Acosta Sales and Marketing Company, Inc. - Company Profile, Information, Business Description, History, Background Information on Acosta Sales and Marketing Company, Inc.

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Company Perspectives

Founded in 1927, Acosta is a professional services company dedicated to delivering results and currently represents more #1 and #2 brands than any other sales agency in North America. That's why companies choose Acosta to help them chart a course aimed toward success.

History of Acosta Sales and Marketing Company, Inc.

Privately owned Jacksonville, Florida-based Acosta Sales and Marketing Company, Inc. is one of North America's largest sales and marketing agencies serving the foodservice and grocery industries. The company's primary service is headquarters selling, acting as a marketing and sales agent for about 1,300 consumer products manufacturers, helping them to gain placement on the shelves of top supermarkets and other retail outlets, such as convenience stores, drugstores, and mass merchandisers. Another Acosta service available to clients is retail fieldwork. Acosta sales representatives visit stores to ensure that client products are properly displayed, are not out of stock or beyond their expiration date, are accurately priced, and are presented to consumers in the best way possible. Acosta also offers space technology services that help clients through the use of sophisticated software to determine the ideal location on the shelves of local retailers. Finally, Acosta is involved in category management, offering clients a wide range of advanced management tools to help in decision making, including consumer insights, syndicated data analysis, pricing and ad tracking, customer reviews, client scorecarding, and the use of Acosta's web-based communication tool, TeamNET.

Company Roots Dating to the 1920s

The man behind the Acosta name was Louis T. (Lou) Acosta, who in 1927 opened a small food product sales and marketing agency that took the name L.T. Acosta Company, Inc., servicing the Jacksonville area. In 1956, Lou Acosta persuaded Robert H. (Hy) Albritton, owner, president, and CEO of Common & Co. Food Brokers, to merge his company into L.T. Acosta Co. and become Acosta's executive vice-president. With Lou's retirement in 1959, Hy Albritton became president of L.T. Acosta Co. By the end of 1974, Acosta had grown from 11 employees to 27. It remained a small, single-market sales agency, employing a little more than a dozen people generating annual sales of $500,000, when Delmer (Del) Dallas took over as president in 1974. He would be the man most responsible for transforming Acosta into a regional powerhouse. Dallas grew up on a Mississippi farm, and then worked his way through Mississippi State University, where he received a marketing degree in 1953. He went to work for Procter & Gamble in sales and sales management, a job that took him throughout the southeastern United States. He then took a management position at a P&G subsidiary, the Clorox Company, before moving to Jacksonville in 1966 to become a partner at Acosta.

After becoming Acosta's president, Dallas began an expansion program. The first step was to break out of the Jacksonville market by opening a Tampa, Florida office. At the time, it was something of a bold step, because food sales and marketing agencies generally limited themselves to a single market. Acosta was one of the first to represent manufacturers in more than one market. In 1977, Acosta opened an office in Birmingham, Alabama, and in 1981, opened an office in Miami, Florida, allowing the agency to offer service throughout the entire state of Florida.

In 1983 Dallas began to expand the business beyond Florida through the acquisition of Raley Brothers in the state of Georgia to become a regional player. By the end of the decade Acosta entered the Carolinas, but the 1990s would see a host of changes in the food business that forced regional agents such as Acosta to grow ever larger in order to compete.

Industry Changes in the 1990s

At the start of the 1990s, the supermarket industry was composed of a lot of small local and regional chains. In 1992 the top five chains accounted for less than 20 percent of all grocery sales, but as mass retailers including Wal-Mart began to sell groceries the dynamics in the industry changed. Groceries were already a low-margin business, and in order to compete with Wal-Mart, which could use its size to drive hard bargains with suppliers and offer low prices to consumers, supermarket chains had to become larger as well. Because of low financing costs, chains found it easier to buy stores than to build them, leading to a wave of major mergers. By the end of the 1990s the top five grocery chains controlled 40 percent of all sales, and the consolidation trend continued. Faced with only a handful of powerful supermarket chains to sell to, manufacturers began to consolidate in order to maintain their own competitive edge. As a result, ever larger manufacturers were selling to nationwide chains, and both wanted to deal with national sales and marketing agents rather than contend with scores of regional sales agents. Hence, the sales and marketing agents themselves were forced to consolidate, as the weaker players were swallowed by the stronger until only a few survivors were left. Acosta was one of those survivors.

As Dallas was growing Acosta, he also was grooming his successor, Gary Chartrand. A New Hampshire native, Chartrand was a veteran of The Carnation Company when Dallas recruited him for Acosta in 1983. Chartrand became president in 1993, was named chief executive officer in 1996 (the same year Dallas retired at the age of 65), and was elected chairman of the board in 1998.

It was not until 1998 that Acosta began its transformation from a regional company to a national concern wielding tremendous power. Chartrand explained to Jacksonville Business Journal in a 2001 profile, "The best way to protect our company was to be coast to coast." The plan was to buy the best in class in each market. The first in a series of steps to Acosta's becoming a national player was the merger in July 1998 with PMI-Eisenhart, serving the Midwest. The pace picked up considerably in 1999. First, in June 1999, Acosta acquired Kelley-Clarke, a leading agency in the West, then two months later northeast agency MAI was added, and finally in August 2000 Acosta reached an operating agreement with Luke Soules, which did business in Texas and New Mexico. (Acosta would acquire Luke Soules outright in 2003.) "In about 15 months," Chartrand told Jacksonville Business Journal, "we took the company from [doing business] in about 25 percent of the country to 100 percent." The first contract for national representation, courtesy of Minute Maid, was soon forthcoming in September 1999.

Chartrand, unlike some of his chief rivals, did not take on significant institutional debt to achieve the company's growth. Instead, according to the Florida Times Union, "Acosta negotiated deals where, not only were the sellers paid over a period of years, but the majority of the sellers were retained to work in the business, giving them a powerful incentive to both make the deals work and to grow the business in markets they already know well. 'The way he put it together, frankly, is brilliant,' said Tony Marinatos, managing director of Chartwell Capital Management a private Jacksonville investment firm."

One of Acosta's three chief national rivals, Dallas-based Marketing Specialists Corp., incorporated in 1998 and borrowed money to finance a series of acquisitions. The new business failed to perform as hoped, and the company filed for Chapter 11 bankruptcy protection in May 2001. After they filed for bankruptcy, Acosta reached a transition agreement with Marketing Specialists to assist the estate in the collection of its receivables and to hire some of its employees. All told, Acosta hired more than 1,700 of Marketing Specialists' 5,700 employees. Some, but not all, of Marketing Specialists' clients transitioned their business to Acosta and its competitors.

Even as Acosta was becoming a national force, it was taking steps to become involved in international markets. Knowing full well that retailers would go global, the company formed a consortium of leading consumer products distributors around the world. For the most part, Acosta helped manufacturers interested in global expansion make connections with these distributors. It was then paid finders' fees by the distributors.

International Acquisitions in the Early 2000s

Acosta completed its first international acquisitions in 2002, in one stroke picking up four regional sales and marketing companies in Canada: Ontario-based Thomas, Large & Singer; Quebec-based Belgo International; Western Canada's Tees & Persse Brokerage; and Trebley Atlantic, based in the Maritimes. The resulting Acosta Canada would have 300 employees working out of 13 offices spread from coast to coast. The deals also made Acosta the largest sales and marketing firm in North America. To serve its clients wherever they did business, Acosta forged alliances with local brokers that allowed it to spread its influence globally.

Acosta expanded on other fronts in the early 2000s. It created a subsidiary, MatchPoint Marketing, to handle a full range of promotional, advertising, and other related projects for clients. It also created another subsidiary, Natural/Specialty Sales Inc., a national sales and marketing solution designed exclusively to serve manufacturers of natural, organic, gourmet, and ethnic foods.

While Acosta and the other large sales and marketing companies that survived the consolidation of the 1990s had no choice but to grow ever larger or perish, both manufacturers and grocers were not necessarily pleased with the reduction of local and regional sales and marketing agents. According to a 2001 New York Times article, "With so few brokers to choose from, a manufacturer is left in a bind, because it is hard to find an agent who does not already represent a competing brand." With only three national sales and marketing agencies (after the demise of Marketing Specialists), the fourth largest brand and smaller in a particular category was essentially out of luck. "The consolidation also ties the hands of manufacturers of the three top-selling brands in any category because they have nowhere else to go. 'It's not like you can drop your broker if you don't like the service,' said a manufacturer of a top-selling snack food ... . 'The other two are working for your competitor.'" The alternative was for manufacturers to create their own direct sales forces, but that could cost as much as 6 percent of the product's wholesale price, at least twice as much as what a broker charged. On the other hand, grocers had their own complaints that the shelves were not as well maintained as before, and that the introduction of new products and changes in prices were often delayed. "Now, there may be only one broker working an entire aisle, so there's no fight there, no competition," Richard T. Frede, vice-president of Schnuck Markets, a Midwest supermarket chain, told the Times. "It makes them real lethargic resetting the shelves."

Acosta continued to expand its domestic business, and was especially interested in building Acosta's presence in so-called perimeter areas of the supermarket, such as fresh foods, which not only accounted for a third of all supermarket sales but was also the fastest growing area of the store. To this end, in July 2003 Acosta acquired The Vaughn Group, a fresh foods sales and marketing agency serving the Texas market. Later in 2003, Acosta strengthened its fresh foods business in the Mid-Atlantic region by acquiring Priority Foods Brokers, which served the Baltimore, Maryland, and Washington, D.C. markets. In June 2004, Acosta looked to the West Coast, acquiring Infinity Food Marketing and Carman & Associates, two major meat and seafood sales and marketing agencies serving northern California. The addition of Cincinnati-based Reliance Foods Brokerage L.L.C. in October 2004 bolstered Acosta's fresh food business in the Midwest. Then, in November 2004, Acosta acquired Premier Food Marketing, Inc., a sales and marketing agency specializing in bakery products in New England, the Eastern Great Lakes area, the New York Metropolitan area, and the Mid-Atlantic states. Also during this period, Acosta acquired Specialty Partners, Inc., a specialty and natural foods sales and marketing company, a move that strengthened Acosta's position in natural foods and specialty products in the Northeast, Midwest, and Southeast.

In 2005 Chartrand told Supermarket News that the emphasis on fresh foods was "paying huge dividends. In the meat and deli area, for instance, we now have new national clients in ConAgra, Sara Lee and Hormel." Chartrand also told the trade publication that Acosta planned to make further acquisitions in "adjacencies," such as consumer marketing and research. To help in providing direction, Chartrand hired a chief strategy officer to build research and advanced-analytics to plot the company's future course, as well as a chief information officer to make sure that the company's information technology capabilities kept pace with its ambitions.

Principal Subsidiaries

MatchPoint Marketing; Natural/Specialty Sales Inc.

Principal Competitors

Advantage Sales and Marketing, L.L.C.; CROSSMARK.


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