Insights on M&A activity, talent-retention practices and strategies for overcoming 2022 headwinds garnered the most reads on MDM’s website during the first three months of the year.
As distributors and manufacturers continue to battle the protracted impacts from the COVID-19 pandemic, our readers have been drawn to coverage of high-dollar acquisitions (which haven’t been slowed by pandemic-related forces) as well as tips for reshaping distribution workforces and business practices in the coming year.
These were MDM’s most-read stories during the first three months of 2022:
Motion Industries announced in December that it was acquiring Kaman Distribution Group for $1.3 billion. Distribution leaders are still taking about it, and probably will be for some time. During an MDM podcast, Motion President Randy Breaux share in-depth details on how the deal happened and how the companies plan to fit together.
PathGuide Technologies President and CEO Eric Allais says distributors must rethink the way they do business in the warehouse. Companies have struggled to hire workers, creating labor issues across the industry. “For distributors, attracting and retaining warehouse workers to better manage the labor shortage — and do it profitably — remains one of the most significant challenges,” Allais writes. He offers five tips for attracting more and better warehouse workers, including investing in the right technology and committing to safety standards.
In the first podcast from 2022, MDM CEO Tom Gale and Al Bates, principal of Distribution Performance Project, explore ways that smaller distributors can gain competitive advantages against their larger competitors. While larger distributors have an advantage in technology because of deeper pockets, Bates says that the higher-tech the industry gets, the more leaders may lose track of “high-touch,” which can create opportunities into a significant share of the marketplace (millennials as well as relatively older customers).
Near the end of February, the Sonepar Group announced it had struck a deal with private equity firm Nautic Partners, LLC to sell Vallen Distribution. While financial details were not disclosed, Vallen North America CEO Chuck Delph said moving into the Nautica family would allow it to “focus on accelerating performance while continuing to provide our customers the excellent service, solutions and products they expect.”
After acquiring New Jersey-based paper company SupplyitAll, foodservice and JanSan distributor Brady IFS said the deal is expected to push its annual revenues above $1 billion. BradyIFS Chairman and CEO Kenneth Sweder said SupplyitAll’s “culture and go-to-market strategy align well with ours, and their commitment to providing superior customer experiences will ensure our continued growth in MDMthis attractive geography.” BradyIFS said the company offers “one of the most comprehensive product and service programs in its region.”
Despite continued pandemic and supply-chain pressures over the second half of 2021, U.S. distributors recorded a stellar year in 2021 for revenues while protecting margins. In January, the outlook for 2022 was overall positive, as economic and market indicators pointed to a “new normal” with disruptors stabilizing. Those were a few of the takeaways from MDM’s 2022 Annual Distribution Industry Outlook webcast. Total U.S. wholesale distribution sector revenues in 2021 increased 22% to roughly $7 trillion, according to analysis presented by MDM.
Michael Stanisz, partner at Revenue Management Labs, writes that there are three key strategies to achieve price optimization: cost-based or cost-plus pricing, market-based pricing, and value-based pricing. In his analysis, Stanisz examines the benefits and drawbacks to each pricing strategy, as well as the correct time and place to implement each one.