Adding More to the Mix
Operators in this year?s Convenience Store News Top Wholesalers report reached sales of $65.8 billion during their last fiscal year. This 5.6-percent increase is slightly less than the 6.7-percent gain posted in last year?s report.
The top 10 wholesalers accounted for $57.3 billion in sales, an increase of 6.5 percent, beating their 6.2-percent gain from last year.
The 30 companies on the 2014 CSNews Top Wholesalers list are all repeat players from last year, although some rankings have shifted. McLane Co. Inc. continues firmly in first place with sales of $31.9 billion, a 10-percent increase year over year. Core-Mark Holding Co. Inc. once again follows in second place at $9.8 billion in sales and a 9.9-percent jump. Eby-Brown Co. and H.T. Hackney Co. also retain their ranks, with sales of $5 billion and $4 billion, respectively. The first change in ranking is Harold Levinson Associates Inc.?s move into fifth place with sales of $1.3 billion, a 3.6-percent increase.
In addition to McLane, other companies posting double-digit growth year over year include S. Abraham & Sons Inc. at 14.9 percent, and Southco Distributing Co. at 22.2 percent. This is Southco?s second year of such growth, with both years driven primarily by its acquisition of Coastal Wholesale Grocery in April 2013. As a result, the company has risen to a rank of 17th in this year?s Top Wholesalers report, compared to No. 20 in 2013 and No. 22 in 2012.
After several years of acquisition activity across the convenience wholesale industry, no further acquisitions were reported during the past year.
Among the top 30 convenience wholesalers, an average of 74 percent of their sales are derived from cigarettes, followed by 8 percent from other tobacco products (OTP), 6 percent from candy, 4 percent from foodservice, 3 percent from grocery, 2 percent from salty snacks, 1 percent from general merchandise, and less than 1 percent each for gourmet and all other categories.
The majority of wholesalers on the list indicated expansion into new product categories over the past year. Most often mentioned were vaping products (including vapor equipment and e-liquids). Fresh foods were second, including farm-fresh categories, as well as more attention to local, natural and gluten-free products. Prepared food was also mentioned among areas of expansion. No wholesalers mentioned eliminating any categories in the past year.
Several wholesalers noted that increases in foodservice and fresh-food categories were helpful in offsetting margin losses in the cigarette category, which continues to decline. In fact, the decline of cigarettes and the concurrent rise of OTP (including electronic cigarettes and vaping products) and foodservice were cited by some as the biggest trend currently impacting their business.
Topping the trends list, though, was government regulation, particularly health care, minimum wage increases and tobacco. Second on the list were issues involving transportation, specifically the supply of qualified drivers, costs, transportation fees and regulations. In third place was margin pressure, especially in the cigarette category. Other business-impacting trends cited included competition and consolidation within the manufacturing sector.
Rankings for the Convenience Store News Top Wholesalers report are based on sales from the last full fiscal year for each company. Data for this report was gathered through a survey conducted among the largest wholesalers primarily servicing c-stores that derive a majority of their annual sales from tobacco and candy products. Additional data was obtained through company reports and other public sources of financial data. In some cases, estimates have been made by Convenience Store News based on historical data and current industry trends.