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Here's some food for thought: The U.S. organic industry clocked in $31.5 billion in sales in 2011, representing 9.5% growth. The overwhelming majority of this ($29 billion) was food and beverage. Furthermore, organic food sales now represent 4.2% of all U.S. food sales, up from 4% in 2010. And I am going to take part in this trend by introducing United Natural Foods (NASDAQ:UNFI) to my Real-Money Portfolio.

Keep it simple
In line with my investing philosophy, there are four things I look for when considering any investment:

  1. I want management I can trust. They need to be in it to win it, and they need to be honest.
  2. I want something that is understandable and that I can enjoy following.
  3. I want a catalyst -- a short-term event or long-term trend that will help create value.
  4. I want a fair price. Enough said.

Management I can trust; in it to win it
I've been following United Natural foods now for a few months, and in doing so have gotten some perspective on CEO Steven Spinner and the value he brings to the table. While he has been CEO of United Natural Foods since 2008, he has a long work history in distribution and has an excellent track record thus far. Under his watch, revenue has grown 11.5% annualized and earnings at an even better 17% annualized.

And shareholders have won, too. The stock has returned almost 160% since Spinner took the reins, throttling the market in the process. The board is comprised of three committees: compensation; audit; and nominating and governance. There are nine members of the board with only one internal to the company in CEO Spinner, and the compensation committee is all external.

Understandable and interested
When you go to the grocery store, do you give any thought as to where the products you buy actually come from? Well, chances are very good that you are walking out with something that came from United Natural Foods' distribution network. With 26 distribution centers representing more than 6.2 million square feet of warehouse space, United Natural Foods is more than twice the size of its nearest competitor in a business where scale is a huge competitive advantage. And thanks to a supplier base of more than 4,800, UNFI isn't dependent on any one. In fact no supplier accounts for more than 10% of the company's total purchases, including its largest supplier, Hain Celestial (NASDAQ:HAIN)

A long-term trend
There's no denying the growing trend toward organic and natural food offerings. One need look no further than Whole Foods Market's (NASDAQ:WFM) sales over the past decade, which have grown from about $2.5 billion in 2002 to more than $11.5 billion today, to see the writing on the wall.

Interestingly enough, Whole Foods is also UNFI's largest customer, representing approximately 36% net sales. Granted, that's heavy dependence on one customer, but the good news is twofold. First, UNFI has been Whole Foods' primary distributor for more than 14 years. And second, the two companies just renewed an agreement for UNFI to continue to be its primary supplier through September 2020.

And it's not just Whole Foods. UNFI is also a supplier to other popular chains such as Safeway, Publix, and Wegmans, to name just a few.

All at a fair price
Like I said before, scale matters in this business, and UNFI's wide-reaching distribution network gives it a competitive advantage over smaller players in the space. To be sure, the company is facing some near-term headwinds. Gross margin pressure due to shortages from suppliers that result in price-cutting, costs involved with the rollout of a national supply chain platform warehouse system, and plans to increase capacity via new warehouses are all threats to near-term profitability. But I do believe that management is working through the tougher times today to set this business up for long-term success.

If these investments in the business prove out over the long haul, I think that management should be able to sport an operating margin in the neighborhood of 3.5%, which makes me think that today's stock price is robust at around $53 per share. But remember, this is still a growth story and the company's standing as the top dog in the industry eases some of my concerns. I'm OK with paying for quality, especially if I think it's getting me in on a long-term growth story.

The Foolish bottom line
The landscape is changing for grocery shoppers. When I was a kid, Piggly Wiggly was the place to go (yes, I understand I've more or less dated myself here). But my kids are growing up on a new normal with organic and natural options. With the game still in the early innings, I see United Natural Foods as a great way to play the movement, so I'm adding $1,000 worth of shares to the Motley Portfolio.

Jason Moser has no position in any stocks mentioned. The Motley Fool recommends Hain Celestial and Whole Foods Market. The Motley Fool owns shares of Hain Celestial and Whole Foods Market. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.