Neil Cooper explains how this logistics provider is diversifying its product offerings to stay on top of the industry.

Whether you’re seeing Meg Ryan and Tom Hanks fall in love again or the next Marvel-based action flick, the thrill of going to the movie theater isn’t just about Hollywood. It is often an opportunity to indulge in some butter-drenched popcorn, Snowcaps, or Twizzlers (or all three). That is where Marjack, a distributor of candy and snacks to the entertainment industry, found its niche over 50 years ago.

Today, the Landover, Md.-based company delivers candy and snacks, health and beauty products, concessions, batteries, and seasonal products to the movie theater industry, video-rental chains, and specialty retailers such as Bed Bath & Beyond, Office Max, and Home Depot.

According to Neil Cooper, vice president, the company ventured into the video rental and specialty retail industries about seven years ago, when the movie theater industry was beginning to struggle. “We found too much risk in servicing one class of trade and realized our services could easily translate to other areas.”

Movie theaters now constitute 35% of Marjack’s business, as opposed to 80%-plus in 1998. The remainder is made up of video chains and specialty retail, with specialty retail representing double-digit growth for five years running.

Neil Cooper, Vice President

Marjack now has distribution facilities in Huntsville, Ala.; Corona, Calif.; Denver, Colo.; Orlando, Fla.; Glendale Heights, Ill.; Landover, Md.; Freehold, NJ; Oklahoma City, Okla.; Portland, Ore.; and Memphis, Tenn. It also has locations in Alaska and Hawaii.

According to Cooper, the company built its distribution network with the intention of serving its movie theater customers, whose orders average $3,000, using its own fleet of tractor trailers and serving specialty retail and video chains, whose orders average $250, using FedEx Ground, UPS, or other LTL (less than truckload) carriers. The strategic placement of its distribution centers allow the company to guarantee 98% of its shipments will arrive within two days (without paying two-day rates).

Eliminating error
One of Marjack’s biggest challenges is meeting its customers’ varying needs. The process starts with account managers who work with customers to understand their unique businesses. For customers who wish to outsource the purchasing function, Marjack provides category management services.

Information is relayed to corporate where a team made up of individuals from sales, customer service, operations, IT, finance, and purchasing work together to create a reliable supply chain for each customer. Once the supply chain is established, orders start pouring in. Cooper explained that only a few years ago, about 50% of orders came via standard mail, fax, or phone, but today 98% of orders are delivered electronically.

The company uses scanner technology to ensure orders are picked correctly. “You can imagine the potential for quality issues when employees are matching numbers on a sheet of paper to numbers on the racking system or the product itself. That is what we used to do,” said Cooper. “Now, if an employee picks an item not on the order sheet, the scanning system will not allow him or her to continue without fixing the mistake.” Scanning technology also enables the company to easily rotate goods to ensure freshness.

Marjack has made the delivery process easy for customers, who either receive an advanced shipping notice or UCC 128 label, which indicates the contents of each box. “Because our IT team has created a system that makes quality errors nearly impossible, retailers don’t have to scan the product in. They can just scan the label on the box,” Cooper explained.

Necessary service
Another challenge Marjack and other distributors face is manufacturers’ desire to eliminate the middleman. “They consider distributors a necessary evil, but the key word is necessary,” said Cooper, adding that most manufacturers do not own food-grade warehouses, and since most order sizes are small and most customers have hundreds or even thousands of locations, they simply do not have the means to distribute products themselves.

That is why Marjack has made its processes manufacturer-friendly. For starters, the company does not influence retailers’ purchasing decisions. “We don’t get paid a bonus when retailers order certain items, but at the end of the day, we encourage them to choose the best products, especially at the point of sale where shelf space is limited.”

In addition, the company stocks nearly 4,000 SKUs, so manufacturers can rest assured Marjack has their products available when retailers request them. As a result, Marjack has strong, loyal relationships with dozens of manufacturers. “Manufactuers become dissatisfied when the distributor can’t deliver on time and gets in the way of bringing new items to the retailer,” Cooper explained.

Branching out
Although the company has added 1,000 FedEx Kinkos copy centers and nearly 2,000 Barnes & Noble and Follett college bookstores to its portfolio in the last 18 months, Cooper expects the majority of Marjack’s growth to come from existing customers through diversification of services.

Marjack recently began distributing health/beauty and seasonal products, as well as clip-strip items. In addition, Marjack is supporting office supply customers that are starting to offer breakroom supplies such as coffee, sugar, and paper goods. Cooper estimates that customers like Office Depot and Office Max now carry 30 to 50 SKUs in addition to the snacks and candy at the front counters. And, since most office supply chains do nearly two-thirds of their business through catalog orders, Marjack has also become part of such customers’ catalog supply chains.

No matter how the company grows, one thing will not change: culture. Cooper admits his secret weapon is having employees who are healthy and energetic, are committed to lifelong learning, value their customers’ and coworkers’ opinions, and exhibit honesty and patience. “That combination makes this a fun, upbeat place to work,” he concluded.