Buffen fills niche in underserved health, beauty markets - Distributer of supplies to drug, grocery stores on way to $21 million

By Ron Janecke

Business activity: While local competitors focused on a narrow market, often dominated by one customer, N.A. Buffen assembled a variety of customers by going into areas shunned by others.

The result: N.A., Buffen is in its 49th year as a distributor of supplies to drug and grocery stores -- and its two main local
competitors are out of business.

Buffen, founded in 1951 by Nathan Arthur (the N.A. in the company name) Buffen, has evolved from a filler of display racks to a supplier of several product lines, primarily to independent stores. More than 80 percent of its sales are in the St. Louis metropolitan area.

Today, Buffen's business is made up of three basic elements: health and beauty aid general merchandising distribution, ethnic hair care and promotional business.

The company sells about 8,000 different products, ranging from health and beauty aids to grocery items and kitchen gadgets.

A rapidly growing line is ethnic beauty products with more than 1,200 items available. Buffen sells to beauty and barber shops as well as retail outlets. The ethnic product line has grown to 30 percent of the
distributor's business.

Becoming a big supplier of ethnic products has come about partially because Buffen years ago went into markets ignored by others -- primarily the inner city.

Although Buffen supplies some items to major supermarket chains, most customers are small, independent drug, grocery and convenience stores as well as hospital gift shops. Buffen sells to about 1,200 stores. To handle the wide range of products and customers, the company carries nearly $2 million in inventory in its 36,000-square-foot warehouse in Maryland Heights.

Buffen bills itself as a one-stop supplier, where a small retailer can buy standard drug store items, such as aspirin, atteries, film and motor oil.

Executives: Larry Buffen, 53, is president and owner of N.A. Buffen. A native of St. Louis, he began working summers in his father's firm while attending school. He joined the company after attending Saint Louis University and doing a stint in the U.S. Coast Guard. He started as a salesman in 1968 and later was a buyer before taking over as president from his father.

Andy Buffen, 30, is vice president of purchasing and the third generation to enter the family business. He earned a degree in business and family economics from the University of Missouri-Columbia's School of Business. He also attended the University of Wisconsin. He joined the company in August 1993.

Judy Kinder is general manager, Ron Catalano and Larry Garrison work with Andy Buffen in the promotional area, Ronald McGee is head of the ethic products division, Ron Hunt is warehouse manager, Kathy Priester is assistant warehouse manager and Tom Deptula is dock manager.

Company history: Nathan Buffen started the business in his home as a one-man operation on Easton Avenue in St. Louis.

The company stayed there until 1968, when it moved to Rock Hill Industrial Court. It moved to its present location in Maryland Heights in 1995.

Nathan Buffen semi-retired in 1974, took full retirement in the early '80s and died in 1995.

Through the 1970s, the company handled general merchandise, but in the '80s, it moved into the promotional area, looking for good buys that manufacturers were offering. The products are often ones a company is trying to promote, ones that are being discontinued or ones that Buffen can get a better price on and can offer outlets a lower price than the competition.

Manufacturers often have promotional money set aside to increase sales. This activity often picks up near the end of a company's quarter, when it needs to show bigger numbers.

Andy Buffen is in charge of promotions and spends much of his day on the phone looking for bargains and negotiating deals.

In addition to sales to retailers, Buffen will sell products to another distributor, a practice Larry Buffen says is not unusual in the trade.

Although most sales are relatively small, orders from large manufacturers can range up to $500,000.

Buffen buys from all major manufacturers of health and beauty aids and is constantly looking at survey data that show what the best movers are in each product category. The company works with manufacturers, testing new products for 60 days, and working out deals ahead of time where it will pay only for what is sold if the item does not get a good market response.

Revenue: Based on figures from the first five months of the year, N.A. Buffen's revenue is on a path to soar past the $21 million mark in 2000, up from $18.2 million in 1999.

Professional services: United Missouri Bank is the firm's banker; Arnold Marcus of Fiehler & Marcus is the accountant. Legal work is done by Speros Boudoures at Lewis Rice & Fingersh and by Michael Gordon. Public relations and advertising are done in-house.

The future: "We see growth all over," Larry Buffen said. "There are fewer people like us around." Two areas that will continue to prosper, Buffen believes, are the ethnic hair-care lines and the promotional business. The company recently took the ethnic hair care product lines nationally.

Reprinted from the St. Louis Business Journal

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