This is a part of the 2013 Distribution Trends Report. The annual report was researched and written by MDM editors based on interviews with dozens of wholesaler-distributors, as well as industry experts and manufacturers. MDM also conducted a survey of its readers to uncover the trends outlined in this report.

2013 Distribution Trends Report

Safety distributors are benefiting from growth in manufacturing and increased legislation and regulations around safety.  Distributors are also benefiting from demand for training around new regulations and legislation.

Safety specialists face encroachment in the sector from large distributors. Growth in the safety sector has amplified the interest of large industrial distributors looking for growth outside of their core. “With a flat market, more nationals will continue to add adjacent product categories, and safety has seemed like the most prime category,” says Tim Loy, president of Mallory Safety and Supply in Longview, WA. “Channel convergence seems pretty natural given the low-growth reality and companies’ high-growth ambitions.” One of the biggest deals in 2012 was when electrical distributor WESCO Distribution acquired Conney Safety Products. Commodity products have been the easiest targets, leading some in the sector to increase their focus on value-added services and regulatory knowledge.

Customers want more (free) inventory management services. While vending isn’t a one-size-fits all solution, Sal Longo, CEO of Northern Safety & Industrial in Utica, NY, says he has seen increased demand for inventory management services among his larger customers, many of whom want vending as part of their overall VMI solution. Loy of Mallory Safety and Supply says many customers who been asking for vending solutions expect distributors to pay for the machines. As the need to provide free machines became apparent, Mallory teamed up with VendNovation to develop a cost-effective machine. “It’s really got a lot of momentum and traction. We have a large active pipeline of vending projects with customers,” Loy says.

Vendors consolidate. Lillian White, president of Treen Safety Inc. in Vancouver, BC, says she sees consolidation happening at the vendor level, with small companies being bought up by large companies like 3M and Honeywell, a trend she expects to continue. And as distributors continue to grow larger through acquisitions, they are increasingly looking for suppliers who can handle national accounts, which in many cases means consolidating their vendors. “The more you can consolidate with one vendor, the better service levels you’re likely going to get,” White says.

Acquisitions/Expansion

WESCO International Inc. (NYSE: WCC), Pittsburgh, PA, a distributor of electrical, industrial, and communications MRO and OEM products, agreed to buy Conney Safety Products LLC, Madison, WI, in June 2012.

Mallory Safety and Supply, Longview, WA, acquired the ENSA North America training division of Airstreams Renewables Inc. ENSA provides wind energy-specific height/rescue and confined space training and, under the Mallory umbrella, will provide equipment, equipment rental and service, safety staffing, and other solutions to its training customers.

International distribution and outsourcing group Bunzl plc acquired McCordick Glove & Safety Inc. Bunzl also acquired Vicsa Safety SA in Chile and its subsidiaries in Peru, Argentina, Colombia and Mexico; and three business that form part of the Industrial & Safety division of Jeminex Limited in Australia.

Safety Supply Corp., the parent company of Radians Inc., acquired Crossfire Safety Eyewear in January of 2013.