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This is a part of the 2015 Distribution Trends Special Issue. The annual feature was researched and written by MDM editors based on interviews with dozens of distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this issue.
2015 Distribution Trends Special Issue
The FDA's involvement in food gases is a major development for the sector, says Tom Biedermann, president of Airweld Inc. and 2015 president of Gases and Welding Distributors Association. Any type of gas that goes into a food product, such as CO2 for beer kegs, is considered food and will be regulated as such. "It is a huge, huge issue especially when the FDA begins to measure what you're doing with it," he says. "You have to make sure you're compliant with all their food gas rules." Distributors who work with food gases will need to document their processes, keep facilities up to different standards and make sure labeling complies with the newly adopted Globally Harmonized System of Classification and Labeling of Chemicals. As Bob Yeoman wrote in a recent issue of Welding & Gases Today: "If you dispense food and beverage gases, you are no longer an industrial gas producer. You are a food processing plant. And there are consequences if you don’t know the rules."
The softening of the oil patch has the same effect here as it does elsewhere. Companies with heavy exposure to the industry – those that distribute products specifically to the oil & gas sector – are struggling. But other gases and welding distributors are benefitting from lowered oil prices through reduced transportation costs and even lower utility bills in the winter.
Consolidation in the industry rolls on, with some of the big players like Airgas and Tech Air getting bigger as they snatch up smaller distributors.