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At century mark, Merchants celebrates number of milestones

Hattiesburg — When Merchants Foodservice celebrated its 100th anniversary last month, the privately-owned firm could also have celebrated any number of other milestones.
One is changing its name from the Merchants Company to Merchants Foodservice to indicate its true business focus.

Another is that the firm is now the country’s 19th largest foodservice company, out of 2,500 competitors. Then there’s the year-after-year growth rate in double digits and one of 18% to 20% this year, according to executive vice president Andy Mercier.

“We have a lot of momentum and good sales management in place that is keeping everyone excited and going forward,” Mercier added.

Donald Suber, president and CEO, indicated that, “Our current budget projects sales of about $188 million but I’d be disappointed if we don’t break $200 million.”

Merchants Foodservice, whose more than 5,000 customers include restaurants, schools, prisons and hospitals, has distribution facilities in Jackson and in Clanton, Ala., as well as Hattiesburg. And it has contracted to supply all 15 Mississippi and Louisiana military bases.

Over the past 100 years, Merchants Foodservice has evolved to become the only Mississippi-owned-and-operated, broad-line food distributor in the state.

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

That’s because Merchants Foodservice is privately-held, owned by the Tatum family, through the Tatum Development Corporation, a Hattiesburg holding company. The family owned part of Merchants until 1988, when they became the sole owner.
On February 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.

Suber, who has been with Merchants for 49 years, said that the company made a crucial decision in 1982, when it changed its goal from being a wholesale grocer to becoming a food service distributor.

Merchants sold its processing and manufacturing facilities and consolidated its distribution centers. This changed the small Mississippi firm into a sales and distribution force in its seven-state Southeastern marketplace.

“Once we started developing our technology, programs and sales force toward our new goal, our customers began to see us changing from a sleeping giant to a progressive foodservice distributor,” Suber said.

Merchants Foodservice now has 380 employees. Every day, its fleet of 175 vehicles — including 120 multi-temperature delivery trailers — bearing the company’s “Big M” service mark makes deliveries across the Southeast. Orders are sent directly from customers, over laptop computers used by the company’s 63 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.

One reason that Merchants Foodservice 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,” Suber said. “The future is very bright because the industry itself is growing.”

In 2003, Merchants Foodservice 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 has now been completed.
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 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. Merchants Foodservices already operates such a cold storage facility in Hattiesburg.
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.

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

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

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