As a result of the pandemic, the wholesale food industry faces many new threats. The most significant threat is a decrease in demand for supplies as hotels, restaurants, schools, and sporting venues run at reduced capacity. As countries fight the virus, consumer spending on food has not recovered to pre-virus levels, as restaurants reopen, close, and reopen partially. To supply retail grocers, some distributors have developed their business models. However, many retailers have turned to their data to review each product line and assess if it is profitable.
Understanding food distribution
Food dealers distribute directly to retail food establishments as well as wholesalers that market these products to retailers. They usually sell a diverse variety of items to their customers. However, many specialize in a specific food category, such as beef, cheese, or fruit. The convenience of delivery is provided by distributors to their accounts, but they typically need minimum orders to apply for delivery. Many food distributors also have a “will call” service, which allows consumers to pick up products at the factory without meeting a delivery minimum.
Opportunities for food wholesalers
Restaurants and retailers benefit from food wholesalers and distributors because they avoid the difficulty of dealing with a long list of individual suppliers and arranging the logistics of numerous pickups and deliveries. Wholesalers and distributors that specialize in a specific form of food, such as meat or produce, build supply networks that enable them to substitute comparable goods when their regular offerings are unavailable. Producers profit from food wholesalers and distributors because they save time by enabling them to make fewer big deliveries rather than many smaller deliveries.
Challenges faced by food wholesalers
Food wholesalers and distributors face the difficult task of managing perishable goods and getting them into the hands of consumers when they are still new. To prevent food from spoiling, they’ll need a lot of infrastructures, such as walk-in coolers and freezers. Because of the popularity of locally produced foods, some retailers avoid large-scale wholesalers and distributors, which prefer to specialize in products produced in large quantities by large-scale manufacturers.
Shifting product lines to meet new demand
Fill your pantry and eat it up (consumption expands). Because of shortage worries or health concerns, consumers stock up, resulting in a rise in consumption both during and after the crisis. Cleaning supplies, vitamins, and supplements are examples of products in this archetype.
Stock your pantry and keep it fresh (consumption does not change). When people are afraid of a shortage, they buy more things like pet food and toilet paper at first. However, consumption does not rise during the crisis, resulting in volume decreases following the crisis.
Now I’m at home (consumption shifts). Consumers are forced to move on-the-go occasions for items like coffee and alcohol from in-person food-service providers to online stores as a result of work-from-home and shelter-in-place policies. As a consequence, during and possibly after the crisis, there will be more demand for these goods.
Not right now (consumption declines). Consumer trust is eroding, and an emphasis on critical categories has resulted in a reduction in purchases of such products during the recession, such as beauty, food, and beverages for immediate consumption.
Change sales channels
When more people shop online, food wholesalers are collaborating with grocers to repackage products to meet retail standards and be part of this expanding platform.
Even though retailers and manufacturers have invested heavily in e-commerce outlets, the grocery industry has traditionally had low online penetration. For the first time, many people have tried grocery delivery or click-and-collect. As a result, household penetration of grocery e-commerce has increased significantly.
Offer discounts for products with short expiration dates
Since certain items, such as dairy, meat, beer, baby food, and vitamins, degrade faster than others, they are at risk of becoming redundant if not closely monitored. Using market intelligence to keep track of the stock levels to reduce the chance of dead stock.
Try selling foods that are nearing their expiration date at a deep discount, even approaching the cost of goods. It’s preferable to move the stock than to have it end up in the trash. You can use Phocas to configure your dashboard to see the shelf life and quantity of perishables you have on hand so that you can give appropriate discounts.
Customers also buy their items from wholesalers who give the best rates and the shortest delivery times. However, offering the lowest rates is not always possible. That doesn’t rule out the possibility of gaining a competitive advantage.
Your sales team will conveniently keep up to date on developments and costs with business intelligence tools like Phocas. Your team will use Phocas to figure out which companies are purchasing one product but not the other. This opens up the possibility of cross-selling. Your team may discover, for example, that one company is purchasing pasta but not the sauce.
When the team can segment these patterns by country, they can easily determine if a competitor is targeting a specific region. Region A, for example, is ordering both hot dogs and buns, while Region B is no longer ordering hot dogs. Your team will be able to build responsive cross-selling offers on exclusive bundled deals as a result of this exposure.
Offer incentives for referrals
It all comes down to who you know. Your customers are linked to their own networks. Use them to your advantage by providing a referral bonus so you can quickly tap into these wholesale connections.
Dropbox’s referral service (modeled after PayPal’s popular “refer-a-friend” program) resulted in a 60 percent rise in signups. Signups increased from 100,000 to 4,000,000 in 15 months, making it a success story for the books. Dropbox offered extra storage space to both referrers and those that were referred to its cloud-based data storage platform. The prizes were tailored to each company’s specific niche. They weren’t just giving out incentives; they were giving out tailored and personalized rewards.
Bakery goods, dairy products, jam, jelly, drinks, snacks, and other wholesale distributor food business items are still in demand by customers because they are everyday products in every household. As a result, starting a company in this sector can be extremely lucrative. Since Indians are foodies, this is one of India’s best wholesale businesses.
When combined with a successful wholesale strategy, wholesaling can be a profitable business venture. MGH distributors, Yangon, Myanmar provides you with the best wholesaling food distribution service.