The food and beverage distribution channel in the US is
very complex. How? Many players are involved in the distribution system
including middlemen. They produce, manufacture, transport, market, distribute,
and sell every kind of food product you can think of.
Now, by the time a food product is placed on the shelf of
a grocery store, it has traveled through many routes and entered many hands.
Each of these channels must have accessed and evaluated the product to
determine its worth, genuineness, benefits and likely risks if any. Equally,
they have checked the price, quality, packaging, and distribution strategies.
By the time the end-user or consumer has finally purchased
the product, the manufacturer and every other person involved in the
distribution chain have accessed its viability and profitability as well as
determined its important value.
Producing, manufacturing, or creating a new product is the
first important step a manufacturer can take, but some of the many wonderful
products out there never leave the producer’s warehouse. By implication, not
every manufactured product enters the hands of the end-user. So, the major task
lies in the distribution or marketing of the product.
It is important to note that while some producers can
effectively sell their products directly to the end-user, many manufacturers
cannot succeed in this area without the contributory efforts of the middlemen.
This article seeks to highlight the key issues that challenge grocery distributors
as they distribute products to both retailers and the final consumers.
The
Product Distribution Channel
The distribution of goods especially grocery items passes
through various channels before it eventually reaches the consumer. Some
factors influence the distribution of a new food product to the consumer
including the manufacturer’s selling strategy, the type of product and retail
establishment involved, and the market.
Although some manufacturers sell their products directly
to the consumer through the farmer’s market, others use detailed distribution
channels that involve many distributors and brokers. The truth is that the majority
of the manufacturers do not have the time, patience, and the skills to market
their new product. Thus, using food distributors and brokers is the only way
out.
The traditional distribution channel for food products is
diverse and depends on some factors such as the type of food product, the
manufacturer, as well as the target markets. Also, getting UPC codes, product
packaging, and nutritional labeling are all the necessary requirements that
must be satisfied before a product can be distributed.
When grocery distributors engage in marketing a particular
product, the first step to take is to identify the product’s target market.
This involves finding the geographical region, markets, and consumers that will
buy the product.
Grocery distributors, retailers, and food brokers are in the
distribution for business and they are looking for food products that have the
highest potential of making large profits. Such products sell well, in enough
quantities, and are capable of covering fixed costs as well as generate enough
profit.
Retail store owners stock a lot of products that compete
for space. Then, grocery distributors strive very hard to deal with inventory
and space challenges. As such, they opt for food products that will perform
better than others in the market (most especially, the ones they are having in
their custody), having the potential to bring in more profit.
Food brokers, on the other hand, put in more money and
human resources just to promote new food items, making it a necessity for them
to look for products that can take care of these costs. At last, the grocery
distributor will sell the food products and connect with both brokers and
distributors for a long-term relationship.
The product marketed by food distributors has to be
attractive and interesting to the end-user before a distributor accepts it.
Difficulties
Encountered During Food Distribution
Distributors and marketers employ new technologies and
management tools in every year in food retailing and distribution. Their major
aim is to have an efficient and cost-effective distribution system. However,
food manufacturers who are not aware of these new technologies and management
practices might be left behind. Here are some of the distribution issues
characterizing the distribution process.
The technology issues we are looking at here include
software compatibility, the right packaging, labeling, etc. Some of the technologies
distributors apply in the food distribution business to reduce costs and
increase efficiency are electronic consumer response, electronic data
interchange, and radio frequency identification.
The movement of a food product is another difficulty faced
by distributors. Most of the food items are distributed via trucks, either
owned or maintained by the manufacturer or distributor. Maintaining efficiency
in the food distribution channel is the key to moving the food products through
and control damage of perishable products. This means that perishable food
items have to reach the consumers very fast with little handling charges.
The outbreak of diseases has made it mandatory for
manufacturers, distributors, and government agencies to be very careful in
handling food items to avoid contamination. Therefore, traceability tools and
equipment are now being used to maintain food safety and forestall any issues
relating to bioterrorism.
The packaging is one of the major concerns in food
distribution and storage. Many retailers and distributors stock products with
the right package shapes, this makes it compulsory for them to use the same
shelving and layouts in each of their stores. A bottle that is very tall may not
fit into the shelf. Still, a bottle that is very narrow or too short will
create an undesirable empty space on the shelf. Thus, the packaging – bottle,
box, jar, must have the same size and shape that will fit in the retailer’s
shelf.
Conclusion
It is quite difficult to distribute food products. A food
product can take many channels to reach the final consumer. It requires a lot
of resources, manpower, work, and tact to successfully distribute food items to
the retail customer. Therefore, the importance of grocery distributors cannot be
overemphasized here.
