While sales for the Convenience Store News Top Wholesalers reached a new high of $66.9 billion, the past-year increase of only 1.7 percent reflects recent challenges faced by the industry. Compared to growth increases of 5.6 percent in 2014 and 6.7 percent in 2013, this relatively modest rise can be attributed to the continued decline of cigarettes — by far, the leading category among convenience wholesalers — as well as ramped-up retailer acquisition activity resulting in consolidation by retailers in the number of wholesalers used.
The top 10 wholesalers posted $58.3 billion in sales, an increase of 1.9 percent. Companies in the top 10 remain the same as last year, though some rankings have changed.
Despite a slight decline in sales, McLane Co. Inc. continues to sit atop the list, with total sales of $31.7 billion, down 0.6 percent from last year. Core-Mark Holding Co. Inc. remains in second place with sales of $10.3 billion, a 5.1-percent jump. Core-Mark also recorded the only major acquisition in the past year, as it completed a deal for Karry Brothers, a Canadian company, in May 2015. Eby-Brown Co. (with a solid 6-percent increase) and H.T. Hackney Co. (no change) maintained their third- and fourth-place rankings, respectively.
With an 8.3-percent increase, Farner-Bocken Co. moved into fifth place on the list, with sales reaching $1.3 billion. This jump pushed Harold Levinson Associates Inc., AMCON Distributing Co. and S. Abraham & Sons Inc. down one place in ranking each. Imperial/Harrison Super Regional and Consumer Product Distributors Inc. maintained last year’s rankings to round out the top 10.
The cigarettes category continues to bring in the majority of sales for these top wholesalers, even as share for the category continues to decline. Currently, cigarettes represents an average of 69 percent of sales (down from 74 percent last year), followed by 8 percent from other tobacco products, 7 percent from candy and sweet snacks, 5 percent from foodservice, 3 percent from grocery, 2 percent each from general merchandise, packaged beverages and salty snacks, and 1 percent each from gourmet and all other categories.
Foodservice products and fresh foods, while still a relatively small portion of sales, are viewed as a key for future growth. Among the 62 percent of top wholesalers who reported expanding new product categories over the past year, all mentioned fresh food programs. These include new commissary programs as well as bread, produce, dispensed beverages and dairy.
Advancements and investments in technology have also led to operational improvements in the past year. Among the changes cited by top wholesalers were adding online portals for ordering and collecting business intelligence data; new order entry and marketing apps for both field representatives and customers; improved shipping and loading software; and improved scan-based delivery systems to improve accuracy and productivity.
When asked to choose the single biggest trend impacting their business today, a majority of top wholesalers (37.5 percent) cited the short supply of qualified truck drivers. Pressure on tobacco margins was cited by 25 percent of the top wholesalers, while last year’s top answer, increased government regulation, dropped to third at 18.8 percent.
Rankings for the Convenience Store News Top Wholesalers are based on sales from the last full fiscal year for each company. Data for this report was gathered via 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.
Among the 62 percent of top wholesalers who reported expanding new product categories over the past year, all mentioned fresh food programs.