Carl Pennington explains how this food brokerage firm creates value for its clients by offering a one-stop shop for all of their sales and marketing needs.

In 1994, Carl Pennington was running the grocery division of a food brokerage firm based in Northern California. Eager to go into business for himself, he and a colleague sold their stock in the firm and purchased Impact Sales, a small company in the Pacific Northwest with nine employees. “We took the company over with a desire to grow.”

And grow it did. With 190 employees in 10 offices from coast to coast, Impact sales is one of the largest food brokerage firms in the country. But according to Pennington, the company does more than channel merchandise. It combines proprietary technology with skilled employees to provide a full array of services to clients, typically packaged goods manufacturers seeking to increase sales at the retail level.

“We do everything from planning their promotional strategies to placing products on the store shelves, and we deal with our clients at the corporate level all the way down to store level. We are basically a one-stop solution,” Pennington said.

“We are a much more economical solution for manufacturers as opposed to them trying to do it on their own. We represent a number of companies and can leverage that critical mass to reduce margins and create efficiencies.”

Carl Pennington

“We publish information that allows our clients to understand what’s happening in their business and make decisions that are best suited for them strategically and financially,” said Pennington, adding that PinnPointe also provides technology consulting services to local non-grocery businesses. “PinnSights plays a substantial role in our ability to retain clients—it’s a point of differentiation between us and our competition.”

With the combination of skilled representatives (the company relies on referrals from clients and customers to recruit new employees) and proprietary technology, Impact Sales helped Organic Valley, a farmers co-op based in Wisconsin, become the leading organic dairy in the country over the course of 11 years. It also helped Seattle’s Best Coffee increase sales from $600,000 to $28 million and take its brand national in four years. Tully’s Coffee can tell a similar story: since contracting with Impact Sales three years ago, the Northwest regional roaster increased grocery channel sales from $300,000 to $18 million.

Maintaining margins
In 2006, Impact Sales served nearly 500 customers and pushed more than $1 billion in goods through the grocery channel. But it is always careful not to grow too fast.

Pennington recalls that the food brokerage market was in the midst of consolidating when Impact Sales came on the scene in 1995. Many regional firms were rolling up and becoming national firms, but many lost key associates due to culture clashes. “Integrating several cultures into one organization is a behemoth task, let alone eliminating redundancies.”

He added that when the regional firms consolidated, they leveraged their size to drop prices and gain support from manufactures, ultimately squeezing the industry’s margins.

Impact Sales is maintaining margins, not by slashing prices, but by adding value into the sales equation. “We are selective with our partnerships. If we have a situation where one of our clients is struggling, we may negotiate lower prices, but for the most part, we stand firm with our fees.”

Impact Sales has acquired two companies so far and has its sights on acquiring several more, but it is scrupulous in choosing companies that are a good match culturally and strategically and have technology that can be easily absorbed.

Family first
Growing too fast would also jeopardize Impact Sales’ family culture. The company encourages employees to create balance between work and family. Whether employees need an hour or two off to attend a child’s sporting event or for a charitable community activity, they have management’s blessing. “Everyone pulls together to fulfill that person’s responsibilities,” said Pennington. “We are proud of our culture. In today’s world with companies consolidating and becoming much larger, they don’t often foster a healthy culture.” Pennington added that Impact Sales is also at the top of the industry in terms of salary and benefits.

Impact Sales also provides training opportunities for employees, most recently in fact-based selling. Historically, Pennington explained, food brokers relied on relationship-based sales and marketing, and although relationships still carry a lot of weight, fact-based selling has become the predominant method of adding value to the sales process. The training program is disseminated via Web-x teleconferencing. In addition, key managers gather every quarter for a three-day meeting to share ideas and discuss the role of fact-based selling in the company’s future.

But relationships will always remain an anchor for Impact Sales. “We have got a lot of seasoned professionals who tend to get close to our clients and go above and beyond the call of duty to get results. Its not just a job—it’s something they feel vested in, and that is a big differentiator for us. Feedback from clients tells us they are encouraged by the fact that we have a lot of enthusiastic entrepreneurs.”