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 27,300 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 $23 million annually.
- The food distribution industry consists of about 27,300 companies, which generate over $660 billion annually and employ about 828,600 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
Oct 30, 2023 - Food Sales Rise
- Sales for food distributors rose in June compared to a year ago against a backdrop of rising prices for food at the retail level and sustained consumer spending. In August, overall employment by food distributors was relatively unchanged year over year while average industry wages dipped versus July but were up compared to last year. Following two consecutive years of double-digit sales growth in 2021 and 2022, sales for the US food distributors industry are forecast to moderate, growing at a 1.96% compounded annual rate from 2022 to 2027, slower than the growth of the overall economy.
- Robust spending at food and drinking establishments helped retail sales to beat expectations in September, according to advance estimates of US Retail and Food Services from the Census Bureau. The advance monthly sales estimate was $704.9 billion buoyed by rising wages that outpaced inflation, encouraging consumers to continue to spend. Retail trade sales were up 0.7% from August 2023 and were 3.0% above last year. Non-store retailers were up 8.4% from last year, while food services and drinking places led all categories, rising 9.2% year over year. Consumers splurged at restaurants and bars, part of a broader post-pandemic trend toward spending on experiences.
- Seafood sales plummeted in August compared to last year, defying deflationary price trends, according to Supermarket News. The steep decline in fresh and frozen seafood dollar sales and volume exceeded what retail data predicted for the month. Fresh seafood sales plunged 7.4% in August to $595 million, while fresh seafood volume decreased 6.6%. Frozen seafood sales dropped 7.7% to $619 million, while volume fell 8.1%. Shelf-stable seafood sales were the exception, increasing a modest 1.9%, with volume rising by 2.%. Consumers dined out more in August which may help explain the decline in retail seafood sales. Fresh seafood prices dropped 0.9%, shelf-stable seafood prices dropped 0.8% and frozen seafood prices inched up 0.5%, according to new Circana data provided by 210 Analytics.
- Store brands continued to post record sales and share during the first half of 2023, according to the Private Label Manufacturers Association. Store brand dollar sales across all US retail outlets increased 8.2% vs. a 5.1% gain for national brands, according to Circana data from the six months ending June 18, compared to the same six-month period in 2022. For June, the most recent Circana report finds that store brand units dipped 0.6%, while national brands fell 5.1%. Store brand dollar share rose to 18.8% in the first half of this year, while unit share rose to 20.5%, also a new high. Over the past 52 weeks, beverages experienced the largest store brand dollar sales gain, up 19%, followed by general food and refrigerated, both ahead 16%; then frozen and general merchandise, both up 8%, per Circana.
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