When we launched the MDM Market Leaders list of top distributors eight years ago, we simply wanted to provide a clearer picture of who the key players were in each product sector. But over the years, these lists have also provided a glimpse into how the competitive landscape is constantly changing.
For example, most of the distributors we talk to are aware that they compete on some level with Grainger, but some noted that they weren't aware how directly they competed in some areas. Power transmission products and motors make up about 3 percent of Grainger's total revenue – enough to make them the sixth largest power transmission and bearing distributor on this year's list.
Consolidation and other market moves continue to change who your competitors are. No sector has highlighted this better than the building materials and construction distributors list. Since our first ranking in 2010, half of the companies in the top 10 have ceased to exist. Three of them were acquired by other companies on the list, while BMC Select and Stock Building Supply merged to create BMC Stock Holdings.
And it's not just the largest buying the smallest; we've seen examples of the largest going away, as well. Last year, Builders FirstSource jumped to the top of the building materials list by acquiring ProBuild, which had held the No. 2 slot. ABC Supply reclaimed the top position this year by acquiring last year's No. 10, L&W Supply.
HD Supply's recent history also highlights the changes in competition, but in the opposite direction. In 2010, the diversified distributor appeared on four of our top lists; today it is down to two after making several divestments.
The same thing is happening on many of the other lists. If the larger players aren't buying up their competitors, new competitors are acquiring their entry into those markets, as was the case with The Home Depot's acquisition of Interline Brands. Lowe's will likely be making an appearance on the 2018 industrial list now that they've followed suit and started acquiring into that market.
Through these lists, we see the toll taken on companies involved in certain markets – oil & gas being the most prominent example this year – while other companies that operate in the same sector thrive because they lack the direct exposure to those trouble spots.
MDM Market Leaders is a fascinating project to undertake each year. And it wouldn't be possible without all the companies willing to share their information with us. Thank you.
