Foodservice Equipment Reports

BIG FOODSERVICE DISTRIBUTORS GETTING BIGGER, SAYS TECHNOMIC

The giant North American foodservice distributors, dominated by broadliners, have been increasing their share of the overall foodservice distribution market for years. A new study from Technomic Inc. analyzing data from 2010 provides some revealing documentation of the trend. According to Technomic’s annual study, the “Power Distributor Report: The Top 15,” while the foodservice industry as a whole barely managed to grow in `10, the top 35 foodservice distributors' combined sales rose 5% last year. The study does not include or cover E&S distributors, nor does it include cash and carry distributors and warehouse clubs or custom/systems distributors, which serve only chain customers.

Nine of the 35 managed double-digit sales gains, led by Brossard, La.-based Doerle Food Services, which pushed sales 15% higher to $292 million.

Led by giant Sysco Corp., nine of the 35 companies have sales exceeding $1 billion. The Houston-based distributor reported sales rose 7%, a gain of  $2.654 billion, more than the total sales of all its competitors other than the next five largest. Among the top five, the no. 3 firm, Performance Food Group, Richmond, Va., grew sales 6% to $10.3 billion; Grand Rapids, Mich.-based Gordon Food Service saw sales rise to $7.7 billion, up 7%; Reinhart FoodService of Rosemont, Ill,, increased sales 8% to $4.547 billion, thanks in part to the acquisition of former top 10 distributor CONCO Food Service. The second largest distributor, Rosemont, Ill.-based U.S. Foodservice, saw sales decline 1% to $18.9 billion. All sales totals include the effects of acquisitions. Consolidation among foodservice distributors rose last year.

According to Technomic, the top 35 distributors—those with sales of more than $150 million a year—control 46% of total North American foodservice distributor sales of $213 billion.

“The predominance of growth is coming from the top,” said Gary Karp, Technomic exec. v.p.  “Most of the top 35 companies are broadline distributors, and their growth has come at the expense of other broadliners and specialists.”

Nearly all the top broadliners sell equipment and supplies, with some companies placing more emphasis on E&S than others. Sysco verified E&S sales in ’10 of $700 million for FER’s Top Dealers Report, up from $675 million in ’09, making it the single largest distributor of E&S in North America. But three large E&S dealers—Edward Don & Co., TriMark USA and The Wasserstrom Co.—have higher verified E&S sales than the next closest broad market distributors, Jetro Holdings/ Restaurant Depot, a cash and carry distributor, and U.S. Foodservice. Another two E&S companies, Strategic Equipment and Supply and The Boelter Cos., would also qualify under the $150 million hurdle.

The “Power Distributor Report: The Top 15” provides in-depth analysis of the 15 largest foodservice distributors, as well as rankings and analysis on all 35 top companies. The 90-page report is available for purchase from Technomic at www.technomic.com.