Acosta Sales and Marketing

Acosta Sales & Marketing

Type	Private
Industry	Marketing
Founded	1927
Headquarters	Jacksonville, Florida, USA
Number of locations	65
Key people	Robert Hill, President & CEO Greg Delaney, CFO
Products	Outsourced headquarter sales, retail services, marketing services, and customer service solutions for consumer products goods companies
Revenue	$1 billion (2010)
Owner(s)	Thomas H. Lee Partners
Employees	17,000 (2010)
Website	www.acosta.com

Acosta Sales & Marketing is the largest sales, marketing and service company in North America. The company employs 400 associates at its corporate headquarters in Jacksonville, Florida and 17,000 at 65 locations in Canada and the United States.

History

L.T. Acosta Company, Inc. was established in 1927 by Louis T. (Lou) Acosta as a sales and marketing agency in Jacksonville, Florida. In 1956, Common & Company Food Brokers merged with Acosta. Robert (Hy) Albritton, who owned Common, became president and CEO of Acosta when Lou Acosta retired in 1959. For the first 40 years, the company expanded in northeast Florida but remained small and profitable; in the early 1970s there were around 12 employees servicing a single market.

Delmer Dallas

Delmer Dallas joined Acosta in 1966 after stints with Procter & Gamble and Clorox. In 1974 Hy Albritton retired and Dallas became company president; expansion was at the top of his agenda. An office in Tampa was opened and the service area expanded to central Florida. A branch in Birmingham, Alabama, was started in 1977. In 1981, the Miami office was opened, and Acosta began serving the whole state of Florida. Dallas recognized that the company could grow faster through acquisitions so Raley Brothers was purchased in 1983, providing an immediate presence in Georgia. Acosta began doing business in the Carolinas in 1989, effectively covering the southeast U.S. Thereafter, the company expanded westward into Louisiana and began operations in Tennessee and Virginia. By the mid 1990s, the company was servicing 27 markets and employed over 2,000.

Market consolidation

The 1990s brought mass consolidation of food retailers and manufacturers and centralization of procurement centers. In 1992 the top five chains accounted for less than 20% of all grocery sales, but as mass retailers like Walmart began to sell groceries, the dynamics in the industry changed. In order to compete, supermarket chains had to become larger as well, and a wave of major mergers took place. By the end of the 1990s, the top five grocery chains controlled 40% of all sales, and the consolidation trend continued. Faced with a handful of supermarket chains to sell to, manufacturers began to consolidate as well. As a result, both manufacturers and nationwide chains wanted to deal with national sales and marketing agents rather than contend with regional firms.

Gary Chartrand

Dallas recruited Gary Chartrand from the Carnation Company in 1983 and mentored him as a successor. Chartrand was named President in 1993 and CEO when Dallas retired in 1996. Two years later Chartrand was elected Chairman of the Board, and company acquisitions accelerated across the US and Canada.

Chartrand believed the best way to protect Acosta was to expand coast-to-coast. As the company expanded, it made strategic acquisitions and mergers which created immediate penetration into new markets and significantly increased the company’s client base. In a little over 20 years, Acosta merged and acquired approximately 45 companies. From July 1998 through August 1999, Acosta tripled in size. The three major companies that joined Acosta during this time were PMI-Eisenhart, Kelley-Clarke and The MAI Companies.

Competitor bankruptcy

Marketing Specialists Corporation (MSC) was one of Acosta's top competitors. In the late 1990s, the Dallas, Texas, company borrowed money to pay for expansion via acquisition. The company had revenue of $381 million in 2000, but lost $365 million. In the spring of 2001, they filed for bankruptcy. Acosta sought to assume MSC's business and hired over 1,700 former MSC employees (30% of their workforce) and assisted in their receivable collections. Acosta also picked up some of MSC's clients.

In June 2002 Acosta extended its reach into Canada and continued to expand its domestic business, especially in building its presence in the perimeter areas of the supermarket. Fresh foods, which account for one-third of all supermarket sales, was also the fastest growing area of the store. Acosta also strengthened its position in natural foods and specialty products.

Outside advice and equity partner

In 2003, shortly after the private equity firm Berkshire Partners invested in Acosta, Berkshire recommended that Acosta engage with Bain Consulting to take a deep look at how Acosta did business. Bain brought in a team of highly qualified, experienced individuals and dug through a mountain of records on Acosta's business practices to find a better, faster and more efficient way of operating Acosta's sales and marketing business. The Bain team put in place new technologies and practices to increase the bottom line. Within three years, sales and profits skyrocketed.

The company contracted with Goldman Sachs in 2006 to identify methods to secure a new equity partner to provide capital for future growth. AEA Investors signed an agreement to make an equity investment that allowed the 200+ active employees who were shareholders to retain a significant equity investment in the company. AEA funds repaid the 2003 investment made by Berkshire Partners.

Acquisitions during 2008 included Hynes, Inc. in Charlotte, North Carolina; C. Lloyd Johnson, a leading military service sales and marketing agency; and Promo Depot, a marketing and promotional products company.

Robert Hill

After celebrating 25 years with Acosta, Gary Chartrand named Robert E. Hill Jr. as its President and CEO, effective January 1, 2009. Hill, who has served Acosta in a variety of key capacities, continues to expand the company using his industry knowledge, sales experience and strong client relationships. Chartrand remained with the company as executive chairman of the board of directors.

On June 8, 2010, Acosta purchased FrontLine, the in-store marketing division of Alloy, Inc., for $36 million. FrontLine is a national network of 9,000 grocery stores (including Safeway, Kroger, and Albertsons) utilizing in-store advertising and displays.

New equity partner

On January 5, 2011 Acosta revealed that Thomas H. Lee Partners would acquire the controlling interest in Acosta from AEA Investors, but operations and senior management will not change. The deal is worth in excess of $2 billion, according to Bloomberg News.

See also

• List of Marketing Topics

External links

• Acosta official website