Vendor bankruptcy leaves store shelves empty at Vital Vittles

October 2, 2014

Tim Annick

A new sign in Vital Vittles this week informed shoppers that its largest vendor, Associated Wholesalers Inc., has gone bankrupt—explaining the temporary shortage of certain items until the Corp reorganizes its business.

The shortage at Vittles includes Chobani Greek yogurt, various brands of cereal, and some paper products, including plates and napkins.

Director of Vital Vittles Aaron Feltman (COL ’15) explained why the vendor’s bankruptcy has not affected other Corp services. “Associated Wholesalers Inc. is only a vendor for Vittles. I’m not sure exactly how long we’ve been using AWI, but for at least 3 years,” wrote Feltman in an email to the Voice. “AWI supplies roughly 50 percent of our products. However, the supply shortages only lasted for about a week. We got most of the products we were out of through other vendors during AWI’s inventory struggles.”

The Times-Tribune reported that Associated Wholesalers Inc. currently seeks Chapter 11 Bankruptcy protection and has placed its assets up for a court-supervised auction after years of financial problems. AWI plans to sell its assets to C&S Wholesale Grocers, which is the largest grocery wholesaler in the U.S. and serves 5,000 stores in 15 states.

C&S is one of three companies that has shown interest in purchasing AWI during an evaluation by Lazard Middle Market earlier this year. According to Supermarket News, C&S has offered to finance at least $132 million for the lesser of AWI’s bank debt. Their funding, however, may vary depending on AWI’s adjustments for additional debts. Currently, AWI owes money to multiple creditors, including Kellogg’s and General Mills.

According to the Corp, the bankruptcy has had little impact on Vittles’ overall revenue. Chief Executive Officer and President Sam Rodman (MSB ’15) wrote in an e-mail to the Voice, “AWI has received a cash infusion [loan]  so they can continue to operate at nearly 100 percent inventory. As far as operational issues go, it’s a pretty minor problem for us—we’re tracking the sale of AWI but we don’t have to scramble to find a new wholesale grocery vendor or anything.” 

Chief Financial Officer and Treasurer Gene Ball (MSB ’16) further explained that the Corp will continue to employ AWI after the company’s buyout. “We have over 70 other different vendors between all of our services. We don’t need to employ any changes because they will be bought out in the next two weeks by a bigger vendor,” Ball wrote to the Voice. “Therefore, after this happens, our product selection from the vendor can be larger than ever…We plan on sticking with whoever buys out AWI.”

The Corp suggests that students need not worry about missing their snacks at Vital Vittles. “I know that a company going bankrupt seems like a big deal, but it really hasn’t had a major impact on us. Going forward, AWI’s bankruptcy will not have any significant operational impact on Vittles or The Corp as a whole,” wrote Feltman. “We put up a sign because although the impact was minimal, we believe in transparency and informing our customers about the reasons why some products were not stocked.”

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