COVER STORY: Life After Fleming: A Fleming-less future
By By Tom Weir
Wednesday, October 1 2003
Wednesday, October 1 2003
Published on AllBusiness.com
The post-Fleming world of grocery distribution may turn out to be a good place for creative regional wholesalers and for many independent supermarkets that struggled to compete while they were being supplied by an increasingly unreliable Fleming.
It's too early to be sure, but industry observers see a number of signs that the death of the nation's second-largest grocery wholesaler will turn out to be less than tragic for the business as a whole, although they lament the hardships imposed on longtime Fleming executives and associates.
The competitive situation remains clouded in the wake of Lewisville, Texas-based Fleming's sale of its grocery wholesaling assets to C&S Wholesale Grocers of Brattleboro, Vt. in late August. C&S, which rose from small regional player to third-ranked U.S. wholesaler in less than a decade, immediately sold off some of the acquired properties to several regional distributors, while keeping Fleming's assets in California and Hawaii. Last month, C&S and No. 1 wholesaler Supervalu agreed to trade Eden Prairie, Minn.-based Supervalu's New England operations for the remainder of the Fleming assets C&S bought in the Midwest.
"There's going to be a real renaissance for regional wholesale," predicts Burt P. Flickinger III, managing director of Strategic Resource Group, a New York consultancy, who cites such companies as Grocers Supply, Merchants Distributors, Laurel Grocery, Associated Grocers of Seattle, Associated Wholesale Grocers of Kansas, Roundy's, White Rose, and Krasdale. "They will prove themselves to be competently competitive with Supervalu and, from what I'm hearing from the retailers, far better supporters of independent retailers and small chains than some of the chain-oriented wholesalers—Fleming before, C&S now—with the exception of Supervalu," Flickinger says.
Effective competitors
John R. Block, e.v.p. of the Food Marketing Institute and head of its wholesale division, says regional wholesalers are ready. "I think that they have found a way to compete rather effectively in their own regions, where they're not trying to be everything to everybody across the whole nation," Block says. "If you just look at the food retail business out there, I think the companies that are doing better are some of these that are working regionally."
"This industry is almost like nature; it cannot tolerate a vacuum," adds FMI s.v.p. Michael Sansolo, chief of the independent operators unit. "What happens is if there's a level of service or there's a need within the industry that isn't being met, somebody recognizes it. We're just such a competitive and creative industry, and someone will see that as opportunity," he says. "It could be that five years down the road we're going to have a very different mix of
It's too early to be sure, but industry observers see a number of signs that the death of the nation's second-largest grocery wholesaler will turn out to be less than tragic for the business as a whole, although they lament the hardships imposed on longtime Fleming executives and associates.
The competitive situation remains clouded in the wake of Lewisville, Texas-based Fleming's sale of its grocery wholesaling assets to C&S Wholesale Grocers of Brattleboro, Vt. in late August. C&S, which rose from small regional player to third-ranked U.S. wholesaler in less than a decade, immediately sold off some of the acquired properties to several regional distributors, while keeping Fleming's assets in California and Hawaii. Last month, C&S and No. 1 wholesaler Supervalu agreed to trade Eden Prairie, Minn.-based Supervalu's New England operations for the remainder of the Fleming assets C&S bought in the Midwest.
"There's going to be a real renaissance for regional wholesale," predicts Burt P. Flickinger III, managing director of Strategic Resource Group, a New York consultancy, who cites such companies as Grocers Supply, Merchants Distributors, Laurel Grocery, Associated Grocers of Seattle, Associated Wholesale Grocers of Kansas, Roundy's, White Rose, and Krasdale. "They will prove themselves to be competently competitive with Supervalu and, from what I'm hearing from the retailers, far better supporters of independent retailers and small chains than some of the chain-oriented wholesalers—Fleming before, C&S now—with the exception of Supervalu," Flickinger says.
Effective competitors
John R. Block, e.v.p. of the Food Marketing Institute and head of its wholesale division, says regional wholesalers are ready. "I think that they have found a way to compete rather effectively in their own regions, where they're not trying to be everything to everybody across the whole nation," Block says. "If you just look at the food retail business out there, I think the companies that are doing better are some of these that are working regionally."
"This industry is almost like nature; it cannot tolerate a vacuum," adds FMI s.v.p. Michael Sansolo, chief of the independent operators unit. "What happens is if there's a level of service or there's a need within the industry that isn't being met, somebody recognizes it. We're just such a competitive and creative industry, and someone will see that as opportunity," he says. "It could be that five years down the road we're going to have a very different mix of
