New report covers US food distribution

Aug. 18, 2010
Research and Markets has announced the addition of the Food Distributors report to its offerings.

Research and Markets has announced the addition of the Food Distributors report to its offerings.

The US wholesale food distribution industry includes about 33,000 establishments (single-location companies and units of multi-location companies) with combined annual revenue of about $670 billion. Major companies include McLane Company, Supervalu, Sysco, and US Foodservice. The industry is concentrated: the 50 largest companies generate about 50% of revenue.

Demand is driven largely by demographic shifts, particularly trends in population and age, working women, race and ethnicity, household size, and levels of disposable income. Profitability of individual companies depends on a good product mix and efficient operations. Large distributors are advantaged by bulk purchasing and economies of scale in distribution. Smaller companies can compete effectively by specializing in certain products or focusing on a geographical area. The industry is capital-intensive: average annual revenue per worker is about $900,000.

Major products are frozen, processed, and prepared foods; dairy items; poultry, fish, and meat; fresh produce; and baked goods.

Distributors are classified as “broadline,” meaning that they sell a range of products to multiple customer segments; “specialty distributors,” which focus on a certain product category or customer segment; or “systems distributors” that sell to chain restaurants or multi-tenant operators. Only about 120 large companies are broadline; the remaining wholesalers typically specialize in a specific market. Foodservice customers have surpassed grocery stores as the largest customer base for food wholesalers.

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