Guide on Wholesale Grocery Store Distribution Companies

Distribution is an essential part of the food supply chain in the US. The majority of grocery stores partner with some of the biggest broadline food distributors. However, large grocery chains also develop their own distribution network. This allows them to do in-house product sourcing and partner directly with manufacturers. In fact, the largest brands also use private labeling services offered by big manufacturers. If you’re interested, check out our posts on Walmart’s private label and Target’s private label brands. This allows large retailers to skip grocery store distribution companies and increase their profit margins. However, smaller grocery stores rarely can allocate the large capital and resources needed to develop a full-scale product distribution network. As such, they often rely on grocery store distribution companies. In this post, we’ll share more about the operation of these broadline distributors and what are some of the top suppliers that specialize in distribution to grocery stores.

Key takeaway: Grocery store distribution companies are businesses that specialize in bulk deliveries of various products to retailers. Some grocery chains also have their own distribution network and handle logistics in-house. Smaller grocery stores might also use local distributors that specialize in one or more product categories.

What Are Grocery Store Distribution Companies

Wholesale suppliers sell products to a variety of businesses. From retailers to food service businesses, all companies need a reliable distributor of quality food products at wholesale prices. The largest grocery chains have well-developed distribution networks and a large number of distribution centers. As such, they rarely use the services of grocery store distribution companies. Smaller grocery stores and other retailers such as convenience and specialty stores are the main customers of these suppliers. The majority of these retailers use the services of large-scale distributors. That’s because these suppliers have a wide selection of high-demand products and can offer integration of various technological solutions. This can make the ordering process significantly easier and automate other tasks that are part of the distribution and logistics process.

Grocery Stores Working with Smaller Distributors

Mini grocery shops and smaller retailers might also partner with specialized distributors that focus on products in a single category. For example, a small grocery store might partner with wholesale meat distribution companies that focus primarily on sales of meat and seafood. The benefit of working with specialized distributors is that they might offer better quality products. Furthermore, smaller distributors are also more flexible in terms of MOQ (minimum order quantity), deliveries, and other factors. In recent years, it has become a major trend in the food sector to buy products locally. That’s why farmers’ markets attract a growing number of customers. As such, retailers can benefit if they partner with local distributors and producers.

How to Choose a Grocery Store Distribution Company

If you wish to find suppliers for your grocery store business, here are some factors to consider.

1. Prices. As profit margins in the sector are low, prices are among the main things business owners should take into consideration when choosing between grocery store distribution companies.
2. Terms and conditions. The biggest broadline distributors have a lot of leverage and negotiation power. As such, they might be less flexible or demand exclusivity from their customers.
3. Freshness and quality. The grocery retail industry deals primarily with perishable food products. Therefore, they need to buy wholesale products of high quality that are not only appealing to customers but also have as long shelf life as possible. That’s why some retailers might partner with local produce distributors in order to shorten the supply chain and reduce food waste.
4. Reliability. Grocery retailers are very dependent on their suppliers. Therefore, reliability is a large factor when considering different grocery store distribution companies. 
5. Technology. In addition to reliability, freshness, and affordability prices, businesses in the grocery niche market also search for suppliers that use modern technological solutions. This can allow them to integrate vendor-managed inventory (what is VMI) or automate the ordering process.

Top Grocery Store Distribution Companies in the US

1. Sysco. The company is the biggest broadline distributor in the world.
2. McLane Company. The company partners with many retailers and specializes in convenience stores.
3. KeHE Distributors. This business is known as one of the best grocery store distribution companies for organic and natural products.
4. US Foods. Although the company is known as a wholesale food supplier for restaurants, it also offers services to retailers.
5. C&S Wholesale Grocers. As its name suggests, the company specializes in distribution to grocery stores. 

There are multiple other grocery store distribution companies. Some partner with local chains while others specialize in certain fields (such as gourmet and specialty food suppliers). Retailers have the option to partner with a single broadliner or to use the services of different companies for different product categories. Modern food distribution channels and the well-developed food supply chain offer countless opportunities.

Frequently Asked Questions about Grocery Store Distribution Companies

Whether you wish to know how to open a grocery store or what is broadline distribution, you’ll find various useful articles on our website. Below we’ve shared the answers to some questions regarding US food distribution companies that specialize in grocery distribution.

What Are the Largest Grocery Store Chains in the US?

Walmart is the biggest grocery chain in the US. With more than 10,000 stores worldwide, a network of well-developed eCommerce websites, and over 2 million employees, Walmart is the country’s leader in the grocery industry. It’s important to note that large chains rarely use grocery store distribution companies. Instead, they manufacture a lot of the products offered and create their own network of manufacturers with whom they work directly. This allows them to improve their profit margins which are in the single digits in this sector. Here are other very large grocery store chains in America.

1. Costco;
2. Kroger;
3. Target;
4. Albertsons;
5. Whole Foods;
6. 7-Eleven; 

How Does Food Get to the Shop?

Food gets to the supermarket shelves through the food supply chains. It includes a couple of stages that often overlap and are not necessary for all types of food products. Let’s examine them.

1. Production. This stage can either include growing (for fruits, vegetables, and other agricultural products) or manufacturing;
2. Storage. After food is grown or produced, it is usually stored. Some food products go directly to the next stage of the food supply chain;
3. Processing and packaging. The next phase includes some type of processing or direct packaging of the products;
4. Distribution. After the food has been processed and packaged, it enters the transportation stage of the supply chain. It is distributed to grocery stores or other companies such as restaurant businesses.

What Are the Challenges of the Grocery Supply Chain?

There are multiple threats and challenges in the food supply chain. One of the biggest ones is related to high transportation costs. These costs can fluctuate substantially as they are very dependent on oil prices. Another problem that companies in the grocery supply chain face is related to food waste. Perishable goods such as vegetables and meat need to be handled with extreme care and under special conditions related to temperature and moisture. That’s why one of the trends in bulk deliveries of food is related to automation that’s aimed at speeding up the distribution of food.

BlueCart: The All-in-One Solution for Grocery Store Distribution Companies

Wholesalers that specialize in B2B sales to grocery stores need to stay up to date with the latest trends in the field. Thanks to our software, vendors can easily create online catalogs, update their products, and automate processes in their distribution business. Schedule a free demo right away in order to see how BlueCart’s solutions can help you increase wholesale sales and take your company to the next level.