Trophic becomes part of Planet Organic

Related tags Organic food Mergers and acquisitions Strategic management

The Canadian corporation Planet Organic, which owns large natural
food supermarkets in Edmonton, Victoria, Calgary and Port
Coquitlam, and a chain of supplement and market stores across
Canada, has acquired Trophic, a manufacturer and distributor of
vitamins, minerals and herbal supplements.

This acquisition is part of Planet Organic's plan of vertical integration within the natural products industry. The company plans to use its combined resources at the retail and manufacturing levels to better compete against large mainstream stores.

"This is our first vertical integration and will give us a bit more earning power and bring us closer to the consumer,"​ said Darren Krissie, vice president of corporate development and chief financial officer for Planet Organic.

Trophic, located in Penticton, British Colombia, will operate as a separate division headed by its existing management team.

"Vitamins and minerals are an important part of what we do and this acquisition will potentially bring us a strong private label and more access to profit lines,"​ said Krissie.

Planet Organic recently acquired Sangster's Health Centres, a 35-store chain with franchised and privately held outlets selling vitamins and supplements across Canada.

As for future growth, Krissie said that for the moment the company would be concentrating on Canada, but at some point they would move over the border and start investigating acquisition possibilities in the US. The company's objective is to consolidate the fragmented natural and organic foods industry in Canada and the US via acquisitions, mergers and new retail operations.

Planet Organic opened its first store in early 2002 in Edmonton.

"We're on track with our strategic plan to build Planet Organic into a corporation with annual sales of C$50 million in five to seven years,"​ said CEO and president Mark Craft last year, when Planet Organic opened its first store in Calgary.

Planet Organic reported revenues for the nine months ending 31 March 2004 as $8,691,071.

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