Foodservice distributor

A foodservice distributor is a company that provides food and non-food products to restaurants, cafeterias, industrial caterers, hospitals and nursing homes.

A foodservice distributor functions as an intermediary between food manufacturers and the food service operator (usually a chef, food service director, food and beverage manager, and independent food preparation businesses operator owners.) The distributor purchases, stores, sells, and delivers those products, providing foodservice operators with access to items from a wide variety of manufacturers. Foodservice distributors procure pallets and bulk inventory quantities that are broken down to case and sometimes unit quantities for the foodservice operator. Most foodservice operators purchase from a range of local, speciality, and broadline foodservice distributors on a daily or weekly basis.

Often a food manufacturer may hire a food brokerage company to represent the manufacturer in a local market. The broker helps the food manufacturer market its products through the foodservice distribution system, which ranges from getting items stocked at the distributor to working with operators to purchase items from the distributor. At the same time, distributor sales teams work to market products directly to operator customers.

A broadline distributor services a wide variety of accounts with a wide variety of products, while a system distributor stocks a narrow array of products for specific customers, such as restaurant chains. A broadline distributor may carry up to 15,000 different items for purchase and operate sophisticated warehouse and transportation operations.[1]

A small food service distributor is often referred to as a "wagon-jobber". These wagon-jobbers will purchase food in bulk and deliver small quantities to independent retail stores keeping their shelves stocked. Independent distributors and jobbers service the independent convenience store market, bodegas and niche grocery stores where the larger distributors can't service. While these distributors are unorganized, networks of independent distributors and wagon jobbers have emerged to give these jobbers the ability to identify trends in the market.

To understand the scale of the foodservice business, it is estimated by food industry research firm Technomics that approximately 225 million meals are eaten away from home each day in the U.S. This includes both restaurant and non-commercial eating places. The International Foodservice Distributors Association estimates that foodservice distributors in the U.S., as a daily average, deliver approximately 25 million cases of food and other products.[2]

Food service distribution companies can range in size from a one-truck operation to larger corporations. There are many independent broadline foodservice distribution companies that service chain and multi-unit restaurants based on master distribution agreements with national food service groups. These groups provide distributor members procurement capabilities rival the purchasing power of largest distributors. These distributor groups also provide distributor members group private label brands as well as marketing and quality assurance services.

In the US, the industry is highly fragmented, with Sysco capturing 17% of the market, US Foods with about 9%, PFG with 5%, and Gold Star Foods playing a large part as well. The rest are spread across a host of smaller, regional players.[3]

Redistribution

In the food redistribution model, a redistributor will purchase in truckload quantities from many food manufacturers and warehouse the products. Individual distributors (typically of smaller size) can then purchase multiple manufacturers' products from the redistributor and fill-up an entire truck to save on shipping costs. The largest, established food redistributor in the U.S. is Dot Foods, followed by several other companies that have come along through the years.

Dot Foods monikers itself as the "nation's first and largest food redistributor,"[4] having entered into foodservice redistribution as of year 1978.[5] Dot Foods' nine distribution centers serve all 50 states; whereas, the company has remained family-owned and operated for more than 50 years. As of year 2008, Dot announced that it achieved $3 billion of annual sales. [6]

From this redistribution model, smaller distributors are given an option to purchase in less than truckload (LTL) quantities, giving them a more significant logistical advantage against other larger distributors.

Today, a few examples of other redistribution companies include Houston's, Inc., [7] Lagasse, Inc. (aka, LagasseSweet) [8] and several others. Such redistribution companies can either have national sales outreach (e.g., Dot Foods) or regional. Redistributors can also be multi-category or broadline service (e.g. Dot Foods), if not specialized (e.g., Lagasse specializes in janitorial, paper and other limited foodservice wares).

References

  1. ↑ http://www.ifdaonline.org/News/Ben-E-Keith-Foods-Dot-Foods-Talk-about-Technologie
  2. ↑ http://www.ifdaonline.org/About-IFDA/Foodservice-Distributors-Help-Make-Eating-Out-Poss
  3. ↑ Sysco Investor Day presentation, December 2010 http://files.shareholder.com/downloads/SYY/1124004662x0x425013/e7a21c77-2b2e-4cf6-b6c0-9b059aa02865/Investor_Day_2010_FInal_8-K.pdf
  4. ↑ http://www.dotfoods.com
  5. ↑ http://www.dotfoods.com/about-dot/
  6. ↑ http://www.dotfoods.com/about-dot/
  7. ↑ https://houstons-inc.com
  8. ↑ http://www.lagassesweet.com/static/LS/LS/about-us/Overview.html

External links


This article is issued from Wikipedia - version of the Wednesday, December 16, 2015. The text is available under the Creative Commons Attribution/Share Alike but additional terms may apply for the media files.