The food distribution sector in the US is very well-developed. The main drivers for the growth of food distribution companies are consumer spending and technologies that help distributors increase their margins. BlueCart is an example of such technology. Our software helps suppliers streamline their business processes and find new customers among grocery stores, restaurant businesses, and other companies. Although the biggest broadline food distributors in the US shape the industry, smaller suppliers also play an important role. They make the market competitive and push it forward. Furthermore, as broadliners focus primarily on high-demand products, distributors that focus on a specific niche such as specialty food suppliers answer the demand for less-known products. In the next paragraphs, we’ll share more about the industry of food distribution companies, the different types of such businesses, and how they operate as part of the food supply chain.
Key takeaway: Most food distribution companies specialize in a single category and gradually expand their product offerings. Large wholesalers are broadline distributors that offer a wide selection of food products and supplies.
What Are Food Distribution Companies
The term refers to businesses that purchase products in different categories from food manufacturers, processors, and growers. These goods are then sold to grocery stores or food service companies. A lot of food distribution companies sell more than just food products. They can also offer restaurant supplies or services related to staff training and equipment maintenance.
B2B sales are the main revenue stream of food distribution companies. Some of them also operate physical warehouses that are open to the public. However, there are certain terms (most commonly a membership fee) for buying from these wholesale companies.
Although food distribution companies traditionally act as intermediaries between producers and other businesses, some suppliers also include other stages of the food supply chain in their operations. For example, a dairy farm might also have its own packaging and processing facility and deliver dairy goods. Although the term food distribution companies is primarily used to describe large enterprises like Sysco and US Foods, the majority of food distributors are actually small and family-owned suppliers.
Types of Food Distribution Companies
Food distributors share multiple similarities. However, there are also differences between the categories of food distribution companies. Let’s examine some of the main types of wholesale distributors.
- Producers. Many food manufacturers and growers also develop their own distribution networks. This allows them to skip the middleman and increase margins by selling directly to businesses in the restaurant industry.
- Specialized suppliers. These are companies that specialize in deliveries of one (or a few) food product categories. For example, produce distributors specialize in bulk sales of vegetables, fruits, microgreens, pre-cut produce, and frozen goods. Wholesale meat distribution companies are focused on selling meat cuts, lunch meat, and seafood. Specialized suppliers often have one or two distribution centers. They primarily work as local distributors. However, there are some that offer nationwide distribution services.
- Broadliners. The term refers to large or medium-sized food distribution companies. But what is broadline distribution exactly? From bulk restaurant supplies to fresh vegetables and meat, these food distribution companies offer the biggest selection of products in their eCommerce catalogs. Some broadliners might have high MOQ (minimum order quantities) as they aim to partner with large grocery chains or hospitality groups.
How to Choose Between Food Distribution Companies
When searching for vendors, businesses should pay attention to a number of factors. Here are some of the major things to consider if you wish to find suppliers in a specific niche or you’re searching for broadliners.
- Business needs. Some business owners look for broadline distributors that can be the one-stop shop for all the food products they need. Others prefer to work with small and local distributors.
- Availability and flexibility. This is especially important to restaurants, catering businesses, and other companies that buy wholesale products frequently.
- Technological integrations. Suppliers that integrate technological solutions can make the ordering process much easier. Furthermore, some large companies also search for solutions such as vendor-managed inventory (what is VMI) or other types of automation.
- An optimal combination of freshness and quality at competitive wholesale prices.
Top Food Distribution Companies in the USA
There are tens of thousands of food distribution companies in the US. Most of them deliver to a limited area within their states. As one of the latest restaurant industry trends is to include more organic and locally-produced ingredients, many restaurant managers search for local suppliers. However, large distributors are often more convenient and can give their clients better terms. Here are some of the biggest food companies in the US.
- Sysco;
- Performance Food Group;
- US Foods;
- WEBstaurant Store;
- Chefs’ Warehouse;
- United Natural Foods;
- SpartanNash;
- Gordon Food Service (GFS);
- KeHE Distributors.
Frequently Asked Questions about Food Distribution Companies
BlueCart helps its customers not only with reliable software solutions for wholesalers but also with valuable tips and advice. Below are some commonly asked questions regarding food distribution companies.
How Does Food Distribution Work?
The main role of food distribution companies is to act as intermediaries between producers and food service businesses or retailers. Food distributors purchase goods from growers, farms, and manufacturers of different food products. These goods are then stored in optimal conditions in order to preserve their shelf life. They are then distributed to restaurants, grocery stores, and other businesses that need various food products. Efficiency is very important in food distribution as it allows suppliers to reduce the time products stay in their warehouses, increase their revenue, and improve their margins which are traditionally low in this niche market.
How Many Food Distributors Are There in the USA?
According to industry estimates, there are more than 27,400 food distribution companies in the US. The majority of these businesses focus on a specific sector like produce or meat. However, there are thousands of broadline distributors that offer a wide selection of products either nationally or locally.
Some suppliers choose to focus on bulk deliveries for retailers such as convenience and grocery stores. Others prefer to work primarily with food service businesses like restaurants, cafes, or the hotel industry. Check out our post on wholesale food suppliers for restaurants.
What Is the Food Supply Chain?
The food supply chain consists of multiple stages of growing, producing, and distributing food.
- Food production. At this stage, food is manufactured by companies or grown by farms.
- Handling and storage. After it is produced, food is then handled and stored. For some products like vegetables that period can be longer, for others, it's either very short or non-existent.
- Packaging and processing. Most types of food are packaged in some way. This stage of the food supply chain usually takes place right after production. Sometimes food is packaged after its distribution. That’s especially true for large retail chains that have their own packaging capabilities.
- Distribution. After processing, food is delivered to businesses. They can either resell it retail to customers or add additional value to it. For example, restaurants add value by cooking meals and offering a niche experience for their clients.
BlueCart: The One-Stop Platform for Food Distribution Companies
Thanks to platforms like BlueCart, businesses can easily order in bulk from wholesale suppliers. That’s why our solutions are used by thousands of restaurants, cafes, grocery stores, and other businesses that purchase from wholesalers. BlueCart also has multiple solutions for distributors. Thanks to the platform, they can increase wholesale sales and streamline their processes. Schedule your free demo and find out how BlueCart can assist your wholesale business today.