TriMarkUSA Acquires Adams-Burch: The March of Consolidation in Hospitality Continues

It was announced yesterday that TriMarkUSA has acquired Adams-Burch the venerable equipment and supplies dealer based in Landover, Maryland. Congratulations to all involved. Both companies have outstanding reputations and it certainly seems like a great fit. TriMark acquires a foothold in the ever-growing VA/DC/MD region and Adams-Burch gains the strength of national scale that allows increased access to larger national hospitality chain accounts and national healthcare systems.

We wrote back in September of 2014 (link below) about the evolution underway in the North American foodservice supply business. At that time, we wrote about Trimark essentially “trading up” in its equity partner of Warburg Pincus allowing them to continue their growth to higher levels of foodservice market share. We expect that this growth and consolidation will continue unabated for Trimark and others in the foodservice supply chain. The benefits of economies of scale have resulted in large national (and international) chain operators of all types from restaurants and hotels (think Marriott/Starwood) to healthcare providers and the resulting need for supply chain partners who can match up both geographically and financially.

And just last week, coming out of the NRA Show, we wrote about tabletop companies who are “better resourced” moving away from the rest of the pack in terms of competitors. Leadership comes in many forms, but those tabletop supplier companies who can keep up with national and international consolidation will continue to grow and, over the long term, prosper most.

So, what about the smaller, independent operator, dealer, or tabletop supplier? What will be their place in this increasingly dynamic – and increasingly global – foodservice business?

Today, if smaller companies – of all types, in all segments – are to survive and grow, it’s our belief that more than ever they must differentiate through either unique product and menu offerings…. through service that is dramatically different than competition…. or, by offering a new and differentiated customer/guest experience. Offering similar menu items, tabletop products, or guest experience is only going to accelerate the compromise in profitability to remain in place and, with that eventually the ability to compete comes into question.

But, as we also have said, within every industry undergoing consolidation there remains opportunity. But, it is not an easy opportunity. By the way…. the good ones never are.

But, by offering truly unique products or services…and by offering them in a truly unique and differentiated way, smaller companies can not only survive against the category giants – they can thrive. But the thinking must shift from a lower cost mentality to an innovation mentality. Even regional success will be short lived as global information transfer and global logistics continue to improve. These concepts were true a few years back….and, probably even more true today.

So, congratulations to the teams at both TriMark USA and Adams-Burch on what will surely be a great combination.We wish you well.

Here’s a link to our editorial of September 2014:

https://www.linkedin.com/pulse/20140923012755-113439041-as-the-big-get-bigger-there-s-room-for-smaller-companies-that-truly-differentiate-themselves