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The Merchants Company closes in on 100-year milestone

HATTIESBURG — In some four months, The Merchants Company will have been in business for 100 years.

Over this century, The Merchants Company has evolved to become the only Mississippi-owned and operated broad-line food distributor in the state, with annual sales of $150 million. Of the country’s 2,600 food service distributors, Merchants is 24th in sales volume, according to Institutional Distributor Magazine.

“Whatever we’re able to do, we are plowing it back into the (Mississippi) economy, whereas the other companies are taking it out of the state of Mississippi,” said Donald B. Suber, president and CEO.

The Merchants Company, whose more than 5,000 customers include restaurants, schools, prisons and hospitals, has distribution facilities in Jackson and in Clanton, Ala., as well as its Hattiesburg headquarters. And now it has contracted to supply Mississippi and Alabama military bases.

Not only is Merchants one of the fastest-growing Mississippi-owned businesses, but it’s also a privately-held firm, owned by the Tatum family, through the Tatum Development Corporation, a Hattiesburg holding company.

The family has been in Hattiesburg since the beginning of the 19th century. They owned part of The Merchants Company until 1988, when they became the sole owner.

On Feb. 11, 1904, seven stockholders organized the Fain Grocery Company in Hattiesburg, with 10 employees and two horse-drawn drays, to supply Hattiesburg’s wholesale and retail grocery trade. A charter amendment in 1927 changed the firm’s name to The Merchants Company.

Over the next several decades, there was steady growth and increase in sales volume, as the company operated, at various times, a corn meal mill, grain elevator and feed mill, feed manufacturing plant, cold storage plant, meat processing facility, poultry operation, cold storage facility to handle fresh fruit and vegetables and a packing house to provide beef, pork and other meat. There were seven distribution centers.

In 1982, though, the company set out on an entirely new course as it converted into a full-line food service distributor. The grain elevators were sold and the seven distribution centers were consolidated into two expanded facilities.

The Merchants Company now has 380 employees. Every day, its fleet of 175 vehicles bearing the company’s “Big M” service mark — including 120 multi-temperature delivery trailers — makes deliveries in eight Southeastern states. Orders are sent directly from customers via laptop computers used by the company’s 60 sales people.

And the quantity of merchandise ordered is impressive: Some 6,000 orders, consisting of 150,000 cases, are delivered weekly.

More than 5,000 items are kept in stock, including such brands as Frosty Acres, Sara Lee, General Mills, Ventura Foods, Zartic, Tyson, Wampler’s Farm, Kellogg’s, Simplot, House of Raeford, Allen Canning, Mrs. Smith’s Bakery, Polk’s Meat Products and Tampa Maid Foods.

Always in stock are dry mixes, canned and dry milk; frozen biscuits, waffles and sweet rolls; frozen cakes, cookies, pies, rolls and cheesecake; crackers, bread crumbs and stuffing mix; bacon, sausage, hot dogs, barbecue pork; Mexican speciality items; napkins, tissue and towels; fresh and frozen chicken and turkey; fresh and frozen seafood; canned and frozen vegetables; canned fruit and fruit juices, and just about any other grocery item one could name.

One reason that The Merchants Company is able to offer such a variety of merchandise is that it belongs to F.A.B. Inc., the oldest member-owned buying group in the county.

“We have positioned ourselves to take advantage of the growth opportunities that are out there,” according to Suber. “The future is very bright because the industry itself is growing.”

Suber said that sales continue to grow, even though the economy is down, with sales up 19% from last year.

“We have aggressive plans for next year. We’re projecting sales of $165 million but I’ll be disappointed if we don’t reach $200,000.”

Suber, now in his 48th year at Merchants, started out on the Coast, working behind the counter for $50 a week. He held various positions as he moved up the ranks at Merchants, and became president and CEO in 1998.

Last year, The Merchants Company undertook an $8-million expansion of its Jackson distribution facility that called for the renovation of a warehouse in Hawkins Field Industrial Park. The work was completed this past July.

This new warehouse is 227,000 square feet with ceilings up to 36 feet and the loading dock is 50 feet wide. The warehouse is on 32 acres, making future expansion easy.

The old warehouse was only 118,000 square feet, with lower ceilings, so the new facility is actually triple its size, and its loading dock was 36 feet wide. It was on 13 acres and could accommodate only one more expansion.

This former warehouse has been changed into a commercial cold storage facility, with the capacity to store 12 million pounds. It is expected to be used mainly for local products, such as meat and catfish, but will also provide cold storage for vegetables from out of the area. The Merchants Company already operates such a cold storage facility in Hattiesburg.

The Merchants Company’s Jackson plans include a truck maintenance facility on site. Including the trucking fleet and inventory, this will bring the Jackson investment to $12 million, according to Suber.

This expansion provides other benefits to Jackson, such as the yearly purchase of 800,000 gallons of fuel, resulting in $400,000 in fuel taxes; monthly electricity bills of $25,000; some 400 overnight stays by executives annually, and the payment of more than $2 million, over 10 years, in school taxes.

When the Mississippi Business Journal listed The Merchants Company among the state’s Fast 40 — the top 40 fastest-growing, privately-held companies in Mississippi — publisher Joe D. Jones said, “These are the companies who are creating lots of jobs and investing mega bucks in our economy. To some extent, these companies are responsible for the economic landslide, frequently referred to as the ‘Mississippi Miracle.’ They deserve to be honored.”

Contact MBJ contributing writer at George McNeill at mbj@msbusiness.com.

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