Convenience Distributors AMCON & Team Sledd Detail Their New Partnership

OMAHA, Neb. — The convenience channel saw two key distributors come together last month when AMCON Distributing Co. made a strategic investment in Team Sledd.

Convenience store industry retailers are increasingly relying on their distributors to identity areas of opportunity and help them "see around the corner," as competitive pressures mount. Such pressures include greater disruption from new and emerging players, such as Amazon Go, Dollar General’s DGX format, and existing branded fast-food operators; margin and sales pressures in the fuel and tobacco categories; and tempered prospects for emerging product categories. 

In crafting their new partnership, both AMCON and Team Sledd carefully considered the needs of their retailer customers and employees, and developed a transaction by "cutting the suit to fit the man." The intended goal is to bring almost identical organizational cultures together in such a way as to leverage the unique core competencies of both AMCON and Team Sledd in an approach that creates an overall enhanced retail business platform.

"This partnership was designed with our collective customers’ needs in mind. Both organizations will maintain operations as they presently are, with the added benefit of enhanced products, flexibility, innovation and services, [which] this partnership brings to our customers through analysis of best-in-class programs and the execution offered by both organizations," AMCON President Andrew C. Plummer and Chairman and CEO Christopher H. Atayan, and Team Sledd President Rob Sincavich and Vice President Randy Emanuelson, jointly stated.

Through the strategic investment, both distribution companies are ultimately in a stronger position to serve both independent and chain retailers over a larger geographical footprint, and increase their opportunities to grow the collective customer base.

"Retailers should expect to see enhanced innovation and offerings across all three retail store segments — from front counter, to center store, to foodservice — with a focus on driving consumer destination appeal, along with increased retail sales and profits," the executives said.

A Synergistic Approach

Headquartered in Omaha, AMCON's presence in convenience distribution dates back to 1914. The $1.3-billion publicly traded company operates six distribution centers that serve more than 4,100 customers across 26 states, primarily located in the Midwest, Rocky Mountain and mid-South regions of the United States.

Team Sledd, based in Wheeling, W. Va., was purchased by Sincavich and Emanuelson in 1996. It serves more than 1,200 customers across seven Mid-Atlantic states.

Over the years, Team Sledd has undertaken several significant expansions: a $15-million warehouse facility expansion in 2015 to create its present 200,000-square-foot facility, with more than 40,000 square feet of temperature-controlled storage; and the creation of a 4,500-square-foot Convenience Learning Center, a fully functional convenience store that is also a product demonstration center and training facility for retailers and sponsoring manufacturers.

While both organizations bring common strengths to the combined relationship, it is essential to identify the unique strengths of each company that can be brought to one another to create additional opportunities for collaboration and enhanced value.

For starters, both AMCON and Team Sledd have a business model built around hands-on customer service, foodservice growth, and an orientation toward the needs of both the independent convenience store operator and non-vertically integrated chains.

AMCON, uniquely through its six distribution facilities, 26-state service area and size, brings economic scale and extensive enhanced geographic coverage to Team Sledd. AMCON's information technology resources, logistical expertise and retail financial consulting will all add to Team Sledd’s business platform.

"Team Sledd prides itself on having one of the highest sales-per-retail-location ratio in the industry. Team Sledd's elevated capabilities with store design and development, branding and innovation to create consumer destination appeal, and the largest convenience retail learning center currently available in the industry will become resources for AMCON and the retail customers served by AMCON," according to company executives. 

The long-term goal for both organizations will be to create a uniform combined approach to the convenience retail industry as a distributor who can offer the resources to:

• Drive the sales and profits of aggressive convenience retailers to even higher levels;
• Offer innovation in a state-of-the-art Convenience Learning Lab;
• Bring value-added specialization to both independents and small- to mid-size chains;
• Bring enhanced geographic size and scale to push the definition of small- to mid-size chain;
• Offer financial expertise and services;
• Remain committed to the value of being a customer-driven organization;
• Offer gold-standard store design and development; and
• Offer hands-on foodservice branding and training.

"In this era of consolidation, Team Sledd felt it was important to partner with a respected industry supplier that has the geographic and economic scale to broaden our collective reach and capabilities," Sincavich told Convenience Store News. "This partnership helps us create the preeminent convenience distributor in both the Midwest and Mid-Atlantic regions of the United States. ...AMCON's commitment to excellence in operations, logistics, financial reporting and cash management will provide a unique set of capabilities to support the future growth of Team Sledd."

Sincavich and Emanuelson will retain a majority interest in Team Sledd and continue in their roles as president and vice president, respectively.