Single Store Owner

AUG-SEP 2016

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the h ub 16 / Convenience Store News for the Single Store Owner / AUGUST/SEPTEMBER 2016 What 'Darwinian Distribution' Means for You Explaining the consolidation phenomenon from the independent operator perspective By R E né E M. Covino company's distribution network into the Northeast. Citing that both companies are "multigen- erational family businesses," Thomas Wake, co-president of Eby-Brown, said this merger will deliver "increased value with best-in-class category management programs, promotional offerings and sophisticated technology." Such synergies are good reason for the consoli- dation now occurring in the distribution channel, as it follows in the footsteps of the retailers it serves. But the way one industry insider sees it, this is all part of an overarching and much more widespread industry phenomenon. "The broad theme is that this is part of a larger Darwin- ian eco-system, where the stronger survive," Don Stuart, managing director of Ca- dent Consulting Group in Wil- ton, Conn., told Convenience Store News for the Single Store Owner. "What we've seen on the retailer side — it's true in grocery, mass and convenience — is a consolidation driven by the need for greater efficiencies to compete with Walmart, Amazon, you name it. Similarly, it's happening now on the distributor side. As retailers grow larger, they don't want to deal with multiple distribu- tors; they want to go through primarily one source." Specific to the conve- nience channel, Stuart cites that traditional candy and tobacco jobbers/rack jobbers were handling the market as chains grew more dominant. They con- solidated and distributors followed suit because "they needed to be efficient just like the larger retailer orga- nizations. Retailers prefer to deal with fewer sources M erger mania, so rampant on the retailer side of the convenience channel, appears to have made the leap over to the convenience distribu- tor side. So far this year, two distribution giants have gobbled up smaller wholesaler fish, citing geographic, technology and marketing improvements as benefits of their newly merged entities. In June, Core-Mark Holding Co. Inc., based in South San Francisco, closed on its acquisition of Pine State Conve- nience, a division of Pine State Trading Co., headquartered in Gardiner, Maine. The acquisition "affords us the opportunity to widen our geographic footprint in an area where we have a limited presence, and offer Pine State Convenience customers a new spectrum of products and market- ing programs," Core-Mark President and CEO Thomas B. Perkins stated. Pine State's Keith Canning, chosen to lead the acquired assets as division president, added "Core-Mark's invest- ment in Maine will bring advanced technology and proven marketing programs that will provide new opportunities to help our customers continue to grow." Meanwhile in the Midwest, Eby-Brown Co. LLC, based in Naperville, Ill., expanded its reach with the acquisition of West Mifflin, Pa.-based Liberty USA, reportedly the largest independently owned conve- nience store supplier in Pennsylvania. This purchase not only strengthens Eby-Brown's presence within the state of Pennsylvania, but it also extends the

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