Key development: Acquisitions have taken the company into the fresh-food side.
What's next: Moves toward new service offers are intended to build the business in upcoming years.
It's not all bad to be at the nexus of a couple of powerful trends, and in a way that's where Acosta Sales and Marketing Co. finds itself.
Under the leadership of Gary Chartrand, chairman and chief executive officer, the company has grown organically and by acquisition over a period of years. The imperative for sales agencies to grow in terms of mass and geographical scope became clear in recent years simply because the principals such businesses serve have themselves became more concentrated and, at the same time, more geographically spread.
Now, Acosta, although based in Jacksonville, Fla., has operations throughout the United States and Canada. Possessing that kind of scope is very nearly table stakes for the agency business. Chartrand told SN that the three largest agencies currently do about 90% of the business, with the balance going to small, regionalized agencies. In his 23 years in the agency business, Chartrand said, he has seen the business consolidate from thousands of regional food brokerages to the current state of the industry.
Acosta represents more than 1,300 manufacturers that together swing more than $50 billion of sales at retail. Acosta is privately held.
Trends that may auger well for Acosta include that manufacturers and retailers are seeking to efficiently execute tactical store-coverage functions, such as reworking section sets and cutting in new products. And that's one of the chief spaces Acosta occupies. Acosta's in-store services are executed by representatives who arrive at stores with a script in hand that mandates tasks to be accomplished, and which leads them through the store in a particular order of priority. Representatives tend to be vertical specialists in a single retail banner in a bid to promote the acquisition of specific retail-brand skills.
Also among Acosta's skill sets are abilities concerning management of data-entry functions, such as order administration and deduction management. The company also has more strategic capabilities, such as sales representation of manufacturers at retailers' headquarters, information-technology capabilities that can result in activities such as category management, the ability to field promotions and others.
As is generally the case in the current-day agency business, manufacturer clients can choose any combination of service elements from the smorgasbord Acosta offers, or choose the full range of services. In what may be a departure from the usual, though, 22 of Acosta's top 25 manufacturing clients choose all offered services, Chartrand asserted.
During the past year or so, Acosta has further built on its offer by continuing to acquire businesses, particularly those associated with service departments in supermarkets' perimeter areas. Late last year, Acosta acquired Reliance Food Brokerage and Premier Food Marketing. The former is a specialist in a wide range of fresh-food product, the latter in bakery products.
"The market has picked up quite a bit with the fresh business," Chartrand remarked. "Our strategy of building into that area with acquisitions is paying huge dividends. In the meat and deli area, for instance, we now have new national clients in ConAgra, Sara Lee and Hormel."
In the future, he said, Acosta will keep an eye out for further acquisitions in "adjacencies," such as consumer marketing and research. Indeed, Acosta recently brought on board a chief strategy officer now tasked with building research and advanced-analytics capabilities for purposes that include the rounding out of Acosta's growth strategies. A chief information officer was also added lately.
And what shape might the new growth plan take? In its most fundamental form it's not too complex: "We intend to convince manufacturers that now insource to outsource with us," Chartrand said. "We think there is headroom there."
