Large companies include SYSCO, Nash Finch, and US Foodservice. Most companies in the industry have annual sales under $50 million. The industry is moderately concentrated. The 50 largest distributors hold about 50 percent of the total market.

COMPETITIVE LANDSCAPE

Industry demand changes due to shifting consumer tastes, but is limited overall by the 1 percent annual growth of the US population. The profitability of individual companies depends on good merchandising, and efficient operations. Large distributors have a cost advantage by purchasing in bulk, but also need to operate a more complicated distribution network. Smaller companies can compete effectively by specializing in products or geographical areas. Many small companies have exclusive distribution rights to imported specialty goods.

PRODUCTS, OPERATIONS & TECHNOLOGY

The industry sells frozen foods, dairy, poultry, fish, meat, fresh produce, baked goods, processed and prepared foods, and related items. Only about 150 large companies deal in a broad line of food products, while the others specialize.

Operations revolve around the logistics of getting food items from thousands of food producers to thousands of customers. Some distributors operate only locally (such as milk distributors). Many distributors receive products from all over the country but distribute only regionally.

Typically, distributors consolidate shipments from suppliers at regional warehouses and make daily deliveries to customers using a fleet of trucks.