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2005 ID Top 50 Report: ID Top 50 Broadliners Grew 9.5% in '04 |
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Roster Includes New Entrants; Minimum Sales Reach $70.5 Million
By Ihor Dlaboha
NEW YORK - The ID Top 50 broadliners grew 9.5% in sales volume in 2004,
reaching $73.1 billion, which was slightly more than double the growth
rate for the entire foodservice distribution industry.
 The 2005 ID Top 50 Report, which appears in three parts in today's issue of ID Report, again
underscores the volatility of the fraternity of leading broadliners
with the appearance of five newcomers, which precipitated in forward
and backward movements for many of the traditional participants.
Displacements notwithstanding, 49 distributorships registered revenue
gains last year while one company, The IJ Co., Knoxville, TN, had
negative growth due to its intentional disassociation with one account,
according to a company spokesman.
Nonetheless, virtual rock-solid stability was demonstrated by the
returning top five companies.
Sysco Corp., Houston, once more placed first among U.S.
distributorships with $30 billion in sales, growing 9.1% or $2.5
billion. Beleaguered U.S. Foodservice, Columbia, MD, was second, with
$18.8 billion, expanding by 5.62% or $1 billion.
Performance Food Group, Inc., Richmond, VA, in a move that perhaps
reflects the excessive scrutiny that foodservice companies are under in
the wake U.S. Foodservice's troubles, surprisingly announced on Feb. 15
that it is delaying release of its annual statistics for 2004. Its
decision was due to investigations prompted by anonymous allegations
questioning accounting practices at one of its broadline divisions.
Nonetheless, in cooperation with a Wall Street securities analyst, ID
Access estimates that last year its foodservice broadline sales were
about $5.2 billion, leaving it as the third largest distributorship in
the country.
Gordon Food Service, Grand Rapids, MI, was fourth with $3.5 billion, an
increase of $200 million or slightly more than 6%; and Food Services of
America, Seattle, was fifth with $2.25 billion, an increase of $250
million or 12.5%.
Overall, foodservice distributors' growth last year almost matched that
of the operators. The country's distributorships, which number some
17,000 companies, registered $204.6 billion in sales in 2004, growing
by $8.6 billion or 4.4%, according to Technomic, Inc., Chicago.
Broadliners recorded $110.7 billion or 6.5% more than in 2003. Their
share of the distribution marketplace was 54%.
Systems distributors rang up $32.7 billion in business or 5% than in
2003 and captured 16% of the market. Specialists brought in $61.1
billion in sales or 0.5% more than in the previous year and held on to
one-third of the business, the Chicago analyst reported.
The 2005 ID Top 50 Report also shows that compared with the foodservice
distribution industry as a whole, the big companies are continuing to
get bigger and the pinnacle is grabbing a larger share of commercial
and noncommercial operators' purchases. The 50 largest broadliners
constitute slightly more than 66% of all broadline revenue and 35.2% of
the industry's sales - slight increases in both categories compared
with adjusted 2004 ID Top 50 results. (See second chart on the 2004 ID Top
50 webpage for adjusted revenue.)
This trend is furthermore illuminated when looked at from a five-year
perspective. The foodservice distribution industry grew 25% in 2000-04,
from $163 billion to $204 billion. Sales of The ID Top 50 expanded
29.6% at the same time, growing from $56.4 billion to $73.1 billion.
(See chart above for year by year growth.)
| 10 Biggest $ Sales Increases |
| 1. Sysco Corp. | $2,500.0 MM |
| 2. U.S. Foodservice |
$1,000.0 MM |
| 3. Performance Food Group |
$546.0 MM |
| 6. Reinhart Foodservice |
$360.4 MM |
| 5. Food Services of
America | $250.0 MM | | 4. Gordon Food Service | $200.0 MM |
| 7. Maines Paper & Food
Service | $200.0 MM | | 9. Ben E. Keith Foods | $185.0 MM |
| 8. Shamrock Foods Co. |
$160.0 MM |
| 10. Cheney Brothers |
$150.0 MM |
The pattern is more pronounced when examined from
the very summit. The top three distributorships grew in the same period
from $35.6 billion to $53.9 billion or 52.8%, while Sysco expanded from
$20.6 billion to $30 billion or 45%. Last year, the top three also
recorded the biggest dollar increases (see chart).
At the other end of the spectrum, the minimal amount of sales needed to
be included in the latest ID Top 50 roster of broadliners increased by
$8 million to $70.5 million, which was registered by Cirelli Foods,
Inc., Middleborough, MA.
The largest distributorship earlier had declared its intention to reach
$50 billion in sales by 2008, an increase of 66% from last year's
total. That would mean increasing sales by $5 billion every year for
the next four years. On the other hand, if it repeated its current 9%
growth rate over that time, it would be slightly less than $8 billion
short of its goal.
The ID Billionaire's Club has grown to nine members, with the addition
of Ben E. Keith Foods, Fort Worth, Texas, which earlier this year
crossed that milestone. It finished the year with $1.1 billion in
sales, up 19.8% from the previous year. Revenue for these nine
companies totaled $65.5 billion, leaving $7.6 billion of the ID Top
50's total revenue share to be divided among 41 companies.
A significant gulf appears between distributors' revenues at the ninth
place, one that seemingly will not soon be overcome. The dollar
difference between Ben E. Keith and the 10th largest distributor,
Cheney Brothers, Inc., Riviera Beach, FL, is $591 million. Cheney
Brothers rang up $530 million in 2004, up a hefty 39.47% from the
previous year.
Newcomers to the ID Top 50 are: Costa Fruit & Produce Co., Boston;
Pocono Produce Co., Inc., Stroudsburg, PA; Sutherland's Foodservice,
Inc., Forest Park, GA; Appert's Foodservice, St. Cloud, MN; and Jacmar
Foodservice Distribution, Irwindale, CA. While two of the firms
prominently feature fruit and produce in their names, since their
establishment, they have evolved into broadline companies with DSRs or
comparably named sales associates calling on operators.
| 10
Biggest % Sales Increases | | 21. Pate Dawson Co. |
52.62% |
| 34. HFM Foodservice |
40.91% |
| 10. Cheney Brothers, Inc. |
39.47% |
| 32. Banta Foods, Inc. |
34.0% |
| 13. Institution Food
House | 29.13% | | 6. Reinhart Foodservice |
23.36% | | 19. Merchants Foodservice | 21.43% |
| 38. Dierks Waukesha |
20.37% |
| 18. Glazier Foods Co. |
19.8% |
| 9. Ben E. Keith Foods Co. |
19.76% |
The addition of these companies as well as the
significant double-digit growth rates of nearly two-thirds of ID Top 50
firms caused almost all to move up or down in standings compared with
last year. Pate Dawson Co., Goldsboro, NC, grew faster than the others
did, increasing sales 52.6% to $196.8 million and moving up 11 places
in the standings. HFM Foodservice, Honolulu, recorded the second
highest growth rate, 40.9%, ringing up $124 million due to an
acquisition, rising eight places in rank. (See chart)
This year's ID Top 50 Report also reveals that of the several hundreds
of thousands of SKU's in the warehouses, seven out of 10 of the
products display national brands. As for revenue sources, two-thirds of
the companies said street accounts constituted at least a plurality of
their sales compared with all other categories (commercial,
non-commercial, street and chain), two indicated an even split, six
didn't respond while the remainder gave nods to chain accounts.
With rising fuel charges being one of the leading challenges facing the
industry, distributors offered several suggestions on how to deal with
the problem. Ten companies out rightly replied to our inquiry that they
did not add fuel surcharges to their invoices while a dozen included
surcharges. Others indicated a combination of approaches including
purchasing fuel in bulk amounts, buying fuel-efficient trucks,
monitoring their routes, adjusting drop ratios, increasing order sizes,
reducing deliveries and installing GPS equipment.
However, financial and monetary issues superceded fuel costs as the top
distributor challenge. Without a doubt, the respondents said margin
management, cost controls and inflation need to be tamed before all
other matters if they hope to grow their businesses.
Technology also occupies a top
of mind place with distributors as a large number of them said they are
planning to adopt some form of computerized technology for their
warehouses or office operations. Nearly half of them also said they are
considering plant or geographic expansion this year while seven said
they are targeting acquisitions, which shows their confidence in the
national economy, in foodservice business and their individual ability
to take advantage of positive trends in the industry.
Another interesting statistic gleaned from the 2005 ID Top 50 Report is
that these companies employed 11,421 sales reps last year.
ID Access would like to thank all of the executives who
responded to the 2005 ID Top 50 survey for their participation in the
preparation of this year's report. |
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Beverage World
