For any food distribution business to be successful, it is essential that they are aware of the way the market around them is changing. Several different methods are used when it comes to distribution and you need to figure out where you fit in the picture. With the industry itself changing constantly, staying abreast of the latest and emerging trends will help you stay ahead of the game.
The biggest trend in food distribution is outsourcing. A lot of major brands are foregoing internal distribution in favour of outsourcing it to specialists. Not only does it grant them access to a highly experienced team of distributors, but it also removes a lot of capital and variable costs that they may bear by hiring a distribution team internally.
Mobile distributors are increasing in number to provide products to the areas where traditional channels are unable to reach. This usually covers remote areas, and a lot of new technologies are being used to reach those customers.
With online food ordering becoming a major part of the industry, the distribution services are also going online now. Customers are increasingly looking online for quick solutions and a lot of distribution companies are also setting up online operations to meet this new demand.
Tech is king
One of the most talked about things in food distribution, like any other sector, is the investment in technology. Companies are constantly trying to find ways in which they can make their distribution processes smarter and more efficient. There are a lot of new things coming into the spotlight, many of which are quite disruptive. For example, a particularly noticeable trend is the amount of investment happening in self driving trucks. Companies are also introducing AI in a lot of processes where humans were present previously, the biggest one being customer service and support.
Increased demand for variety
Customers are now asking brands for more and more variety and that is putting direct pressure on the distributors as well. The logistics are becoming much more complex and distribution companies are seeing demands that were previously unheard of before. For example, the different types of products coming from a single supplier who only had a single type of product previously means retrofitting the entire distribution process to deal with the specific requirements of each product.
With the competition expanding quickly and companies producing all kinds of products under the same roof, distribution for a niche product type is no longer a sustainable business model. Distribution companies are both modifying and expanding their fleets to provide transport for different food types. Staying in one type of product is no longer possible as every brand is demanding distribution for a range of unique products requiring different treatment.
Companies are pushing for bigger customer bases by providing better delivery times. Amazon has recently changed its two-day shipping for their Prime members to one-day shipping. This has also put a lot of pressure on all distribution companies to deliver products a lot faster. With an ever-demanding customer sitting at the other end, new transportation strategies and staffing schedules are being put in place to ensure consistently timely distribution.
With the recent changes in the way we live, the food distribution industry has developed quite rapidly. Being successful clearly means being ahead of the curve, whether it is through technology or exploring the new ways of targeting potential markets.