Food Distributors

Industry Profile Report

Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters

Industry Overview Industry Structure, How Firms Opertate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.

Call Preparation Quarterly Insight, Call Prep Questions, Industry Terms, and Weblinks.

Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.

Industry Profile Excerpts

Industry Overview

The 27,600 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.

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.

Volatility In Manufacturers’ Prices

Food distributors act as a “middleman” between suppliers and retailers, leaving companies vulnerable to changes in manufacturers’ prices, which can change as much as 9% in a single year.

Industry size & Structure

A typical food distributor operates out of a single location, employs 27 workers, and generates about $24 million annually.

    • The food distribution industry consists of about 27,600 companies which generate over $675 billion annually and employ about 757,000 workers.
    • Most food distributors are small, independent operators; 78% have a single location, and 65% employ fewer than 10 workers.
    • Customer segments include retailers (grocery stores, convenience stores, drugstores), foodservice (restaurants, hotels, schools, hospitals), and military commissaries.
    • Large food distributors include SuperValu, Sysco, C&S Wholesale Grocers, Wakefern Food Corp., and Associated Wholesale Grocers.
                                    Industry Forecast
                                    Food Distributors Industry Growth
                                    Source: Vertical IQ and Inforum

                                    Coronavirus Update

                                    Apr 19, 2022 - Buying Habits May Change Amid Rising Food Prices
                                    • As food prices have gone up, grocery chains have benefitted from consumers absorbing higher prices. However, as year-over-year at-home food prices rose 10% in March, some industry watchers suggest consumers may have reached an inflection point and will begin looking for bargains and spending less. In the early days of the pandemic, high demand and supply chain problems kept promotional deals to a minimum, but some industry insiders feel consumers will increasingly shift their spending to bargain brands and low-cost retailers if high prices persist.
                                    • The Biden administration announced a plan to recruit and train a new generation of truck drivers. The Truck Action Plan was developed by the administration's Supply Chain Disruptions Task Force, which was created to address near-term supply chain bottlenecks that were caused or made worse by the coronavirus pandemic. The plan includes providing resources and funding to help states expedite the commercial driver's licensing process, a 90-day challenge to expand a registered apprenticeship program, and outreach to veterans as recruitment for new drivers. Senior administration officials stressed that though some of the steps are focused on longer-term changes, their proposal includes actions that would support short-term economic recovery and help alleviate supply chain snarls.
                                    • The Food and Drug Administration (FDA) has issued a blueprint that the agency said outlines the approach it will take over the next decade to improve food safety. Core sections of the New Era of Smarter Food Safety Blueprint address enhanced traceability, more innovative tools and approaches for prevention and outbreak response, new business models, and a culture of food safety. The FDA says that enhanced traceability, coupled with advanced analytical tools, may help the FDA spot potential problems in advance and prevent or lessen the impact of recurring outbreaks of illnesses associated with the consumption of certain foods.
                                    • Wholesale grocery sales fell 0.5% in value month over month on an adjusted basis but increased 22.4% in value year over year on an unadjusted basis in February 2022, according to the US Census Bureau. Year-over-year changes may be abnormal due to the large pandemic-related decrease during corresponding periods in 2020.
                                    • Russia’s invasion of Ukraine roiled global energy markets and has pushed diesel prices higher, driving up food distributors’ operating costs. As of the second week of April, the average US price for on-highway diesel was up $1.94 per gallon compared to the same time a year earlier, according to the Energy Information Administration. According to the Department of Energy, US diesel stockpiles are at their lowest level in eight years.
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