Food Distributors
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 27,400 food distributors in the US consolidate products from multiple suppliers for delivery to retailers, foodservice providers, and other customers. Distributors may offer a wide variety of food products or specialize in one or more categories. Major categories include dry grocery, frozen and refrigerated foods, dairy, poultry, seafood, meat, fresh products, or baked goods.
Volatility In Manufacturers’ Prices
Food distributors act as a “middleman” between suppliers and retailers, leaving companies vulnerable to changes in manufacturers’ prices, which can rise (or fall) by double-digit percentages in a single year.
Direct Selling And Buying
Major food manufacturers, looking to optimize their own supply chains, are selling directly to large retailers and eliminating food distributors’ role as the middleman.
Industry size & Structure
A typical food distributor operates out of a single location, employs fewer than 10 workers, and generates about $32 million annually.
- The food distribution industry comprises about 27,400 companies, which generate over $875 billion annually and employ about 817,000 workers.
- Most food distributors are small, independent operators.
- Customer segments include retailers (grocery stores, convenience stores, drugstores), food service (restaurants, hotels, schools, hospitals), and military commissaries.
- Large food distributors include Sysco, US Foods, C&S Wholesale Grocers, Performance Food Group (PFG), and Associated Wholesale Grocers.
Industry Forecast
Food Distributors Industry Growth
Recent Developments
Jan 30, 2025 - Wholesale Prices Surging
- Producer prices for grocery and related product merchant wholesalers jumped 14.9% in December compared to a year ago after rising 5.9% in the previous December-versus-December annual comparison, according to the latest US Bureau of Labor Statistics data. Wholesale food price inflation is surging, driven in part by a spike in egg, fruit, and vegetable prices. In total for 2024, wholesale food prices rose in eight of the 12 months. Employment by food distributors grew 2.4% year over year in November to a new high for the industry, while average wages at food distributors remained flat over the same period at $26.79 per hour, BLS data show.
- California truckers got a reprieve from the state’s clean-truck mandate after the California Air Resources Board (CARB) dropped its request to the EPA for a waiver that would have required truckers to buy battery-electric and hydrogen fuel cell trucks, The Wall Street Journal reports. The request was withdrawn in January due to concerns the Trump administration would deny it. Following California’s regulation requiring manufacturers to sell an increasing number of zero-emissions trucks starting with the 2024 model year, Oregon, Washington, Massachusetts, New York, and New Jersey enacted similar rules, and other states are introducing similar legislation. The mandate would have been expensive to comply with for operators of large fleets as battery-electric semis cost about three times as much as diesel trucks. Some food distributors, including UNFI, had begun deploying battery-electric trucks to comply with California’s mandate. California regulators say they’ll continue efforts to reduce emissions under existing local regulations.
- With the transportation sector under pressure to reduce carbon emissions, grocery wholesaler UNFI has rolled out zero-emission trucks and cold trailers to serve its delivery routes in Northern California, Supermarket News reports. The deployment of the Class-8 battery-electric semi-trucks (provided by Penske Truck Leasing) paired with refrigerated trailers cooled by Carrier’s Vector eCool transport refrigeration unit (TRU) furthers UNFI’s zero-emission strategy and goal of lowering its delivery costs-per-mile, according to the company’s VP of Transportation Nick Selders. “Implementing this zero-emission delivery solution will enable us to become more cost-efficient and prevent hundreds of metric tons of greenhouse gas emissions from entering the atmosphere per year.” Previously, UNFI unveiled plans to add 53 all-electric TRUs to its fleet at its distribution center in Riverside, California. The California Air Resources Board has mandated all truck TRUs in the state achieve zero emission by the end of 2029.
- Since the Strengthening Organic Enforcement (SOE) final rule was fully implemented in March, food distributors that import or export foods marketed as organic need to verify that those products have proper organic certification. The SOE rule updates the USDA organic regulations to strengthen oversight of the production, handling, and sale of organic products. Since the rule took effect, the agency has uncovered several incidents of fraud in the organic marketplace, particularly involving imports, and is prosecuting offenders. While businesses that strictly transport organic products are exempt from the organic certification requirement, importers and exporters are not exempt under SOE. The National Organic Program ( NOP) Import Certificate provides traceability to the port of entry and ensures an auditable record trail to effectively trace imports back to exporters. The grace period where distributors and others along the supply chain were granted an extension to get certified, has expired.
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