Two major brokerage deals were made during the past month and both have potential national impact.
Just before presstime, large national food broker Acosta signed a definitive agreement to acquire Impact Group, the Boise, ID-based broker that has about 20 offices across the country and focuses on the natural, specialty, ethnic and emerging brands business. It also has a significant c-store presence.
Both companies believe that this deal will provide highly complementary services, and this strategic move will expand service offerings and open new channel opportunities for clients of each organization. Acosta will provide local market proficiency and a distribution solution that gives emerging brands access to the shelves of major retail chains and enables smaller brands to thrive.
“We are excited to join forces with Impact Group, as their expertise adds dimension to Acosta’s long history of growing brands and will create significant benefit for our clients,” said Brian Wynne, CEO of the Jacksonville, FL-based broker. “Over the past few months, we have identified numerous parallels between our organizations in terms of the channels we support and how we work with clients, and our services complement each other well. We look forward to sharing our expertise and working together to strengthen our offerings and provide even greater value to clients. We look forward to this new chapter ahead.”
“We are looking forward to joining Acosta and bringing our complementary expertise in the natural, specialty, ethnic and emerging brands categories,” said Matt Buskirk, president of Impact Group, who spent 26 years with Kroger before switching to the sales side of the desk eight years ago. He joined Impact in 2017. “The small and mid-size companies that dominate this space have seen explosive growth recently and we are pleased that we will be able to bring an even greater value to these clients utilizing Acosta’s broad range of expanded capabilities.”
The acquisition is a forward-thinking business decision for both companies, allowing them to leverage their shared commitments to strengthening and modernizing services and capabilities to help clients compete in the modern marketplace.”
Impact Group, which began in 1994, has found success in providing omnichannel solutions to manufacturers. As part of the acquisition, Acosta will be integrating three of Impact Group’s business units to strengthen its offerings. These units include: the sales and marketing agency that provides sales, marketing, analytics, and retail support for CPG manufacturers; the unique and specialized sales business operating at metropolitan retailers in key urban cities; and the dedicated distribution capability to help emerging brands get to market. In 2016, New York private equity firm CI Capital Partners acquired a controlling stake in Impact, whose growth has come primarily through acquiring other regional brokerages. One of those deals was in 2018, when Paramus, NJ-based food broker E.A. Berg joined forces with Impact. Today, David Berg and Michael Berg serve in key executive roles with Impact.
Acosta has also been seeking to grow since it exited Chapter 11 bankruptcy and the company was reorganized in early 2020. In early June, the big national broker acquired the CORE Group, a large foodservice broker headquartered in Chino, CA with 54 offices nationwide.
According to Acosta, the Impact deal is expected to close in July 2021, pending all necessary approvals and closing conditions.
And earlier this month, the C.A. Fortune ownership group, comprised of its managing partners, ESM Ferolie and the Carlin Group, announced that the three organizations will now work together under one banner allowing each agency to offer clients access to their collective resources across the nation.
Headquartered in Chicago, IL, C.A. Fortune was originally founded in 1983 (Carlin acquired the company in 2013 and Ferolie became an equity partner 2015) and has grown into a full-service, privately-held consumer brands agency with a national scope that works in natural, conventional, and online channels.
Its continuum of vertically-integrated services, which include sales management, a sales accelerator, marketing and branding, insights, retail activation, and digital and e-commerce services, will also be available to clients of C.A. Ferolie and C.A. Carlin.
“This is a major win for our collective agencies. Working together across our sales agency vertical tremendously deepens our regional strength in the central and eastern territories of the U.S. and complements our current industry-leading west offering,” said Tyler Lowell, CEO and managing partner of C.A. Fortune. “We’re very excited to move forward together as a national consumer brands powerhouse offering an unparalleled range of integrated services.”
C.A. Ferolie, previously known as ESM Ferolie, which was established in 1947 and is headquartered in Montvale, NJ, offers omnichannel coverage with decades of experience in all categories, both within the food and beverage space as well as other CPG categories and uses innovative technologies and resources in what the company believes will allow it to deliver industry-leading results with a super-regional focus across the east.
“The sales channels continue to transform as conventional and natural channels are blending, in addition to the landscape becoming more distribution-agnostic, making it crucial for agencies to be nimble,” said Tony Ferolie, CEO of C.A. Ferolie. “This working relationship allows our teams the opportunity to capitalize on one another’s strengths and services, giving each of us access to more vertically-integrated services such as branding and e-commerce as well as seamless national coverage.”
C.A. Carlin, formerly known as Carlin Group, which was started in 1962 and is based in Schaumburg, IL, is a large regional sales and marketing solutions company with a foothold in the central part of the U.S. with total trade coverage focused on grocery, drug, mass, alternative, convenience, and limited assortment.
“We’re thrilled to integrate this group of top sales and marketing agencies, bolstering overall reach and capabilities for our clients,” said Brad Carlin, CEO of C.A. Carlin. “By creating this privately-held master brand, we can harness the regional strength of C.A. Carlin and C.A. Ferolie to further support C.A. Fortune’s stable of national clients.”
Carlin acquired 100 percent of C.A. Fortune eight years ago from the husband-and-wife team of Ken and Dottie Rzeszutko who acquired the company in 1983. In 2014, Ferolie merged their natural and specialty biz business into Fortune and gained co-ownership of Fortune.
The three organizations will each continue to operate under its current ownership and management structure.
However, there are broader ramifications to this deal. Both Ferolie and Carlin were original members of Beacon United, an alliance of nine regional brokerage organizations that was created in 2011 to further develop brands for manufacturers and enhance customer relationships. Additionally, the size and scale of Beacon United would have allowed the group to more efficiently obtain national syndicated data.
A lot has happened over the past decade, with only five members remaining before the C.A. Fortune deal was announced. And since the remaining members are contractually obligated by syndicator Nielsen to remain together until June 2022, Beacon United is essentially a shell company today that is likely be dissolved in a year.
The C.A. rollup/re-branding is an interesting one. Ferolie and Carlin are clearly looking ahead, anticipating further changes in the national broker grid (did I hear that Crossmark might be in play?). By putting their eggs into the C.A. Fortune basket, both Ferolie and Carlin are sending a message that they’re prepared for future changes in the brokerage business by leveraging a company they already control.
And while C.A. Fortune was a national company already (albeit primarily in the specialty food arena), harnessing the firepower of two full-service brokers who operate in some of the nation’s largest markets will likely create some uneasiness with the brokers who are still part of the group or recently left the Beacon United roster.
Both the Acosta and C.A. stories have future ramifications – we’ll be following closely.