Food wholesaling entails the marketing process’s preparation, storage, and distribution of food products to various entities, such as restaurants, grocery stores, canteens, schools, and government agencies.
A significant portion of a wholesale food suppliers business comes from restaurants and similar businesses. They accounted for 23 percent of all grocery and associated product sales made by all food wholesalers in 2012, totaling $225 billion. Even while grocery stores and restaurants fight with one another for consumers’ food dollars, the wholesalers that supply these two different types of businesses do not directly compete with one another.
According to experts in the field, there are three distinct kinds of food service distributors:
Companies that provide broad-line food service distribution have historically acquired various food products from producers and stored them in a central warehouse. Most wholesale food suppliers provide additional services tailored to the requirements of independent eateries and smaller chains. Because they concentrate on certain areas that need extensive skill in product sourcing, handling, and servicing, companies that provide specialty food service distribution do not offer a wide variety of products because they do not stock as many of those categories. Convenience shops, hotels, and warehouse clubs are just a few of the many types of retailers that focus on serving a certain niche.
System food service distributors are businesses whose primary clients are restaurants belonging to a chain that makes all of its purchases and plans all its menu items centrally. It is possible that individual operators inside chains do not require the additional services that are provided by a broadline or specialty distributor. These services may include learning about new products or receiving assistance in the creation and preparation of new menu items.
Tasks Performed by Food Distributors
Wholesalers and distributors in the food industry act as a link between manufacturers and end users, such as supermarkets and restaurants. They reduce the massive amounts of goods manufacturers ship to manageable sizes for a business. Distributors in the food service industry stock supplies and deliver them to businesses. Hereafter, we will refer to wholesalers as distributors and food manufacturers as producers.
Different Categories of Grocery Store Distributors
A food service distribution company might be as small as a single truck or as large as a multi-national conglomerate.
Distribution Companies Fall Into 4 General Categories
1. Mass Market Distributors
Broadline distributors stand out because they provide hundreds of items that cater to various businesses. Accordingly, broad-line distributors are often sizable businesses catering to a huge customer base. The items are plentiful but more general.
2. Niche-Market Vendor
Compared to broad-line distributors, specialty distributors tend to specialize in a narrower field. A company that specializes in distributing fresh seafood, for instance, will have the resources necessary to ensure that its customers’ restaurants serve only the highest quality fish possible. They will carry items that cannot be found at a typical wholesaler.
3. As a third-party redistributor
A redistributor is a company that does not sell to restaurants but purchases bulk from manufacturers and break down the goods for more specialized distributors. Smaller distributors get their supplies from redistributors who sell them LTL, or less than truckload, volumes. This subset of wholesalers supplies locally-owned restaurants and other food service businesses that don’t have the purchasing power to conduct business with the larger national chains. Because of redistributors, this is feasible.
4. Cash and Carry
Lastly, a cash-and-carry distributor is closer to being a wholesaler than a distributor because they do not deliver their items to restaurants. Instead, business owners make their way to a cash-and-carry warehouse to make goods purchases and have them sent directly to their locations.
What can wholesale food suppliers do for you?
Food service firms and enterprises in the food and beverage sector gain a great deal from working with wholesale food suppliers, not just because they act as a link between producers and customers. Here are three reasons why you should work with a wholesaler:
- By working with a food distributor instead of a manufacturer, you might save money on rent or purchase of a large warehouse.
- Wholesale food suppliers typically work with a big group of shops and other commercial establishments. Clearing out stock quickly allows you to place orders with suppliers for more. Fresh food is guaranteed when you buy from a wholesale food distributor.
- To simplify the ordering procedure, wholesale food suppliers utilize a wholesale distribution management system.
Making the decision to partner with a wholesaler for your food product is both an exciting and difficult venture. Research your options carefully and make an informed decision by doing your study. Once you’ve settled on a wholesale food supplier, it’s important to set clear boundaries for your working relationship.