After months and months of toiling away creating a chocolate-chip version of your Grandma’s finest fruitcake recipe, you’ve successfully created the perfect treat that people can’t get enough of.
You’ve packaged it well, you’re in the local farmer’s markets, and you’ve even managed to persuade a few retailers to sell your product in grocery stores. Woohoo!
As your company grows, and success is upon you, expansion becomes your next priority. Then, you come to a fork in the road.
Should you a) expand through a distributor or b) continue to sell directly to retailers?
Both avenues present challenges and make distribution a worry for food manufacturers. National distributors like UNFI — or even regional distributors — often make unattainable product demands and charge high premiums, which crush small food manufacturers and small markets alike. All the while, many retailers prefer to operate through distributors due to logistical constraints and simplicity. After all, some retailers have up to 50,000 different SKUs in their store — they can’t keep track of thousands of different vendors.
This creates a balancing act for food manufacturers to maintain adequate margins while growing distribution channels for their businesses.
Fortunately, these two paths are not the only options that food manufacturers can take to grow their businesses: online food distribution is finally available!
It’s food distribution that connects manufacturers with retailers without the physical warehousing of food. In other words, it simplifies the middleman down to an online marketplace for retailers and transports any product directly from manufacturer to retailer.
Here’s how food manufacturers can benefit:
Cutting Costs:
Without expensive overhead from trucking and unnecessary warehousing, online distributors operate at a fraction of the cost. This allows manufacturers and retailers alike to to enjoy higher margins — without passing high markups to consumers.
New Buyers:
The additional exposure from an online distribution platform introduces a manufacturer’s products to more retailers, getting their product into the hands of more people.
Product Freshness:
Online food distribution allows products to move directly from manufacturers to retailers, enhancing product freshness and quality, which makes products more desirable.
Communication:
Software-enabled distribution improves communication between the manufacturer, distributor, and retailer, which leads to more product sales and less food waste.
Transportation Support:
Online distribution allows for efficient transportation of goods from manufacturer to retailer, increasing quality control for products so that they make it safely onto store shelves with minimal defects.
After experiencing the daunting challenge of traditional centralized distribution with our cookie company, we set out to make an online food distribution platform that would allow better food products to reach grocery stores more efficiently, saving manufacturers time and money, protecting product integrity.
To join our community of local food manufacturers and retailers, visit podfoods.co.
