Phillips Makes Splash With Royal Deal

In the latest move toward pet industry distributor consolidation, Phillips Pet Food and Supplies acquired Royal Pet Supplies, with distribution centers in Brentwood, N.Y., and Pompano Beach, Fla. The move allows Phillips to explore relatively uncharted territories: specifically, the underwater world of aquatics.

“The primary objective of this new venture is to continue to build a best-in-class distribution network that will give our customer’s unprecedented service,” Blaine Phillips wrote in a letter today to Royal’s customers. “Combined, we will offer our customers a full portfolio including full-line aquatics which allows us to address our retailers complete supply needs.”

The move more fully into aquatics comes at a time when the aquatics sector has rebounded: the latest APPA pet population figures estimated 11.7 percent of U.S. households kept freshwater fish and 1.5 percent kept marine fish. The sector had dipped in 2010, but has otherwise hovered about 12 percent since 2000.

 The deal may also give Phillips added heft in advance of a march west toward a national footprint, much as Animal Supply Co.’s acquisition path has led it down the Pacific Coast and across the southern portion of the country to the East Coast. Neither Royal nor Phillips seemed to fit Animal Supply’s needs due to overall size and territorial overlap.

“Both organizations are operating in the same manner as they have,” Phillips wrote. “Gary Nocera, the Royal sales team and drivers will continue to support you. As we work to integrate and consolidate our organizations, we will keep you advised of pending changes. Phillips will be able to offer increased sales support, inventory management, and a variety of other services.”

Phillips did not say whether the company will ultimately consolidate any distribution centers, but the Royal facilities are relatively distant from the Phillips facilities. Phillips operates distribution centers in Pennsylvania, Massachusetts (acquired in its 2010 acquisition of Super-Dog Pet Food), South Carolina, Florida, Ohio and Indianapolis.

The deal will see Phillips add Royal distribution centers in Brentwood, N.Y., (near New York City, about midway between Easton, Pa., and Taunton, Mass.) and Pompano Beach, Fla. (on the Atlantic Coast, 200 miles south of Plant City). 

“The integration of the companies will allow us to learn from each other, focus on the strengths of each and combine the best practices of both organizations to form strategic alliances with the vendor, ourselves, you and your customers,” he wrote.