Overcoming the Challenges Faced by Top C Store Distributors in the Midwest
Most of us are of the opinion that having a large C Store distribution unit is a very profitable business and the owners have to just delegate tasks to employees and crack the whip for work to be done in time. But it is the owners who truly know the constant challenges they have to face to meet customer demand of low prices. Convenience store chains in Midwest were facing twin problems of growing overheads and low sales which were not as bad as southwest region. Though a few large ones sold out and a few small chains within states had to shut shop, a fairly large number of them managed to escape the tide and emerge successful. However one problem continues to plague these distributors which is financing at the right time as banks have become very cautious in their lending policies.
Top C store distributors in Midwest – Here is a list of top distributors and how they have managed to overcome challenges in their business. While some of them have been in the business for several decades as it was part of their family, there are a few recent entrants who have changed their business model to understand demand and make profits. The smaller localized chains have done better than national level distributors as they are more in touch with community needs and are financially more stable.
a. McLane Co. Inc – This oldest C Store distributor from Texas, began operations as a small grocer in 1894 and today is a $44 billion powerhouse. Owned by Berkshire Hathway Inc., the mammoth distributor employs 20000 people across 80 distribution centers. The firm has built its core business around consumer products and today has a massive list of 50000 consumer products which are shipped to 90000 locations across the nation.
b. Farner-Bocken Co – This Iowa based distributor of convenience and food products established business in 1939 and since then has been able to expand business across Midwest and now serves 14 states. The organization managed to face recent setback of diminishing demand for tobacco products but replacing them with new range of fresh products like breads, appetizers, deserts and pastries. With C store chains line Casey’s and 7-Eleven changing their stores to accommodate ready to eat food cum coffee outlets, moving into the fresh food delivery business seems a sensible business expansion plan.
c. Reinhart Food Service – Owned by Illinois based Reyes Holdings, Reinhart FoodService is a one of the largest food products distributers in the Midwest and services stores across 16 states. It has expanded business through acquisitions and distribution relationship with large C store chains which have multiple units. According to the group’s managers the ability to work with multiple unit stores helps keep prices at a lower level across a range of tobacco products, general merchandise and fresh food products.
d. Garber Bros. Inc. – When its founder brothers Harold and Paul Garber began a candy and tobacco wholesale business in 1947 from their top floor of Blue Bird Beverage Company, they never realized that Garber Bros would exceed beyond Massachusetts. Today the organization is still owned by the original Garber family and its list of products has expanded to include snacks, ethnic foods, coffee, ready to eat frozen foods and also automotive spares. The firm has grown by concentrating on small convenience stores and helping them grow and expand their business and clientele with a wide selection of products.
e. J.T. Davenport and Sons – Established during late 1800’s this distribution firm of J. T. Davenport faced transportation challenges due to location in remote Morehead City of North Carolina. He moved to Sanford in 1900’s which had both railroad and highway connectivity and soon grew the business at a stronger pace. The firm was ranked as 15th largest wholesaler in 2011 with revenues of $600 million. The firm has managed challenges of dips and shifts in demand by close study of market trends and avoiding passing fads. It works closely with convenience store partners to understand changing trends and stays ahead by offering latest products and unique solutions to both chain store chains and small grocery stores.
f. Atlantic Dominion Distributors – Established by Leroy W. Davis in 1875 as a cigar manufacturing company, Atlantic DD later expanded into supply and distribution of several tobacco products. By 1902 the founder bought a few more tobacco companies and formed a separate division for tobacco products and started distributing convenience store products since his network and warehouses were already available. Presently Atlantic Dominion Distributors is regarded as 19th largest C store distributor in United States as it has 10000 products in its portfolio excluding tobacco products. This is because sales of these products are reducing as consumer want low cost products and government has put a stop to selling tobacco products at pharmacies.
Common challenges faced by C store distributors – Besides these specific challenges faced by C Store distributors which they have managed to solve with relative ease, they face greater logistic and distribution problems. Some of the most common challenges of this group of business are discussed below:
a. Robbery and Theft – Besides highway holdups by armed gangs, distributors regularly face problem of small thefts which may be of less value but over a period of time they drain a sizeable amount. Besides using RFID for all their deliveries, distributors are now investing in hidden cameras to tackle pilfering by employees and staff of convenience stores.
b. Meeting demand in Time – The problem of meeting delivery schedules on time as reduced now c store chains place their requirements online with distribution center. If the distributor’s supply van is in that area then these vehicles which are connected by satellite are contacted by head-office to deliver required quantity. This technological upgrade now enables distributors to fulfill customer’s orders within 24 – 48 hours.
Suppliers and distributors are the lifeblood of convenience store chains and communities as they help in meeting their needs with constant supply of a wide variety of products. In forthcoming years all the three cogs in the network namely manufacturers, distributors and convenience stores will work together to deliver healthy food options at a reasonable price to customers at a faster pace.