Largest Broadliners Growing Again: Collective Sales Rise 5%, Wipe Out ‘09 Losses

The nation’s 50 largest broadline distributors collectively broke the $100 billion mark in 2010, growing sales 5 percent over sales reported by the 2009 Top 50. It was a strong performance following the 2 percent sales decline the Top 50 experienced in 2009. The performance of the top 10 companies alone paints a bright turnaround picture: In 2009, the top 10 together saw their sales decline by 5 percent, with six of the 10 companies reporting losses for the year. In 2010, the top 10 collectively achieved a 5 percent gain and only one among them, U.S. Foodservice, reported a slight sales decline.

None of the top 10 distributors were among the biggest gainers for the year. Rather, with two notable exceptions of Cheney Brothers, Inc., (#11) and Merchants Foodservice (#15), companies in the middle and lower portions of the rankings made the biggest strides in 2010. They range from No. 21 Doerle Food Services, which for the second year tops the list of biggest gainers, to No. 43 American Foodservice.

Indeed, compared to the foodservice industry as a whole, broadline distribution was a bright spot. Figures released by Technomic, Inc., show total foodservice industry sales in 2010 grew on a nominal basis (factoring in 1.5% inflation) by just 0.7%. For distributors, at least, flat is no longer the new up. Of the 2010 Top 50, 11 companies turned in double-digit sales increases and more than half bested the group’s 5 percent average increase.

The top 10 companies turning in the largest dollar sales increases together added $4.5 billion in revenue in 2010, a healthy jump from the $1.5 billion the sales-dollar leaders added in 2009. Dollar sales gained were primarily generated internally. Acquisitions, while seeming to heat up in 2011, weren’t major factors in any of the sales gains made in 2010.

All told, the 2010 Top 50, with total sales of $100.4 billion, makes up roughly half of total foodservice distribution sales, which according to Technomic estimates, were $201 billion last year.

The news for the year was, not all upbeat, but losses were significantly less than the prior year. In 2010, only five companies reported sales declines, with the biggest being -5.43 percent at by IFH. In contrast, 23 companies reported revenue losses in 2009, with the largest, Upper Lakes Foods, topping out at -16%. That company in 2010 stemmed its losses to end the year flat. Several other distributors reported flat sales for 2010, as well, including Services Group of America, C.A. Curtze Co., Feesers, Inc., Pocono Produce Co., and Cedar Farms, Inc. ID estimates that sales at Hawkeye Foodservice and Affiliated Food Service, both of which declined to provide data, were flat as well.

Only one company dropped out of the 2010 Top 50 rankings, CONCO Foodservice, due to its acquisition by Reinhart FoodService. CONCO had ranked No. 15 in the 2009 Top 50 with estimated sales of $440 million. Another Top 50 member, Goldberg & Solovy Foods, has been acquired by Sysco but is included in the 2010 rankings due to its late May 2011 acquisition date.

With one position opened up thanks to CONCO’s exit, newcomer Cedar Farms Co., Inc., comes in at No. 50 with 2010 sales of $90 million.  Founded in the 1920s in Philadelphia as a poultry, egg and cheese distributor, Cedar Farms is a broadline member of Legacy Foodservice Alliance. It serves primarily street accounts within a 200-mile radius of its distribution center.

Beyond those two substantive changes, minimal re-ordering of the rankings occurred in 2010. Companies making the biggest advances up the ladder were Doerle Food Services, which moved up five positions, J. Kings Foodservice Professionals and American Foodservice, each moving up four positions, and DiCarlo Foodservice and HFM Foodservice, each moving up three places. Making downward moves in the rankings for 2010 were Jordano’s Foodservice, down three positions, BiRite Foodservice, down two spots from 2009, and Van Eerden Foodservice, down one position. No ranking changes occurred among the top 10 distributors. Sysco Corp. remains far and away the leader with sales more than double that of No. 2 U.S. Foodservice. Following a 5 percent decline in calendar year 2009 sales, Sysco regained its footing last year to notch at 7.4 percent sales gain.

Sysco’s is a turnaround scenario that, like that of the 2010 Top 50 as a whole, bodes well for the entire industry. While executives continue to express concerns over the impact on foodservice sales of rising commodity and fuel costs, most who provided forecasts for their company’s performance in 2011 were, if not bullish, at least conservatively positive. After the downer that was 2009, that’s a welcome change, indeed.

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 exclusive and invaluable industry overview.