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It is no longer growth by acquisition for Gary Chartrand, chairman and chief executive officer of Acosta Sales and Marketing, Jacksonville, Fla., who grew the business tenfold during the heyday of consolidation a decade ago. During his 25-year tenure with the company, Acosta has made approximately 85 acquisitions in the United States and Canada. The company puts systemwide sales at over $40 billion with more than 1,000 clients.
“The major acquisition activity in the channels we service has come to a point of saturation,” Chartrand told SN in a written reply to questions.
This is not to say that Acosta has stopped buying out others. Earlier this year, Acosta purchased Hynes, Charlotte, N.C., which specializes in health and beauty care and general merchandise, and C. Lloyd Johnson, Norfolk, Va., which services military installations. “We continue to have an open dialogue with those sales agents/service companies that strategically fit into the different growth platforms at Acosta. With our acquisition of C. Lloyd Johnson in the military channel, Acosta now provides a service offering in every channel where our clients distribute their consumer products,” Chartrand said. Acosta wants to strengthen its position in the natural foods/organic segment and in the perimeter of the store.
Aside from further acquisitions, future growth can be achieved through organic growth in the existing channels throughout the U.S. and Canada; direct-to-outsourcing opportunities in core services, including retail services, category management, space technology, sales support and headquarters selling; new channels not currently serviced, such as consumer electronics and food service; and new geographies.
One challenge is the rising cost of gasoline in a businessthat is labor-intensive and requires that merchandisers travel to store locations. Those costs have “significantly negatively impacted Acosta’s margins. We have not been able to offset the $4 gasoline costs that affect the 8,000 merchandisers that we have in the field. We have seen price increases from our manufacturers being passed along but often offset by lower unit volume in the grocery channel,” said Chartrand.
Acosta works to drive costs out of its network with enhanced technology. Recent upgrades include new handheld technology equipped with wireless transactions and GPS technology, along with an enhanced operating system, storing both product images as well as planograms on a store-by-store basis.
Acosta’s goal is to eliminate drive time completely during the day through a one rep/one store merchandising call. Chartrand said this will also be part of the company’s sustainability efforts. “We believe Acosta has and will continue to play a major role specifically in efficiently routing our people at retail and reducing drive time.”
— CHRISTINA VEIDERS
