Anchin, Block & Anchin knows a thing or two about good eats. The New York-based Top 100 Firm always had a hand in the food and beverage industry, but it really started to stir things up when it decided to cater to the niche sector.
"Approximately 10 years ago, we were re-organizing our marketing and client service structures around industry niches and chose food and beverage, which was a significant piece of our business," said Anchin's Food & Beverage Industry Group practice leader, Greg Wank. "We decided to organize our efforts in this area to focus our experts in the industry and to grow the practice. With that in mind, we organized the Food & Beverage Industry Group with dedicated people who try to mainly focus on clients in that industry." Today, there are about 40 staff members dedicated to the practice, including 10 partners.
The firm had it in mind to serve the industry, share ideas and learn how to grow the food and beverage practice. Over time, Wank realized that the Big Apple was the sweet spot for success - and once the firm started to focus on the industry, its clients wanted to know how their businesses were doing relative to their peers. "In late 2006, we decided to launch a food industry survey of the New York metropolitan area," he explained.
Before that, all clients had to go off of was the information of publicly traded companies, and Wank said that clients didn't expect to do what giants like Pepsi and Kraft were doing - they wanted to know what privately held companies were doing. "As we started to tally the results, we realized we had a lot of great information that we never really had before," he said. "Not only of how companies were doing financially, but what their issues were on a day-to-day basis and what kept them up at night as business owners."
There's a great deal of work that goes into gathering information for the survey, which is now an annual undertaking. "It's very labor-intensive just to get the survey done, and then we also have an annual executive summit to share the results," said Anchin partner Michael Cirenza, adding that it takes hundreds of hours just to prepare for the project.
A few years ago, the survey revealed that food and beverage business owners were troubled by commodity and energy pricing. "There was a big concern from clients who asked, 'How am I going to deal with these uncertainties and still grow my business?' With the stabilization of commodity prices, respondents were able to focus on investing in the growth of their business. The survey also showed that the current state of the food and beverage industry is resilient. Companies told us that they were very optimistic about 2013 being a strong year," said Wank.
Anchin's food and beverage practice wanted to take the survey results one step further. In the spring of 2007, the firm organized its first State of the Food & Beverage Industry event, where the firm invited its food and beverage clients to gather in a mini-tradeshow setting. Since then, every May the firm presents the results of the survey to the tradeshow participants and addresses findings through panel discussions where industry experts speak on various topics.
The tradeshow drew in close to 60 attendees in its first year, and has since evolved to more than 150 participants. For the last five years, the tradeshow has been held at the restaurant and catering space at Club 101 on Park Avenue in New York City. The firm is exploring a new venue for 2014 because the event is starting to reach its capacity in its current location.
MATCHMAKER
Just like any business gathering, the mini-tradeshow also serves as a schmoozing affair: "It's a networking event and deal-making event," said Cirenza, who knows how to spot an M&A deal in the food and beverage space, given his prior experience as a chief financial and chief operating office at a large nutritional supplements company.
According to Anchin spokesman Lee Peretz, there are a number of private companies that have reputable brands with great concepts that are ultimately trying to reach some larger companies so that they can eventually be acquired.
At least 90 to 95 percent of the attendees are executives of privately held companies, with only a small group from publically traded companies. "It's a C-level event, which includes CEOs, CFOs and COOs of the food and beverage industry," said Wank.
The firm managed to get the chairman of NASDAQ-listed natural and organic food company The Hain Celestial Group Inc. to take part in one of its panel discussions. The Lake Success, N.Y.-based company is known as a serial acquirer in the food and beverage industry, and may well have found a couple of potential targets during Anchin's mini-tradeshow. "Sometimes we have those companies continue to come" even after they have been acquired by large companies, Peretz shared.
"We work well with our clients to help structure a proper deal," said Cirenza. "Since we are very knowledgeable about the tax aspect of the transaction, we can structure it to optimize the tax treatment. We become their chief advisor because we are trusted and we have a strong relationship that has been built over time."
CLIENTS & SERVICES
Anchin's food and beverage clients run across a number of subsectors within the middle market. The industry is comprised of manufacturers, processors, importers, distributors, retailers, wholesalers, restaurants and hospitality. "Each one of those in itself can be a different industry segment," Wank noted. "They have very unique characteristics and needs."
Cirenza spends time with the more mature companies that have been around a long time and are generating at least $100 million in sales, while Wank focuses on the younger companies that have a brand that they are trying to grow or raise capital to develop. "They want advice on how to do it right the first time so they don't make mistakes," he said.
The food and beverage practice provides a full range of accounting, financial and advisory services to its clients. "Many of our private company clients will involve us in the M&A process because this may be one of the most impactful financial decisions of their lives," said Cirenza. "Our private company client base relies on us to help them with tax, financial reporting, cash flow analysis, and profitability consulting as a means of helping them grow their business." Clients often count on Anchin's food and beverage team to consult on exit strategies or succession plans.
TREND WATCH
To keep up with the ever-changing trends in the food and beverage space, Anchin subscribes to more than a dozen industry publications. Given that there is so much to read and a lot to cover, different members of the team are responsible for reading various industry publications, including Supermarket News, Meat & Poultry and Modern Baking, to name just a few. They also stay up to date on consumer trends with the help of the market research firm NPD Group, Zagat and various bloggers.
Social media also plays a big part in the firm keeping up to date with the ins and outs of the industry. "We are very active on LinkedIn and Twitter. We share information and we also monitor and follow important trendsetters so we can stay on top of the industry," said Wank.
The food and beverage team also attends networking industry events throughout the Northeast, and from Chicago to Baltimore, to home in on trends. "We also think about expanding our practice beyond the Northeast," Wank added.
SUSTAINING GROWTH
The best perk of being in the food and beverage industry is all of the delicious samples, but there are other positive aspects of being in the industry. For instance, it's high profile, especially in New York. "Anytime you start talking about food and beverage, people's ears perk up, especially for celebrity chefs and restaurateurs, [who are] particularly interested in industry trends," Wank shared. He also noted that a benefit of being in the space is that there is a lot of data out there, and people want and consume the information. It's a "big positive for the firm" that Anchin is seen as a resource in the industry.
"It also gives us an opportunity to put different players together within the industry," said Cirenza, who has paired supermarket groups with various vendors.
The biggest challenge of providing services in the niche sector is that it is so diverse. "There's so much to know," said Wank. "There's a lot of depth to the industry, so you can't just say, 'I'm going to go out and be a food and beverage expert,' because there's such a wide net."
Maintaining the growth of a food and beverage practice takes work. Firm leaders who may want to go down the grocery aisle should first take stock of where they are with their existing client base, said Wank. They have to be willing to spend time and money, learning and exposing themselves to the multiple subsectors within the industry. "This didn't happen overnight. We have tripled the size of our practice, but it took 10 years to build it," Wank shared. "This is quite an accomplishment for us. To know we built something from scratch and people are looking forward to the [survey] results and the event every year - we are very proud of that."
AT A GLANCE
Firm: Anchin, Block & Anchin
Headquarters: New York City
Managing partner: Frank Schettino
No. of partners/staff: 56/350
Year founded: 1923 (now marking its 90th anniversary)
Services: Audit and review services; tax planning and compliance; tax credits and incentives; profitability consulting; succession planning; litigation support; forensic accounting; valuation; estate planning; mergers and acquisitions
Industry specialties: Food and beverage; fashion; architecture and engineering; construction; financial services; law firms; private clients; public relations and advertising; real estate; technology
