Food wholesaling, according to the U.S. Department of Agriculture, consists of that part of food marketing in which goods are assembled, stored, and transported to customers, including retailers, foodservice operators, wholesalers, government, and other types of businesses. Wholesale markets for farmers could be the grocery store, the foodservice operators of an institution or a hospital, for instance, or to a distributor or a broker.
Wholesale markets have different needs and requirements.
- They generally require higher quantities of product than other markets, and require more planning, negotiating and specificity.
- A consistent product is extremely important.
- Packaging and transportation are important considerations when dealing with wholesale markets, as is having a reliable, steady source of product.
- With seasonality of products in the food production business, working directly with the chef or the foodservice buyer can help determine quantities and delivery schedules.
- A contingency plan is important when dealing with wholesalers because issues such as crop failures or weather factors need to be addressed prior to the growing season.
There are brokers and agents who will market your products for a fee. Also, there are specialty distributors, those that sell into specific markets, such as natural or gourmet retailers. Additionally, a produce auction may be an alternative for marketing larger quantities of products. There are several produce auctions around the country that move more product, but generally for a lower profit margin per unit.
Internet sales are also a way to sell products directly to the consumer. Getting product to the buyer can be problematic; however, as the Internet reaches a worldwide audience and shipping perishable products long distances could present several quality concerns.
Institutions and Schools are one form of the foodservice industry that is worth examining. The foodservice industry is growing and is a $1.02 trillion food buyer. More and more people are buying food prepared away from home and eating fewer meals prepared at home. Fast food is the most rapidly expanding segment of the food away from home market, with fast food now available at more nontraditional locations, such as inside big box department stores and in airports and colleges, for instance.
With a struggling economy, changes in consumer eating and food preparation might cause more at-home food consumption, but as fewer people are experienced at cooking, the art of preparing a home cooked meal is becoming a lost art. If food is prepared at home, it is often from frozen or pre-processed state. Cooking food from “scratch” or from the raw form is something that lower-income households are especially doing less. Providing low cost, healthy alternatives for people on fixed incomes and for those on food subsidy programs is a concern for federal agencies and those working with those in poverty.
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