By Kristen Wright, Managing Editor
PEI Executive Vice President Robert “Bob” Renkes on Feb. 9 delivered during the PEI Young Executives Winter Conference in St. Augustine his final presentation before his May retirement.
Renkes summarized the state of the industry, his career climb and his best advice to the industry’s next leaders.
Back in My Day
Renkes described himself as a “campus radical” who ran for student body president in college and won on his promise to secure refrigeration in dorm rooms. He said he went to law school and wrote a paper that one of his professors later included in a book. A few years afterward when Renkes interviewed for a job with then-PEI Executive Vice President Howard Upton, Upton pulled the book from his shelf and asked Renkes if that was him.
Renkes first had credited the book and his being the cheapest candidate for his hiring at PEI. But later, Renkes said, he discovered Upton had sent some notes Renkes had scrawled during their interview to a forensic handwriting analyst for delving into his psyche. The handwriting analyst was the grandmother of PEI Young Executive member Loren Semler. During the PEI Young Executives Winter Conference, Renkes presented Semler with his grandmother’s analysis.
The Industry
“I think the economy is good,” Renkes said.
He said wide opportunities exist in South America, the Far East and Europe, and PEI members are increasing sales by marketing internationally. Twenty percent of PEI membership is outside the U.S.
Renkes mentioned gasoline prices, postponing the EMV deadline and the Department of Energy’s Co-Optima initiative that simultaneously will boost the efficiency of combustion engines and their fuels.
“Alternative fuels will be big for PEI guys,” Renkes said.
He predicted electric vehicle penetration might reach 3 percent by 2030.
“I don’t know how PEI guys would participate in electric,” Renkes said. “I haven’t figured that out yet. Down the road, I think the industry can take 3 percent and you guys won’t be that affected.”
He also mentioned that PEI loses about 120 member companies a year, most of which are related to mergers and acquisitions or failures.
The big guys don’t want to buy the really little guys because they cost the same in due diligence as buying the bigger guys, he said.
“What we are seeing is the middle guys combining,” he said.
Renkes said he thinks that will continue.
“Small distributors are light on their feet,” he said.
He doesn’t see them disappearing.
“Everyone’s happy with their service,” Renkes said. “They are making money.”
That’s great for PEI because most PEI members are small, Renkes said. Two-thirds of PEI members do under $3 million in annual revenue.
“Who are we losing?” Renkes said. “The little distributors because they are making these eight mistakes.”
- Didn’t know costs.
- Cared more about the top line than the bottom line.
- Employees checked out.
- Owner burnout.
- Too many relatives on payroll.
- Inadequate cash reserves/access to capital.
- Over-reliance on one customer.
- Illness/incapacity/death of owner.
PEI Young Executives thanked Renkes for his support over the years by presenting him with a signed baseball bat.
His reviews at the conference were excellent.