Named by Forbes Magazine One of America's Best Managed Companies in 2005 and One of America s Best Big Companies in 2006

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1 Named by Forbes Magazine One of America's Best Managed Companies in 2005 and One of America s Best Big Companies in 2006 June

2 Forward-Looking Statements and Discussion of and Reconciliation of Non-GAAP Information Safe Harbor Regarding Forward-Looking Statements Please note that this presentation was created as of June 2, 2006, and reflected management s views as of that date. This presentation contains certain statements and projections that are forward-looking statements within the meaning of the Securities Act of 1933, the Securities Exchange Act of 1934 and the Federal Securities Litigation Reform Act of 1995, which represent the Company s expectations or beliefs concerning future events. Although the Company believes that its expectations are reasonable, it cannot and does not give any assurance that such expectations will prove to be correct. Certain phases of the Company s operations are subject to influences and factors outside its control as described in the Company s reports on Forms 10-K and 10-Q and other filings with the Securities and Exchange Commission. Any one of these factors or any combination of these factors could materially affect the results of the Company s operations, and cause actual results to differ materially from the Company s expectations. The Company may update or revise these projections from time to time but is under no obligation to do so. Discussion and Reconciliation of Non-GAAP Information This presentation also includes certain non-gaap information. Included on the Company s website is a reconciliation of the non-gaap Information to the most relevant GAAP information and an explanation of why management views the non- GAAP information as relevant. 2

3 Wholesale Distribution to the Natural Products Industry Diversified sales base of approximately 20,000 customers in every class of trade with more than 40,000 different products Servicing customers nationwide from 17 distribution centers Sophisticated inter-regional logistics system Over 4,400 associates 3

4 Attractive Industry Fundamentals $51 billion industry fueled by sustainable consumer trends Fastest growing sector of overall food industry 9% growth rate versus 0% - 2% for overall grocery industry Represents approximately 9% - 10% of grocery and related sales Driven by demand for healthy lifestyle Competition One national competitor Wessanen (parent company of Tree of Life) Regional competitors Nature s Best, located in Southern California 200 plus regional distributors 4

5 Percent of Distribution Sales by Channel Approximately 18% to 19% growth rate forecast in FY2006 Strong growth in the three major customer channels Supernaturals SuperMarket Independents Supernaturals - Includes two national natural product supermarket chains (Whole Foods Market, Inc. and Wild Oats Markets, Inc.) Independents - Range from mom and pop to regional chains and buying clubs SuperMarket - Includes conventional supermarkets, mass merchandisers, club stores, and convenience stores Other - Food service, international and non-distribution divisions Super Market Independents 47% 13% Other 4% Supernaturals 36% 5

6 Multiple Competitive Advantages Largest natural products distributor with national infrastructure Most efficient distributor of Natural and Organic products Larger distribution centers with more freezer / cooler capacity Largest product selection (more than 40,000) supplying all store departments National purchasing power with regional marketing Key relationships with leading natural products retailers Sub distribution arrangements with Food Service distributors Strong management team Highest service levels in natural products industry 97%+ order fulfillment rates Same day/next day delivery 6

7 Largest Distributor with Nationwide Presence Wholesale Locations Albert s Organics Hershey Import Natural Retail Group 7

8 Investment in Warehouse Capacity Over the past five years, we have invested over $150 million in distribution capacity and infrastructure improvements. We have increased our capacity by 124%, or close to 1,900,000 square feet: Fiscal 2006 New facility in Rocklin, California replacing two facilities in Auburn, California Fiscal 2005 New facility in Greenwood, Indiana Fiscal 2004 Iowa City, Iowa, Dayville, Connecticut and Aurora, Colorado expansions Fiscal 2003 Chesterfield, New Hampshire expansion and Aurora, Colorado modernization Fiscal 2002 Atlanta, Georgia and Fontana, California Fiscal 2001 New Oxford, Pennsylvania expansion Approximate capacity utilization of approximately 70% with 3.5 million square feet of warehouse space 8

9 Largest Product Selection Supplying All Departments Over 40,000 high-quality products in all retail categories Introduce new products per month National, regional, private label assortment 65% common across the company Highest quality control assurance QAI (Quality Assurance International) certification Reaffirms our purpose and commitment to natural and organic products Bulk & Food Service Products Produce/Perishables 19% Personal Care Items Nutritional Supplements & Sports Nutrition 6% 7% 8% Frozen Foods 12% 48% Grocery/ General Merchandise United Natural Foods Is Not Dependent on Any Single Category or Supplier 9

10 Growth Opportunities Sales growth opportunities within existing channels UNFI branded products Growing at 50% annually Target of 5% of net sales by FY 2008 Fragmented industry offers acquisition opportunities UNFI has completed 30 acquisitions since 1985 New sales channel opportunities Food service International 10

11 Financial Highlights 11

12 Strong Operating Performance ($ in millions) Net Sales Operating Income* $2,500 $2,000 $1,500 $1,000 $500 $0 CAGR=16.6% $2,060 $1,380 $1,670 $908 $1,016 $1, $75 $65 $55 $45 $35 $25 $15 $5 -$5 CAGR=21.0% $73 $60 $42 $46 $31 $ Years Ended July 31 Years Ended July 31 *Excludes special items 12

13 ($ in millions) $650 $600 $550 $500 $450 $400 Recent Financial Performance Net Sales $601 $576 $543 $534 $505 $478 $449 $446 $393 $381 $637 $350 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 Sales Growth 30% 28% 26% 22% 23% 23% 22% 25% 19% 22% 21% 19% 19% 18% 16% 14% 10% 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 13

14 Operating Margin* (Percent) Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 *Amount in Green represents operating margin excluding special items. Amount in Blue represents operating margin excluding special items and share-based compensation. 14

15 Working Capital Days Sales Outstanding Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q Days In Inventory Q04 2Q04 Q304 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 15

16 Balance Sheet Strength As at As at April 29, July 31, % ($ in millions) Change Total Assets $ $ % Total Equity $ $ % Debt to Equity % Return on Total Capital* 20.8% 20.0% 4.0% Return on Equity* 13.7% 14.2% (3.5%) Enterprise Value $1,527.0 $1,587.0 (3.8%) *Excludes special items and share-based compensation 16

17 Comparative Stock Performance Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Stock price as of base period NASDAQ S & P 500 UNFI Natural & Organic Index* (Composite) Wholesale Distributor Index** (Composite) July 31, , , $33.72 $ $ Nasdaq Composite S & P 500 UNFI Natural & Organic Index* Wholesale Distributor Index** * The Natural and Organic Index includes: Wild Oats Markets, Inc., Whole Foods Market Inc., Hain Celestial Group Inc., Lifeway Foods and SunOpta Inc. ** Wholesale Distributor Index includes Performance Food Group, Supervalu Inc., Sysco Corp and Nash Finch Co. 17

18 Recent Financial Performance DAILY DATA: April 1, 2005 through April 29, , Volume (in thousands) 3,000 2,000 1, Price ($) - 24 Apr May Jun Jul Aug Sept Oct Nov Dec Jan Feb Mar Apr United Natural Foods Inc.: Price (right axis) United Natural Foods Inc.: Volume (left axis) Stock Price (1) $ A FYE EPS (2) $0.99 Market Cap (mm) $1, P FYE EPS (3) $1.08 Firm Value (mm) (4) $1,532.8 Firm Value/LTM Revenue (4) 0.68 (1) Stock price and Market Cap as of 04/29/06. (2) 2005A FYE EPS is presented before special items. (3) 2006P FYE EPS is Wall Street analysts median estimate quoted from First Call as of 5/16/2006 which includes stock-based compensation. (4) Firm Value as of 04/29/06; LTM: Last twelve months. 18

19 UNFI Fiscal 2006 Guidance Top line growth of approximately 18% to 19% over fiscal 2005, or $2.42 billion to $2.45 billion. EPS, excluding special items, of $1.08-$1.10 per diluted share. Anticipated share-based compensation expense of approximately $5.5 million to $6.2 million pre-tax, or $0.08 to $0.09 per diluted share after taxes. Capital expenditures of $18 - $23 million. 19

20 UNFI Guidance (continued) Historically, interest rate swaps, distribution facility expansions, distribution facility relocations and asset impairment charges (including goodwill) have been classified as special items. However, at this time we do not know the extent or significance of these items or whether the Company will in fact incur any of these items in fiscal The Company s guidance is based on a number of assumptions, which are subject to change and many of which are outside the control of the Company. If any of these assumptions vary, the Company s guidance may change. There can be no assurance that the Company will achieve these results. 20

21 NASDAQ: UNFI Named by Forbes Magazine "One of America's Best Managed Companies in 2005 and One of America s Best Big Companies in