Natural Foods Merchandiser

Climbing Down From the Top of Tree of Life

Would you give up the helm of a $1.6 billion company because your mother worries when you fly?

Rick Thorne, chief executive officer of Tree of Life, will retire this month after more than two decades at the St. Augustine, Fla., food purveyor. Over 22 years, Tree grew from a regional distributor to a $1.6 billion company with natural and specialty food operations—including production and marketing, as well as distribution—across the United States, Europe and Brazil.

Thorne has other reasons for stepping back. But none resonate quite like the fact that his 90-year-old mother in North Carolina put away the map he used to show her the places he?d traveled around the world. She was just too disturbed by the notion of her son in all those airplanes.

?I promised her that I would come home and spend some time with her, and have some time with her in Florida,? Thorne said in January. ?I have four lovely grandchildren and two children that I need to spend some time with too.?

He?s not sure what might be next, but he?s emphatic that he will not go to work for one of Tree?s competitors.

?A lot of people scratched their heads and said, ?What are those guys doing?? but it always worked out,? Thorne says of Tree?s strategy of growth through acquisition and its expansion into distribution, brokerage and production of natural and specialty foods.

By any measure, 2003 was a rough year for Tree. Dutch parent company Koninklijke Wessanen blamed its North American subsidiary when it reported mixed results for its third quarter. Unfavorable exchange rates between the dollar and the euro harmed sales figures when compared to the year-ago quarter.

Wessanen CEO Ad Veenhof said processes at Tree would be overhauled, new information systems installed and 800 employees laid off, among other measures. As part of the reorganization, Tree of Life and Wild Oats Natural Markets mutually ended a distribution agreement that was not even a year old.

?You?re not going to find me saying anything bad about them,? Thorne says of Wild Oats. Despite handing primary distribution for the country?s second-largest natural supermarket over to competitor United Natural Foods Inc., he says Tree of Life North America forecasts 7 percent to 8 percent sales growth in 2004 and much lower costs. ?[Wild Oats] didn?t need retail-oriented marketing programs,? he noted. ?What they really need is low-cost freight.?

When Thorne arrived at Tree in 1984, 95 percent of its trade was with natural food stores. He went to work on supermarkets and grew that business from 5 percent of sales to 25 percent right off the bat. ?I?d like to say it was a hard sell and we slaved, but the reality was, our products were coming of age,? he says. The same kind of customer who wanted organic and natural products also shopped for specialties and other ?reward foods,? so heading in that direction made sense.

In 1985, Tree of Life was acquired by Wessanen, a Dutch food conglomerate. Wessanen?s deep pockets enabled Tree to launch an acquisition spree that began with the 1986 buyout of Balanced Foods? seven businesses and enabled the company to build a parallel specialty food business, Gourmet Award Foods. ?The success of that acquisition was a real defining moment,? Thorne recalls. ?It gave us a confidence and a skill set to be able to do it again and again and again.? In 2000, Wessanen launched Tree of Life Europe and has been building a similar business overseas.

?Europeans always think very long-term,? Thorne says, and Wessanen?s long-term strategy is to differentiate its portfolio of branded products from its distribution businesses. Dutchman Bill Maeijer has been named interim CEO of Tree?s U.S. brand group; the distribution group will get its own new CEO. Thorne plans to make his ultimate departure a low-key affair.

?We?ll have a day to hang out and tell stories, and then I?m going to turn out the lights in my office and go home,? he says.

Natural Foods Merchandiser volume XXV/number 3/p. 69

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