There are various types of local food distributors. From farmers who wish to sell directly to businesses to suppliers who purchase from nationwide wholesalers and regional growers. Unlike the biggest broadline food distributors, these companies focus on selling goods to smaller customers in their local area. Their emphasis on customer service allows them to offer better flexibility and quality with their products and food distribution services. As such, local food distributors play a crucial role in the food supply chain and local economies. There are multiple differences between the operations of regional and national suppliers. In this post, we’ll share details about the way local food distributors work. We’ll also showcase the main pros and cons of buying wholesale products from nationwide and regional suppliers.
Key takeaway: Local food distributors are small to medium-sized food wholesalers. They often specialize in a single product category (such as wholesale meat distribution) but there are also local broadline suppliers (see what is broadline distribution). The alternative to partnering with local food distributors is using the services of nationwide suppliers.
What Are Local Food Distributors
The term refers to regional suppliers that specialize in B2B sales and bulk deliveries of food in different categories. Most of these suppliers are based in big cities within their states and offer goods to nearby communities as well. Some regional distributors also deliver products to nearby states.
How Do Local Food Distributors Operate?
Regional food suppliers usually have great warehousing and storage facilities and own a couple of vans. Their delivery area spans from businesses a few miles away to companies a hundred miles away. Some local food distributors also aim to deliver to restaurant businesses and other companies further away. However, that increases their labor and transportation costs and reduces their profit margins. Regional suppliers can also invest in new warehouse facilities and distribution centers. This increases their delivery network and gives them more opportunities to find new customers.
Local food suppliers act as intermediaries between retailers or food service businesses and producers, manufacturers, or importers. They purchase in bulk from farms, processors, and manufacturers. Distributors sometimes invest in their own processing or packaging capabilities. For example, they might purchase freshly caught fish, process it, and sell it to businesses in the restaurant industry. This adds further value to their services and increases their profits and revenue. It’s important to keep in mind that there are differences between the distinct types of wholesalers. For example, specialty food suppliers usually focus on a specific niche market or product category. Some of them import high-end goods from Italy and other European countries. Others sell gourmet products that have lower demand but high wholesale prices and profit margins.
It’s difficult for local food distributors to compete with large wholesale food suppliers for restaurants and grocery retail stores. However, businesses that search for more personalized customer service are likely to prefer partnerships with regional suppliers. Furthermore, local food distributors primarily offer goods produced by local farms and businesses. This is yet another reason why restaurant managers or catering businesses might choose to work with local produce distributors instead of nationwide giants.
Regional Suppliers VS National Food Distributors
Reasons to use local food distributors:
- They aim to offer better customer service and quality of their products;
- Local suppliers help nearby communities and the local economy by sourcing products from local growers and producers;
- Local wholesalers have better flexibility in terms of MOQ and deliveries;
- Regional distributors can offer consultations and are often more knowledgeable in their respective markets compared to large broadline distributors.
Reasons to partner with nationwide food suppliers:
- From bulk restaurant supplies to fresh meat and seafood, these companies can offer a wider selection of goods;
- Large restaurant and grocery store distribution companies can benefit from economies of scale. They often have lower prices compared to local food distributors;
- Nationwide suppliers usually have better technological integrations. They can offer vendor-managed inventory (what is VMI), automation solutions, eCommerce catalogs, and seamless ordering processes;
- Large distributors can offer additional services such as product sourcing, packaging, processing, white-labeling services, and marketing support.
Examples of Local Food Distributors
If you wish to find suppliers for your business, you can always sign up for BlueCart as a buyer. Allow us to share a few examples of regional suppliers that specialize in their respective fields.
- Brothers Produce. A company specializing in bulk sales of fresh produce in Houston and nearby areas.
- Atomic Coffee Roasters. Known for their wholesale coffee beans and additional support for their clients in terms of training and equipment.
- The Swiss Bakery. They specialize in retail and wholesale sales of baked products and imported goods from Switzerland and other European countries.
- MeatCrafters. The company specializes in B2B and B2C sales of high-end meat products.
- Seatide Fish & Lobster. From frozen fish to gourmet seafood products such as caviar, they sell and deliver a variety of goods in the New York metropolitan area.
Frequently Asked Questions about Local Food Distributors
From tips on increasing wholesale sales to the trends in high-demand products to sell, you can find valuable information on our website. Below are some commonly asked questions about local food distributors in the US.
How to Start a Local Food Distribution Business?
Starting a company that specializes in B2B sales of food products can be a profitable business endeavor. The first thing to consider is the types of goods your business will focus on. Keep in mind that there are different regulations for wholesalers depending on the state they operate in. Entrepreneurs with limited capital are likely to focus on one niche and slowly expand their product offerings. Once you have a business plan, you should focus on finding producers, manufacturers, and growers to partner with. Simultaneously, you should invest in marketing in order to find businesses that wish to order products from you. Check out our full guide on how to become a wholesaler.
Are Food Distribution Businesses Profitable?
Traditionally, food suppliers have low profit margins. However, the demand for their services is still high, and running a local food distribution business can be profitable. One of the latest grocery and restaurant industry trends is to buy more local products. That's yet another reason to consider starting a wholesale distribution company. This has helped local food distributors increase their revenue. In order to be a profitable food supplier, business owners need to adapt to the latest wholesale technology. It helps local food distributors streamline operations, increase efficiency, and find new customers.
How Many Food Distributors Are There in the US?
According to estimates, there are more than 27,400 companies that operate as wholesale food suppliers. The majority of them are local food distributors that focus on a single category and have a limited delivery network. However, they are the backbone of wholesale trade and the food supply chain. Small suppliers partner not only with local producers and farmers but also with nationwide distributors. This helps them easily offer a wider range of products to local businesses. Most local food distributors deliver goods to food services businesses or small retailers. Large grocery chains rarely partner with local suppliers and prefer to work with big national food distributors.
BlueCart: The Right Solution for Small and Big Local Food Distributors
Whether you wish to sell produce, milk, and other agricultural products from your dairy farm or you’re a wholesale coffee distributor, BlueCart can get your business to the next level. Thanks to our solutions, food distribution companies can find new customers and improve their business processes. Schedule a free demo today and see why BlueCart is the all-in-one software for any wholesale distribution business.