Do you have a thriving food business? You must be excited to have your organically grown produce or baked goods on the farmers’ markets, shelves of local retailers, or just online.
The expanding customer base means an increased demand for the products. Thus, your company may no longer be able to handle efficiently all the activities linked to the transportation and distribution of these products.
That means that you need to get a food distributor if you want to take your sales to the next level. The article will tell you what a food distributor is and how you can choose one.
Who is a Food Distributor?
A food distributor is a company that assists the manufacturers with the delivery of products to the stores. Distributors play a vital role in the supply chain, for they bridge the gap between the manufacturers, customers, or retailers.
You can opt to use distributors when the cost and the process of marketing your products are costly, thus affecting your company’s profit and growth.
Therefore, a food distributor will collect products from your premises or warehouse and transport them to the retailers. If you are exporting your food to a different country, then you will send your food to the distributor, who will help store it in its warehouse, and then transport it to their retailers.
Further, the distributor purchases products from the manufacturer below the retail price and supply them to retailers, restaurants, professional kitchen, or any other market.
Having the right food distributor is critical because this company has enough influence on the size of the audience your goods will reach. Therefore, you should partner with the right distributor to enjoy economies of scale and increase your company profits.
Types of Distributors
There are different food distributors in the market, and they all provide various services. For instance, one type will handle the transportation of the products while another goes beyond that and assists you with marketing and sales.
Another difference is where they supply these products, the type of retailer they work with, and additional services that they offer besides transportation.
You can find the following types of food distributors in Malaysia:
Nationwide Distributors: These are distributors that move goods from the manufacturers to the stores or markets across the country. A countrywide distributor is very influential, and working with such a company is extremely beneficial for you will expand your customer base quickly.
These distributors have a well-established relationship with major retailers where your customers shop; thus, they work with well-known stores.
Further, they don’t work with fledging brands; thus, you have to prove to them that you can effectively cater to a niche market.
Regional/Local Distributors: They supply in a smaller geographic area and may not be able to get your product into certain stores.
These distributors have fewer accounts to manage; thus, they are more committed and engaged with manufacturers they deal with. Therefore, they are willing to offer you more insight into your products and competitors.
The partnership is more mutually beneficial since both of you want to grow your brands and influence in the market.
Specialty Distributors: They deal with specialty food items that are sold in specific locations or those that need unique handling. These distributors are experienced in handling such products and will ensure that they are taken care of properly.
The distributors have more strict guidelines, and requirements, and are expensive. For instance, some specialty distributor deals with small business retailers; thus, they may not help you reach specific goals like supplying to corporate stores.
Therefore, it’s essential to get their requirements forehand before entering into a partnership with them.
Tips for Selecting the Right Food Distributor
1. Get Information about the Distributor
Gather information about the distributor’s services and the type of products they deal with. You need to understand whether their standards agree with your business’s specific requirements. You can get this information from the trade shows, internet reviews, or directly from the company itself.
Further, you need to understand how long they take to pick products from your warehouse and deliver them to the stores. This information is vital because it determines your sales and profits.
2. Develop Partnerships
Developing a strategic partnership should be your ultimate goal. For instance, a distributor will notify the manufacturer when a quality issue arises. They will anticipate what is needed and communicate it to the manufacturer.
They will communicate with the retailer when production delays arise due to downtime or maintenance. Thus, a manufacturer should select a food distributor willing to create room for increased understanding and mutual benefits
One of the easiest ways of meeting potential food distributors is by attending tradeshows, and events sponsored by organizations working in the food industry. These networking events bring together key industry players such as manufacturers, distributors, retailers, and customers.
4. Review the List of Distributors
You can assess the list of potential food distributors on their association websites or trade publications. Contact each distributor individually, speak to a decision-maker, and gauge their interest in your products. Finally, shortlist all the interested distributors based on their buying price and coverage.
Characteristic of the Right Food Distributor
- Potential food distributors have an extensive sales territory, for they supply products to a bigger part of the hospitality industry.
- The right food distributor carries similar products, and yours fits well in their existing portfolio.
- The company has been in this business for long, thus has established a good relationship with retailers and customers.
- The distributor’s goals and vision are aligned with your business’s goals and core values.
- The right distributor has a good reputation in the food industry.