There are the large multi-location corporate giants who, because of their very size, make so much of the industry news. But they are only the tip of the iceberg. There are also single-branch independents, many of them small- or medium-sized businesses. Some distributors are members of the marketing/buying groups which play such a strong role in the foodservice distribution arena, but others remain unaffiliated. There are broad- and full-line distributors and there are others who thrive on product specialization. There are distributors, most in fact, who sell to a broad cross-section of the foodservice market. But conversely there are specialists who have tailored their operations to service specific types of operators: limited-menu outlets, for example, or airlines.
Since 1974, ID has profiled the Top 50 “generalist” foodservice distributors in its December issues. There are distributors who, as much as possible, exemplify the main industry trends. They are full-line in food products and disposables, usually stock tabletop products and smallwares, and, in numerous instances, equipment as well. They also sell to a broad spectrum of the market.
In 1983, these Top 50 generalist distributors rang up a total of $10.5 billion in sales. This total represents approximately 15 percent of the estimated $70 billion worth of foods and nonfoods that the nation’s foodservice operators purchased through distributors last year.
But the Top 50 themselves are, in many ways, a mixed bag. The traits they share are their broad-line and broad-market approaches and, of course, their bigness. But they are otherwise diverse.
The “Top 4″ companies in this group, Sysco, CFS Continental, PYA/Monarch, and Kraft, are multi-location with geographical coverage verging on national. They are also huge. In 1983, they generated nearly half-47.6 percent–of Top 50 sales. But, in terms of the total foodservice distributor universe, their nearly $5 billion sales total represented a substantially less impressive 7.1 percent of overall volume.
Of the remaining 46 of the Top 50, 38 are members of a distributor group. One of these companies (Sandler Foods) belongs to two, Nifda and F.A.B. Brands. Specifically, 14 are members of North American Foodservice Companies, eight belong to F.A.B. Brands, seven to CODE, five to Nifda, three to Parade, one to Nugget, and one to All Kitchens. These 38 Top 50 distributors who are group members rang up a volume of nearly $4.4 billion last year. This total accounted for 41.9 percent of Top 50 volume. Thus, the four “corporate giants” and the 38 group members between them generated 89.5 percent of total Top 50 generalist distributor sales.
Meantime, all group members small and large achieved a total of nearly $15 billion in sales in 1983. (See table on page 84). This represents 21.4 percent of total distributor volume.
But, although these generalists do account for by far the greater share of total distributor sales, there is a significant portion claimed by the specialist distributors. These companies are in the main systems distributors. Their operations are fine-tuned to meet specific customer requirements.
Thus, of the 15 biggest foodservice distribution specialists (see table on page 75), seven have developed systems geared specifically to the needs of limited-Menu chains. They are The Martin-Brower Company, Golden State Foods Corp., Proficient Food Co., Collins Foodservice, Worcester Quality Foods, The Southland Corp., and Interstate Distributors.
Another distributor specialist, Smart & Final Iris Co., specializes in servicing the opposite end of the market spectrum, small operators. For their benefit it specializes in cash and carry and, in 1983, rang up sales of $316 million doing so.
Aiming at still another type of operator, airline feeders, but also systems oriented is Sage Foods, Inc., with 1983 volume of $86.5 million.
Leprino Food Corp., with 1983 volume of $248.0 million is also a market specialist and the market it has pinpointed as its own is a natural outgrowth of its cheese manufacturing operations. Leprino services mainly pizza restaurants although it has recently broadened its customer mix with the addition of Mexican food operations.
Morco Industries began as the self-distribution organization of the Morrison’s Cafeteria chain. But in recent years it has begun to service outside customers, particularly hospitals, ringing up a volume of $227 million with operations other than its own. Finally, four of this group of distributors are product specialists. Monfort Distributing Company and Smith, Richardson & Conroy, Miami, specialize in distribution of center-of-the-plate products, principally meats and seafood. Wechsler Coffee Company is primarily, as its name implies, of coffee distributor. And Edward don & Co. is the nation’s largest distributor of supplies and equipment for foodservice.
Many of these distributor specialists ring up impressive volume. As the table on the facing page shows, four of the 10 biggest U.S. distributors are specialists. Nine of the 20 biggest are.
But, large as they are, the 15 biggest distributor specialists registered a sales total of $4.7 billion, or 6.7 percent of distributor sales.
To sum up, the 65 biggest distributors–50 generalists and 15 specialists, ring up a total of 21.7 percent of foodservice food, supplies and equipment sales. This includes the largest corporate distributors, group members, and independents. The remaining 78.3 percent is shared by several thousand other distributors in the still remarkably fragmented foodservice distribution universe.
The top 50 generalist foodservice distributors accounted for 15% of sales to foodservice operators. Of these the top four are almost national multi-location companies; thirty-eight are members of distributor groups. Specialist distributors have claimed a significant portion of sales by fine-tuning their operations to the limited-menu chains, small operators, airline feeders, hospitals, etc. In summation, the 65 biggest distributors (50 generalists, 15 specialists) account for 21.7% of food service sales.