Wessanen: Further Steps Taken at Tree of Life

Lower cost base, new services, new customers

Royal Wessanen nv today informed employees at its North American subsidiary Tree of Life North America (TOL NA) about further steps taken in its 'Build on the Roots' restructuring program. In addition, the company announces the introduction of new service capabilities and recently signed a number of distribution agreements with new customers.

Further steps in 'Build on the Roots' program to generate extra savings

As stated at the publication of Wessanen's third quarter 2004 results, the decline in Low Carb sales has prompted TOL NA to intensify the restructuring of its organization.

Meanwhile, in December 2004, the company has consolidated its two California-based facilities into one state-of-the-art facility in Los Angeles. Also in December, the company has closed its secondary distribution facility in the Dallas, Texas, area, reducing the number of facilities it operates in Texas from three to two. With these measures the company lowers its cost base, improves operating efficiencies and enhances customer services.

Moreover, effective today, operations in TOL NA's Northeast Region, Southeast Region, and Tree of Life Corporate Headquarters have merged to form the new East Region. This move concentrates Tree of Life's U.S. distribution operations into three regional offices located in St. Augustine, FL (East Region), Dallas, TX (Southwest/West Region), and Bloomington, IN (Midwest/Northwest Region).

TOL NA will also immediately implement a reorganization of its procurement-related activities. The purchasing function will be separated into category management, vendor management and inventory management. This structure will promote focus and business excellence in supply chain management, product assortment, gross margin and service level.

"Our new, more streamlined organization allows us to put our best people in leadership positions close to our customers, and extend one consistent set of best practices across the company. It also creates synergies that help us improve customer service and allows us to take all unnecessary costs out of our operations", said Alec Covington, President and CEO of Tree of Life and Member of Wessanen's Executive Board.

The announced measures are within the exceptional charges indicated earlier. The detailed financial implications will be further specified at the publication of Wessanen's 2004 results in March 2005.

Introduction innovative Smart Assortment™ marketing service

TOL NA announces today that its innovative new Smart Assortment™ marketing service has successfully completed the pilot stage and will begin to become available to the company's customers in the second quarter of 2005. The Tree of Life Smart Assortment™ program combines the use of several types of data to determine the optimal product assortment, by category, for individual retail store locations.

New distribution agreements signed

TOL NA also announces that a number of distribution agreements have been signed in recent weeks with new customers, including one to supply natural and specialty foods to the Penn Traffic Company, which operates 109 supermarkets in Pennsylvania, central and upstate New York, Vermont and New Hampshire under the BiLo, P&C, and Quality trade names. In addition, the company has signed an agreement with Coborn's Inc. to supply all of the chain's specialty, gourmet, ethnic, natural and organic products to their 30 stores in Minnesota, North Dakota and South Dakota.

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