It’s safe to say that 2020 was a year unlike any other for distributors as the pandemic created a seismic shift across the distribution sectors. With 2020 firmly in the rearview mirror as the industry bounces back, it’s time to take a sneak peek at how last year impacted MDM’s annual Top Distributors rankings.
During a June 17 webcast, MDM’s Elizabeth Galentine, editor-in-chief, and Senior Editor Eric Smith discussed the Top Distributors 2021 rankings. The rankings are based on 2020 reported and estimated revenues. For the full version of the list, as well as interviews with some of the top distributors, check out the next issue of MDM Premium — out on Friday, June 25.
Meanwhile, here’s a snapshot of the top-10 distributors overall.
The top three spots did not change from 2019 to 2020, with Ferguson Enterprises, W.W. Grainger and Amazon Business, respectively, holding steady. Of note, all three posted increased revenues in 2020 versus 2019.
“I think that [the company] that everybody in this space is most curious about, and I would include us in that category as well, is Amazon business,” Smith said on the webcast. “They’ve been a really interesting company to rank. We reported a couple of months ago that Amazon Business reported that they had $25 billion in annual sales in 2020. But the parent company Amazon.com, of course, the online retail giant, actually doesn’t break out Amazon Business on its balance sheet.
“If we went purely off what they said, if we went purely on revenue of $25 billion, that would place Amazon Business squarely at the top of this list. We’ve talked about this over the last few years. We don’t see their Amazon Business distribution side as purely as an apples-to-apples comparison with traditional distributors. They’ve been in this slot for a couple of years. We think based on growth industry-wide, and sector-wide growth, that [No. 3] remains a fair spot for them to be in.”
Shifts in the list
The missing piece in the top 10 list was HD Supply. The company ranked No. 4 last year prior to its 2020 acquisition by Home Depot for $8.7 billion. It was a homecoming of sorts; in 2007, Home Depot spun HD Supply off into private equity. Prior to the Home Depot deal, HD Supply sold off its Construction & Industrial – White Cap division to Clayton, Dubilier & Rice for $2.9 billion, taking it out of the top 10. Smith said while HD Supply still has a spot on the current Top 40 distributor list, he expects it to eventually drop off entirely, as Home Depot recently said it will not break out HD Supply numbers moving forward.
With HD Supply out of the top 10, Winsupply (No. 9) and Core & Main (No. 10) joined the top 10. Airgas, an Air Liquide company (No. 4), Motion Industries (No. 5), The Fastenal Company (No. 6) and Watsco (No.7) all moved up one spot on the Top 10 leaderboard, while McMaster-Carr went from No. 10 in 2019 to No. 8 in 2020.
During the webcast, Smith also gave a rundown on 2020 M&A activity and discussed how some of the deals impacted the 2021 Top Distributors rankings.
“As we come out of COVID, there’s a lot of pent-up M&A supply,” Smith said. “A lot of deals stalled last spring and summer as companies either chose or were forced to sit on the sidelines, and now they’re looking to get back in the game.”
Watch the complete webcast here.