The process of food distribution is quite complex and the process benefits significantly from the involvement of a food distributor.
There are several types of food distributors and every distributor comes with its own unique benefits.
To fully understand the food service supply chain, it is very necessary to understand the role of distributors and different types of distribution companies working in the present landscape of the logistics industry.
Therefore, in this article, you are going to know more about how the process of food distribution operates and how it serves its advantages to manufacturers, food service operators, and finally the ultimate customer.
How Does A Food Distributor Operate?
The primary function of a food distributor is in providing food and related items like cups, plates, napkins, etc. to the food service operators.
The food service operator is an establishment that provides food or related products. For example, a chef at a restaurant, a grocery store, a convenience store, or a school or hospital cafeteria can all qualify as examples.
Therefore, the process of food distribution is quite complex as it involves the transportation of food from the manufacturer to the food service operator. In some cases, the food service distributors do not physically deliver goods to the food service operator.
Advantages Of Commercial Food Distributor
The food distributors are very important and the way they serve growers, producers, and factories and beyond the process of getting products from point A to point B.
The food distributors play a couple of roles throughout the process.
- Marketing and Selling:
The food distributors are supplied with market conditions and they sell the products which are further carried to foodservice operators.
The food service operators always prefer to purchase foods from the distributors as it eliminates the need to work with individual manufacturers (producers, growers, factories) to procure individual products.
Therefore, it is not always the case, but it tends to be the most prevalent scenario. The marketing efforts of food distributors help the manufacturers to focus mainly on the core expertise to work with the distributors just as an intermediary, then having to manage the relationships with individual foodservice operators.
Significantly, large distributors have the capability to enable and furnish marketing materials along with the merchandise, which is a huge added value to foodservice operators.
- Transportation and Warehousing:
The primary function of every distributor lies in the transportation of products from manufacturers to foodservice operators. The process allows manufacturers to outsource the logistics services without investment and management of dedicated fleets.
The type of warehousing depends on the distributor and the kind of product distributed. The large distributors operate and work with their own warehouses. The functional distributors relinquish their warehouse and distributors through the transportation of refrigerated sprinters directly from the producer to the food service operators.
The method is also adopted by small and local distributors who solicit LTL shipments from larger distributors with the use of methods like cross-docking to deliver smaller shipments of products to foodservice operators.
Statistics of the Food Service Industry
The divergent demands and various natures of food service operators significantly play a large role in defining the focus of any food distributor:
- Currently there are 1,249,737 food operators in the US alone
- The restaurants combine as the largest portion at 6,482,462 followed by on-site food service (i.e., school, hospital, workplace, cafeterias, catering, lodging, recreation, military) accounting for 337,510 and retail food service (supermarkets, convenience stores) with 264,125.
- By 2023 the industry is projected to grow by 0.7%.
Types of Food Service Distributors
There are four primary types of food service distributors Therefore, each type caters to specific types of food service operators based on the industry and its needs.
Retailers who need to purchase bulk items work with broad-line distributors who serve as one-stop shops for them. The broad-line distributors are the best solution for buyers who are seeking a dynamic process without the need for multiple distributors.
The broad-line distributors do not pursue any kind of specialized product but they serve foodservice operators with many kinds of different services. For a similar reason, the broad-line distributors work with chains and larger retail outlets because they have the ability and resources to serve a vast range of clients.
The broad line distributors based on the size and volume of goods serve the clients with many advantages like volume discounts, pricing incentives, and much more dedicated support than that provided by alternative models of distributions.
While broad-line distributors offer thousands of products, the small operators do not have much-given advice in influencing the nature of products the distributors tend to carry or will carry in the upcoming future.
The larger leveraged operators have much ability to negotiate with broad-line distributors for bringing newer products, but these are not always available to all the distributor's accounts. The smaller foodservice operators can collaborate in forming Group Purchasing Organizations for demanding similar terms to the larger leveraged organizations, but the small food service operators do not have much flexibility with broad-line distributors on their own.
Specialty distributors are specialized in the distribution of one kind of specific product type or industry and they are apart from the rest of the distributors owing to the efficiency within the niche.For Example:
A specialty distributor of fresh seafood, who is catering to aristocratic seafood restaurants and seafood markets will arrange its supply chain and logistics strategy around getting fresh goods to the food service operators more instantaneously, safely, and effectively.
The specialty distributor will use refrigerated fleets and special refrigerated containers in adherence to specific food safety standards. The specialty distributor will invest in equipment for keeping the seafood fresh and safer for consumption throughout the process.
Therefore, all these factors serve the specialty distributor with more advantages than the broad-line distributor who focuses more on a vast array of shelf-stable, packaged goods. Usually, specialty distributors operate exclusively within a particular niche of the industry.
For example, the specialty distributor works with Middle Eastern restaurants across a particular region. As this distributor only carries limited, niche products it proposes the chefs at Middle Eastern restaurants, by allowing them to choose from a more targeted list of ingredients that may not be available for purchase from a broad-line distributor and therefore, potentially eliminating the need for purchasing entire pallets of products.
In contrast to broadline and specialty distributors, redistributors do not sell directly to the food service operators. Therefore, they purchase directly from manufacturers and then work with smaller-scale distributors who provide less-than-truckload (LTL) shipments In the logistics space of the food industry, not every distributor has the necessary client base for operating and delivering the products in bulk quantities. These small-scale distributors serve independently, and the non-chain foodservice operators are too small in conducting business with the broad-line distributors. A small, local distribution company that is working with the seafood restaurant could only make use of a redistributor to purchase LTL quantities of seafood, by using its own refrigerated vehicles for delivering the product to the restaurant.
Cash and Carry Distributor:
A cash-and-carry distributor is exclusive because it is the only type of distributor that does not directly transport products to foodservice operators in the freight shipping services industry. Therefore, the food service operators go to cash and carry warehouses for picking out wholesale products to be purchased. The most common customers of cash and carry distributors are restaurants, caterers, and nonprofits.