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C.H. Robinson’s Sourcing Business, Robinson Fresh

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C.H. Robinson’s sourcing business

Since C.H. Robinson Worldwide’s (CHRW) inception in 1905, the company has been in the business of sourcing fresh produce. Transporting fresh produce is a tricky business, as it involves rapid packaging, quick transportation in temperature-controlled containers, and rapid distribution. The company’s customer base includes restaurants, grocery retailers, foodservice distributors, and fresh produce wholesalers.

The logistics giant’s sourcing services include inventory forecasting and replenishment, category development, and brand management. Its brand management services include regional and national branded produce programs covering both proprietary and nationally licensed brands.

The company sources its products under the brand name of Robinson Fresh and offers customers grower quality assurance and monitoring programs. For the past three years, CHRW’s sourcing business comprised ~5% of its net revenue.

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Sourcing industry’s growth

According to C.H. Robinson, citing a 2016 Specialty Food Association report, the foodservice industry was worth $1 trillion and is expected to grow at a compound annual rate of 4.8% through 2020. Over the longer term, CHRW intends to expand its services globally and lead the market in different sourcing categories by leveraging its temperature-controlled transportation expertise.

Investing in ETFs

The iShares US Industrials ETF (IYJ) has an exposure of 0.4% to CHRW, 6.7% to the railroad sector, 1.7% to FedEx (FDX), 3.3% to Union Pacific Railroad (UNP), and 5.5% to Boeing (BA). In the next article, we’ll discuss CHRW’s technology backbone, Navisphere.

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