Merchants Foodservice

HATTIESBURG – Merchants Foodservice is a venerable company with a proven track record but isn’t content to rest on its laurels. Instead, the business that began in 1904 changes with the times and evolving trends to remain vibrant.
According to President and CEO Andy Mercier, the company did $250 million in sales last year and is projecting growth of roughly 9% in this fiscal year that began on Oct. 1. “We are ranked number 19 out of the 2,600 foodservice distributors operating in the country,” he said. “We have a bright future and can compete with the big guys. I expect us to maintain the double digit growth we’ve had over the last five years.”

Mercier said the company can make quick decisions and can turn on a dime to rectify a problem because it’s a privately-owned business. It is the only Mississippi-owned wholesale food distributor in the state.
“We have a small core of an executive management team,” he said. “It’s a team effort to do all that we do and stay ahead of trends.”

The stable company began in 1904 with seven stockholders as the Fain Grocery Company to service the retail and wholesale grocery trade. The charter was amended in 1907, changing the name to The Merchants Grocery Company and again in 1927, changing it to The Merchants Company. Growth in sales and facilities continued to grow with deliveries up from two states to eight states in the Southeast.

A major shift was experienced in 1982 when Merchants changed its focus from servicing grocery stores to restaurant sales as a broad line food distributor under the leadership of Don Suber who recently retired as CEO after 50 years with the company. With that shift, the company’s name changed to Merchants Foodservice.
“I saw an increase in eating out coming and mom and pop stores going away as big grocery chains took over,” Suber said. “I felt like the direction would change and decided this was the way we should go.”

Suber was right on the mark, noting that in the 1980s, about 75% of food budgets was spent in grocery stores. Currently, that percentage has declined to less than 50% spent in grocery stores.
Mercier, 45, is only the 8th president in the 100 years of the company’s history. “It is truly an honor to follow Mr. Suber and I’m extremely proud of what he built,” he said. “I won’t match his record but I hope to have 35 years here.”
Rick Cline, vice president of sales, says the company is adding more sales representatives to the 60 they now have to better handle growth in metro areas. “We’re growing because we’re the largest distributor in the Southeast and offer an alternative to the big food distributors,” he said. “We carry about 7,000 items and 10,000 to 11,000 in some areas. We’re expanding our markets and the future looks really bright.”

In 2002, Merchants Foodservice went into chain restaurants, selling to Kentucky Fried Chicken, TCBY, Mr. Gatti’s, Bumpers and Dairy Queen among others. “We must change to grow,” Mercier said. “The chain business is working out well. That segment is growing faster than other restaurants and we had to get into it to grow.”
He says the company has to be a jack of all trades and be flexible. That includes delivering frozen food to schools and military bases, delivering to every school in Mississippi and every base in Mississippi and Louisiana. Merchants provided food, ice and water to military and National Guard units and the Red Cross following hurricanes Katrina and Rita in 2005.
“That’s part of what we do,” Mercier said. “We were ready to respond and knew they needed help because we’re located in the affected area.”

For their disaster response to the military, Merchants Foodservice was honored with an award from the Department of Defense. They were nominated by the Defense Supply Center in Philadelphia for ‘outstanding customer service during the hurricane relief effort and provided the same high level of service to our defense customers.’
Mercier says Merchants Foodservice must anticipate trends and what customers will order during different seasons. “We must present new products to customers,” he said. “It’s a fast-paced industry and things are constantly changing.”
Additionally, there’s no delay time and the company must be ready to deliver quickly. “Restaurants order today and we deliver tonight. We have to be ready when the order hits the computer,” he said. “We must get it there 99% right. The industry demands that.”

Increased gasoline prices have made an impact. “With 120 trucks, we’re in the trucking business too,” Mercier said. “Our energy costs are up 60% this year. The rise in prices made an impact in the whole supply chain.”
Looking ahead, he says Merchants Foodservice will concentrate on penetrating their service and delivery area, and will explore new locations for distribution centers too. They’ll also look at improving technology and cutting costs.
“We have a long history of serving and employing Mississippi residents,” Mercier said. “We employ 400 people and make a substantial economic impact. I feel a lot of responsibility to our employees and I take it seriously.”
He noted that the company has been the only company listed on the Mississippi Business Journal’s Fast 40 Companies every year since the list was started. That’s an impressive record for a 100-year-old company.

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