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Top 50 2010 Report

The ID Top 50 distributors had a tough year. Collectively, they report sales of $96 billion compared to 2008 sales of $98 billion, a loss of 2 percent. The top 10 distributors together saw sales drop by more than 5 percent in 2009, with the Big 3—Sysco Corp., U.S. Foodservice and Performance Food Group—showing the biggest losses among them. Fully half of the Top 50 companies saw revenues drop in 2009, and several more reported flat sales.

The 2009 scenario is a far different picture from just the prior year, when the Top 50 beat the odds to turn in 5.2 percent volume growth despite overall industry contraction of more than 4 percent.

That’s the glass half empty. The glass half full shows the Top 50 performing better in 2009 than the industry as a whole: Technomic shows nominal foodservice sales growth of -3.8 percent for the year.  

10 Biggest % Sales Increases
(2009 over 2008)

1.

Merchants Foodservice
Hattiesburg, MS
25%
2. Reinhart FoodService
Rosemont, IL
17%
3. Doerle Food Services
Broussard, LA
14%
4. American Foodservice
Lee’s Summit, MO
13%
5. Labatt Food Service
San Antonio, TX
12%
6. Glazier Foods
Houston, TX
12%
7. Driscoll Foods
Clifton, NJ
11%
8. Maines Paper & Food Service
Conklin, NY
11%
9. Fox River Foods
Montgomery, IL
10%
10. Van Eerden Foodservice Co.
Grand Rapids, MI
10%

And there were some bright spots.

Ten companies achieved double-digit sales gains in 2009. They were led by Mississippi-based Merchants Foodservice, which registered a 25 percent jump in sales. The company ranked 20th in the 2008 ID Top 50 and this year moves up four notches to No. 16 with sales surpassing $400 million. Strategic acquisitions that facilitated territory expansion have played a part in Merchants’ rapid rise the past couple of years. 

Along with Merchants, Driscoll Foods advanced the most in the 2009 rankings, also moving up four spots from the prior year. A recent consolidation of two smaller facilities into a significantly larger single facility has helped the company streamline its operations and grow sales in its two primary niches: schools and street accounts.

Acquisitions played a part in other big gainers’ performance, as well.  While it made no acquisitions within calendar 2009, Reinhart opened a new fold-out distribution center in Chicago and continued to assimilate volume acquired in a 2008 buying spree during which it picked up IJ Company in Atlanta; Banta Foods in Springfield, Missouri; and Supreme Foods in Suffolk, Virginia. Labatt Food Service last year acquired Zanios Foods, a former Top 50 broadliner based in Albuquerque, New Mexico. Zanios reported 2008 sales of $212 million.

Increases in chain and noncommercial business helped other companies to balance out recessionary loses on the street and find growth.

The top 10 dollar sales gainers collectively added nearly $1.5 billion in revenue last year. In contrast, the top 10 on this same list in the 2008 Top 50 reported collective sales nearly $8 billion above their previous year’s revenues. While acquisitions, specifically impacting Performance Food Group’s and Reinhart’s numbers, accounted for more than half of that increase, much of the balance was organic growth that slowed to a trickle in ’09.

As the overall Top 50 rankings chart (link to chart) shows, there were more losers than winners in 2009. Nineteen firms had sales losses bigger than the group’s -2 percent average, with one reporting a double-digit revenue decline for the year. Upper Lakes Foods in Cloquet, Minnesota, falls a notch in the 2009 rankings on a 16 percent drop.

10 Biggest $ Sales Increases
(2009 over 2008, in millions)

1.

Reinhart FoodService 
Rosemont, IL
$606
2. Maines Paper & Food Service
Conklin, NY
$300
3. Gordon Food Service 
Grand Rapids, MI
$200
4. Labatt Food Service
San Antonio, TX
$99
5. Merchants Foodservice
Hattiesburg, MS
$82
6. Glazier Foods
San Antonio, TX
$57
7. Doerle Food Services
Broussard, LA
$31
8. Fox River Foods
Montgomery, IL
$29
9. Cheney Brothers Inc.
Hattiesburg, MS
$24
10. CONCO Foodservice
Metairie, LA
$20

The company with the most downward movement in the 2009 rankings is Costa Fruit & Produce, which fell four slots to No. 48 thanks to a 4 percent dip in sales and jostling for new positions among the 10 smallest Top 50 firms. Within that group, Glover Wholesale moves up three spots; Jacmar, Appert’s, Y. Hata and Ginzberg’s all move up two slots and Jordano’s and Affiliated each gain a notch in the rankings. ID estimates that Pocono Produce, which declined to provide sales data, held its No. 50 spot with sales of approximately $100 million.

Zanios Foods was the only company to drop out of the 2009 Top 50 rankings, due to its acquisition by Labatt. The only company new to the 2009 Top 50 is American Foodservice, which is also the youngest company within its ranks. Founded as a meat specialist in 1986, its sales last year were $107 million, up 12 percent over 2008. A UniPro member and member of UniPro’s Multi Unit Group, American services primarily commercial foodservice accounts, with just over half of its business done with chains.

At the top of the rankings, Sysco Corp. remains No. 1 by a wide margin. The company in calendar 2009 reported a 5 percent drop in revenues. Its closest competitors, U.S. Foodservice and Performance Food Group, performed similarly. They finished the year down 4 percent and 5 percent, respectively.

With a difficult 2009 now in the rear view, Top 50 executives expect 2010 to continue to be challenging on a number of fronts. Of those who offered projections for 2010 sales, most were in the flat to up-5-percent range, with a small handful slightly more optimistic. None who provided projections felt double-digit gains were likely. Asked what key issues they’ll be dealing with this year, top responses included continued economic and industry softness, rising fuel and healthcare costs, government mandates, food safety and transportation regulations, reduced consumer confidence/spending, customer attrition and bad debt.

ID would like to express sincere thanks to executives and assistants from the Top 50 companies, and others whose companies have not yet made the list, for their cooperation and for providing data that enables us to publish this invaluable industry overview.