Wholesaling for the food service market

Selling your product for use in a grocery store deli or making the recipe of a restaurant for their chain stores may be a good wholesale option for your food business.

Selling wholesale to grocery stores is not always the right fit for a food manufacturer. Wholesaling to grocery stores requires multiple production runs and packaging, store delivery, putting your product on the shelf, taking expired product off the shelf, and strong promotion through in-store sampling. All of this takes a great deal of time, energy and a strong financial investment.

For some food manufacturers, selling wholesale to the food service industry may be a better fit than selling to grocery stores. The food service market can consist of restaurants and restaurant chains, prepared foods departments within grocery stores, institutions such as hospitals and colleges, state and federal agencies who have food service programs, relief organizations and non-profits, etc. As you consider whether this is a better option for your product, here are some points to reflect on.

If you plan to market your food product to the food service industry, what makes your food product unique from the other food service products? Perhaps your uniqueness is a new flavor, a totally new product that isn’t currently available that your product is gluten-free. If you truly do have a unique product, market this product to those in the food service industry that are a good fit for your product.

Consider what products you are able to make using your current kitchen, cold or dry storage capacity, equipment, skills and interests. Restaurant chains and perhaps others within the food service industry want a consistent food product in each store they own. To accomplish this, they often out-source directly to food manufacturers who will then use the restaurant’s recipe to supply them with a consistent food product. Recruiting co-manufacturing or private labeling options to restaurants and other food service clients might be another option to consider. Producing other companies’ products will not build a brand for you, but the amount of sales and re-orders might be worth of sacrifice.

Servings per package, the size of the package, and perhaps even the type of package will change based on the food service client. The food service industry expects that your products follow standard in weights and/or servings sizes so study the current standards for the product. With the growth in quantity of the food comes the requirement for a larger package. Consider the usual type of packaging within the industry as well as your clients need to determine what package you select. The nutrition label on the package will need to be adjusted to fit this new quantity/serving size as well.

Finally, how do your prices compare to similar products by other food service suppliers? You will not be able to compete with the prices of larger national or generic brands such as GFS or Sysco brands in the market at first. However, you will need to be comparable to other competitors to get your foot in the door with the food service industry.

Overall, stay determined, consistent with your product, and keep on the path to SUCCESS! Also see the article called Marketing your food product in the grocery store, published by Michigan State University Extension.

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