Lane and his team pride themselves on being flexible. Because the team services both the supermarket and natural food store channels, individual customer needs vary.
“We try to provide the customer with exactly what they need,” Lane said. “We’ll ship a full case, a half case, or a single box. We also provide in-store services where our employees will go to a store, write an order, stock the shelves, and rotate product, but if a retailer prefers to do that, that’s fine too.”
As part of its new business plan, Tree of Life invested in several IT products, including Aspen, a proprietary hand-held ordering system that gives 1,100 of the company’s field sales associates unprecedented access to product information.
Features of the $4 million custom-designed application include real-time inventory levels, order and credit creation, on-line catalogs, customer authorized lists, product look-up, and sales history to help guide ordering decisions.
Lane said Aspen is more than just a new ordering machine. “It’s redefining how we interact with retailers. It puts an enormous amount of instant information in the hands of our associates at store level, and saves everyone time and money.”
To increase warehouse efficiency, Tree of Life installed horizontal carousels. Employees can fill multiple orders at once because the carousels bring selected products to a “pick” spot. Before, an employee would have to walk the aisles, picking each product by hand.
Another way Tree of Life is improving efficiency is through a growing green initiative. “We’re dedicated to our core values and strengths: extensive knowledge of the industry, expertise in efficient distribution, and supporting a healthy and environmentally responsible way of life,” Lane said. “We’re upgrading our technology and reducing our carbon footprint. We’ve streamlined our truck routes to reduce emissions and save transportation costs. We’ve added better recycling programs in our corporate office and warehouses. Next, we’re going as paperless as possible with our invoicing system. Not only is sustainability the right thing to do, it’s the smart thing. It all adds up to a streamlined, more efficient, more successful company.”
Looking to the future, the team at Tree of Life plans to grow its product mix. Until recently, the company primarily distributed shelf groceries with a limited selection of frozen and refrigerated foods. This year, it’s adding a wide array of deli and cheese items, organic wine and beer, and expanding Tree of Life-owned brands.
“The formula we used to get back on track is the same one we’re using today—keep our eye on the bottom line, invest in the best technology, encourage our employees to act like owners, and provide customers with top-notch service that helps them grow their businesses,” Lane said.
It’s that dedication to providing excellence that’s re-energized Tree of Life and put this once struggling company on the path to prosperity.