Performance Food Competition
Now Viewing Performance Food's competition in: Food Distributors
Call Preparation Questions
Customers, Marketing, Pricing, Competition
Who are the company's customers? - Typical customers are food retailers and the foodservice industry.
How many types of customers does the company sell to? - Market specialists sell to a particular customer such as Chinese restaurants, system specialists to customers such as hotels, and broadline distributors to various customers.
How does the company market its products? - Major types of marketing include inviting retailers to attend "table-top" presentations at the distribution center, end-cap promotions, trade shows, and retailer discounts.
What are the company's sales channels? - Most food distributors have a sales force to look for new customers and sell new products to existing ones.
How well does the company work with its suppliers in marketing efforts? - Wholesalers must work closely with suppliers that invest heavily in advertising to ensure that stores are adequately supplied. Wholesalers may share in the cost of regional or local advertising with manufacturers.
How does the company evaluate and test new products? - Wholesalers often meet with manufacturer representatives and food brokers to evaluate new products.
What are the typical prices received by the company? - Prices to retail customers are typically quoted as market price plus fee and freight, with the fee varying according to quantity and other delivery characteristics. A typical wholesaler markup ranges from 20 to 40 percent, depending on the product.
Competitive Landscape
Demand is driven largely by demographic shifts, particularly trends in population and age, working women, race and ethnicity, household size, and levels of disposable income. The profitability of individual companies depends on a good product mix and efficient operations. Large distributors are advantaged by bulk purchasing and economies of scale in distribution. Smaller companies can compete effectively by specializing in organic, natural, or kosher products or focusing on a geographical area. Average annual revenue per worker for a typical company is $675,000.
Business Challenges
CRITICAL ISSUES
Large Customers Bypass Distributors - Large grocery chains, big-box retailers, and wholesale clubs can bypass distributors and deal directly with manufacturers. Wal-Mart and Costco receive about 30 percent of revenue from selling food. Large grocery retailers such as Kroger operate their own wholesale operations that serve their stores and sometimes those of other chains. SUPERVALU’s acquisition of grocery store Albertson’s has created a vertically integrated giant.
Competition from Manufacturers - Manufacturers often manage their own sales and stocking efforts through direct-store-delivery (DSD) programs. Increased food costs and a slowdown in supplier revenue have led to careful oversight of manufacturing expenditures. Some suppliers say that they can increase sales and lower distribution costs through self-distribution programs like DSD.
Industries Where Performance Food Competes
- Food
- Foodservice
- Foodservice Suppliers
- Foodservice
