Sales among the top 100 foodservice equipment and supplies dealers totaled $9.637 billion in 2017, up 11.37 percent from $8.653 billion in 2016, according to FE&S’ 2018 Distribution Giants study. Sixty-five percent of the top 100 dealers reported increased sales, down 16 percent from last year. And 27 percent reported a decline in sales, which is 12 percent more compared to last year.

The composition of this year’s list of the top 100 foodservice equipment and supplies dealers by sales volume looks fundamentally different from 2017 due to rampant consolidation. In a segment known for moving rather slowly, the dealer community saw roughly 20 merger or acquisition transactions in the 13-month period spanning February 2017 to March 2018. A variety of factors continue to fuel this segment’s merger mania, none so prominent as the presence of private equity firms.

For example, when Edward Don & Co. (3) sold a stake of the company to private investment firm Vestar Capital Partners last spring, the company announced its intention to grow via acquisition. And the Woodridge, Ill.-based dealer did just that by acquiring two 2017 top 100 dealers: Atlanta Fixture and Smith and Greene.

In addition, TriMark USA (1) continued to grow via acquisition when it purchased Chef’s Toys (21) in March. This deal further solidified TriMark’s presence in southern California by supplementing its design capabilities and adding a retail element to its business in the region. This came shortly after private investment firm Centerbridge Partners purchased TriMark from Warburg Pincus. For all intents and purposes, TriMark sparked this spate of mergers and acquisitions when the dealer announced its intent to purchase Hockenbergs in February 2017.

Another company active on the acquisition trail in 2017 was Singer Equipment Co. (6). Following through on its vision to provide contiguous service down the Atlantic coast, the Elverson, Pa.-based dealer bought two Maryland dealers in the past year: Ashland Equipment (45) and Facilities Services Inc. Ashland expands Singer’s presence in the Maryland, Delaware, Washington, D.C., and Virginia markets through the dealer’s contract work with healthcare, higher education, K-12, business and industry, and restaurant operators. Facilities Services specialized in commercial foodservice equipment, engineering, custom stainless fabrication, logistics, and project fulfillment for the hospitality and lodging industries. Its scope of work included supporting major remodeling, renovation and new construction projects.

It was not just the top 10 dealers who had fun swimming in the merger and acquisition pool, though. Also dipping their toes into the consolidation waters were Great Lakes (27), which acquired Kessenich’s; BHS (28), which acquired H. Weiss; Globe, which acquired E&A; B&G (55), which acquired certain assets of Eastern Baker’s Supply and Penn Jersey Paper Co. (60), which earlier this spring bought DePalo & Sons (89).

As a result, this year’s study list includes six new companies: Tundra Restaurant Supply (23), Zesco (68), Classic Restaurant Supply (71), Bezac Equipment Company (79), Castino Restaurant Equipment & Supply Inc. (99) and Richway LLC, which does business as Market Source (100). This year’s list also welcomes back two companies: Associated Food Equipment and Supplies Inc. (76) and F.G. Schaeffer Co. (97). Finally, the list includes merged company BJ Beltram Holdings (26), the result of Trivest Partners merging B&J Food Service Equipment and Beltram Foodservice Group in June 2017.

There’s little doubt the dealer community continues to fuel its insatiable appetite for topline growth through acquisitions like the ones described above. But dealers are not alone in this.

In terms of dollar growth, TriMark USA led all dealers at $263 million. TriMark’s figures do not include Chef’s Toys’ sales for 2017, which were an estimated $83.1 million in 2017. In addition, Clark Associates grew by $229 million. In sharp contrast to its dealer brethren, all of Clark’s growth appears to be organic as the company did not report any acquisitions in 2017.

Due to all of the consolidation, dealers with more than $100 million in annual revenues account for 17 percent of the top 100, down 2 percent from last year. Mid-sized dealers, those with annual revenues of $99 million to $20 million, account for 51 percent of the top 100, up from 24 percent last year. Dealers with less than $20 million in annual revenues account for 32 percent of the top 100 dealers.

Taking a closer look at sales by market segment, the top 100 dealers report 77 percent of their 2017 sales came from commercial foodservice operators, with the other 23 percent coming from noncommercial operators. This is relatively consistent with last year’s results.

With respect to commercial operators, the top 100 dealers report 36 percent of their sales come from restaurant chains, down 12 percent from last year. Conversely, sales to independent restaurants grew to account for 64 percent of dealers’ sales to commercial operators.

The average revenue per salesperson was $2.2 million in 2017, up from $1.6 million in 2016. The average revenue per employee increased slightly to $578,489 in 2017 from $562,256 in 2016.

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