Rethinking Your Approach to Foodservice Distributors
In the competitive landscape of consumer packaged goods (CPG), many brands mistakenly invest significant time and resources into selling their products to foodservice distributors.
The Misconception of Distributors as Sales Partner
Foodservice distributors primarily focus on logistics and distribution rather than sales. Their main role is to ensure that products reach restaurants, cafeterias, and other foodservice establishments efficiently. While they may carry your product, they are not incentivized to actively promote or sell it. This fundamental misunderstanding can lead brands to waste valuable time and energy pursuing relationships with broadline distributors, which often do not result in significant sales growth.
The Inefficiency of Selling to Broadliners
Engaging with broadline distributors can be a lengthy and complex process, often involving extensive negotiations and compliance with various requirements. Many CPG brands find that the return on investment for these efforts is minimal. Distributors may have a vast portfolio of products, making it challenging for any single item to stand out. As a result, brands may find themselves lost in a sea of competition, with little to no support from the distributor to drive sales.
A Shift in Strategy
Instead of focusing on selling to foodservice distributors, brands should consider alternative strategies that can lead to more effective market penetration. Here are a few suggestions:
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Direct Relationships with Foodservice Operators: Building direct relationships with restaurants, cafes, and other foodservice operators can lead to more meaningful partnerships. By understanding their specific needs and preferences, brands can tailor their offerings and marketing strategies accordingly.
Targeted Marketing Campaigns: Invest in targeted marketing campaigns that speak directly to foodservice operators. Highlight the unique selling points of your product and how it can benefit their business.
Sampling and Promotions: Offering samples or promotional deals can entice foodservice operators to try your product. Once they experience the quality and value, they may be more inclined to place orders directly.
Leverage Social Media and Online Platforms: Utilize social media and online platforms to engage with foodservice professionals. Share success stories, recipes, and tips that showcase how your product can be integrated into their menus.
While foodservice distributors play a crucial role in the supply chain, they are not the ideal partners for driving sales of CPG products. By shifting focus away from broadliners and towards direct relationships with foodservice operators, brands can create more impactful connections and ultimately drive greater success in the foodservice market.
If you like this share it and follow me Mike Levinson, RD and FS Octopus
Accomplished Sales and Business Leader
8moI have found that very few foodservice distributors "create" business for a brand. They will provide products to a customer based on the customer requests but will not generate the interest. When I ran a distributor, that's what I tried to instill in my sales reps to separate us from the competition. CPG brands need to drive interest with operators which will then lead to demand for the distributors to supply your product.
Co-Founder/Sales Dir. at Sabanero NY Distribution
8moI enjoy working with both, but definitely have very very strategies for each one
Strategic Foodservice Industry Advisor
8moI think this misses the point, the first questions should be; 1- Is the product designed for the requirements of foodservice vs retail? 2- What are the unique benefits of our product? 3- will the velocity eventually generate impactful volume for both the distributor and operator In the 80s you could "force" distribution by selling key operators as the industry was growing and needed more products today is a different environment as slot and/menu space is more valuable
Founder & CEO Emerald Ecovations and Paradigm Group, ESA Accredited
8monice post and spot on - Barriers of entry to both end user clients / and in many cases service providers are not getting to see the newest and best in both product and solutions . We believe transparency is necessary to unclogging these barriers . We also believe the distribution groups who encourage education and solution selling will find Organic Growth once again . EmeraldEcovations.com OG25 is a great start
Commercial Leadership | General Management | 3X Private Equity | FMCG | Executive P&L Leader | EVP | SVP | Chief Customer Officer | Turn Around | Board Advisor
8moMike Levinson, RD build a plan with targeted operators and pull / push. Helps to be pragmatic on how many markets you can build out with your people resources. Scale market by market. Distribution will support you if you can create demand. But you’re correct , distribution won’t do the work for a brand unless it’s there label.