Redistribution, the practice of moving resources from manufacturers to distributors, emerged in the foodservice industry as a response to the challenge of providing specific quantities of food to businesses with different supply chain needs. The modern supply chain operates at a global level, with recent studies estimating that processed food in the United States travels over 1,300 miles, and fresh produce travels over 1,500 miles, before being consumed.
As food supply chains stretch across continents, connecting producers to consumers worldwide, more and more distributors are turning to redistributors to help simplify operations. In today’s complex food system, redistribution takes on a more nuanced and multifaceted approach for each segment of the supply chain: manufacturers, distributors, and operators.
Benefits of Foodservice Redistribution for Manufacturers
Manufacturers play a crucial role in bringing raw ingredients to ready-to-eat form. However, navigating the complexities of the foodservice industry, particularly when dealing with small, high-cost-to-serve customer orders, can be a daunting task. This is where foodservice redistribution steps in, offering manufacturers a range of benefits that can streamline operations, expand reach, and enhance profitability.
Outsourced Management of Small, High-Cost-to-Serve Customer Orders
One of the primary benefits of foodservice redistribution lies in its ability to outsource the management of small, high-cost-to-serve customer orders. These orders, often from smaller restaurants or cafes, can be time-consuming and expensive for manufacturers to handle directly through a distributor due to the fixed costs associated with order processing, delivery, and invoicing. Redistributors, like Honor Foods, possess the infrastructure and expertise to efficiently handle these smaller orders, reducing costs and improving overall efficiency for both manufacturers and their distributors.
Access to Additional “Unknown” Customers
Foodservice redistribution opens doors to a vast network of “unknown” customers, expanding manufacturers’ reach beyond their current customer base. Redistributors have established relationships with a wide range of foodservice distributors, who then have relationships with independent restaurants, cafeterias, institutions, and catering businesses. Through these connections, manufacturers gain access to new markets and potential customers that they may not have been able to reach on their own. This expanded reach can lead to increased sales, brand awareness, and market share.
Reduced Credit Risks
Credit risks are a significant concern for manufacturers, particularly when dealing with smaller, less established clients. Foodservice redistribution can mitigate these risks by providing manufacturers with access to the distributor’s creditworthiness. Honor Foods has established credit lines with their customers, reducing the financial risk for manufacturers.
Simplified Logistics
Foodservice redistribution simplifies logistics for manufacturers by consolidating orders and deliveries. Redistributors handle the collection, consolidation, and distribution of orders to their network of customers, eliminating the need for manufacturers to manage multiple deliveries to smaller establishments. This consolidation streamlines the logistics process, reduces transportation costs, and improves overall efficiency.
Additional Sales Support
Foodservice redistribution provides manufacturers with additional sales support, particularly in areas where they may not have a direct sales presence. Honor Foods employs a Team of sales representatives who are knowledgeable about the local East Coast market. These sales reps can act as an extension of the manufacturer’s sales team, providing market insights, generating leads, and closing deals. This additional support can significantly boost sales and expand market share in new regions.
Advantages of Foodservice Redistribution for Distributors
Distributors play a pivotal role in connecting manufacturers to their customers, ensuring a seamless flow of products from farms and factories to restaurants and institutions. However, navigating the complexities of managing multiple manufacturer relationships, handling diverse order sizes, and maintaining efficient logistics can be a challenging task. This is where foodservice redistribution emerges as a game-changer, offering distributors numerous benefits that can enhance their operations, optimize efficiency, and boost profitability.
Faster Turns
Foodservice redistribution accelerates product turnover for distributors, leading to faster inventory cycles and improved cash flow. Redistributors handle the collection and consolidation of products from multiple manufacturers, allowing distributors to place larger orders, receive more frequent deliveries, and maintain fresher inventory. This faster turnover reduces the risk of spoilage and ensures that distributors are constantly supplying their customers with the freshest products available. Additionally, the consolidated deliveries streamline the receiving process, saving distributors time and labor costs.
Shorter Lead Times
Redistribution also shortens lead times for distributors, enabling them to respond promptly to customer needs and maintain a competitive edge. By outsourcing the procurement and consolidation of products from multiple manufacturers, distributors can reduce the time it takes to fulfill customer orders. This reduction in lead times improves customer satisfaction and loyalty, as distributors can consistently deliver the products their customers need when they need them. Moreover, shorter lead times allow distributors to better manage their inventory levels and minimize the risk of stockouts.
Weekly Deliveries
Foodservice redistribution provides distributors with the flexibility of weekly deliveries, optimizing their inventory management and reducing storage costs. Redistributors typically offer weekly delivery schedules, aligning with the frequency of customer orders and allowing distributors to maintain fresh inventory without overstocking. This weekly delivery schedule eliminates the need for distributors to manage multiple deliveries from various manufacturers, streamlining their logistics and reducing transportation costs. Additionally, it allows distributors to maintain just-in-time inventory levels, minimizing storage space requirements and associated expenses.
No Minimums per Manufacturer
Redistribution, also referred to as Redi, eliminates minimum order requirements per manufacturer, giving distributors the freedom to order only the quantities they need. This flexibility is particularly beneficial for distributors serving smaller establishments with lower order volumes. Without minimum order requirements, distributors can avoid the burden of overstocking or carrying excess inventory from specific manufacturers. This flexibility allows them to tailor their orders to meet the precise needs of their customers, reducing waste and improving overall efficiency.
Efficiency of One Order, One Delivery, and One Invoice for Multiple Manufacturers
Foodservice redistribution offers distributors the convenience of one order, one delivery, and one invoice for multiple manufacturers, streamlining their administrative processes and reducing operating costs. By consolidating orders and deliveries from various manufacturers, distributors can manage their inventory and fulfillment needs with a single point of contact.
The Rewards of Foodservice Redistribution for Operators
Operators face a constant challenge: balancing the need for fresh, high-quality ingredients with the realities of limited storage space, complex ordering processes, and unpredictable demand.
Greater Availability of Low Volume, Variable Demand, and Time-Sensitive Items
Operators can expand their access to a wider range of products, including low-volume, variable-demand, and time-sensitive items. These items, often challenging for operators to procure directly from distributors due to minimum order requirements or logistical complexities, become readily available through redistributors. This expanded access allows operators to experiment with new ingredients, cater to specific customer requests, and prepare seasonal dishes with less burden. Honor Foods ensures that these niche items are delivered promptly and in the quantities required, enabling operators to maintain operational efficiency and culinary versatility.
Streamlined Ordering and Delivery Processes
Redistributors handle the complexities of procurement, consolidation, and delivery. Redi streamlines ordering and delivery processes for distributors and their operators, saving everyone time and labor costs. By consolidating orders from multiple manufacturers into a single order, distributors can help operators eliminate the need to manage multiple invoices, coordinate deliveries, and track inventory levels for various suppliers.
Navigating the Nuances of Redistribution: Addressing Potential Concerns
Redistribution has emerged as a valuable tool for streamlining operations, reducing costs, and enhancing efficiency. However, like any business decision, redistribution comes with its own set of considerations. By understanding the potential challenges and proactively addressing them, foodservice businesses can maximize the benefits of redistribution while minimizing any potential drawbacks.
Adapting to a New Schedule
Transitioning to a redistribution model often involves adjusting to a new schedule for ordering and receiving products. This can initially lead to some growing pains as businesses adapt to the new routine. However, reputable redistributors like Honor Foods are committed to flexibility and work closely with clients to ensure a smooth transition.
Tracing Sourcing
Some redistributors may have difficulty tracing the sourcing of their products, making it challenging for foodservice businesses to ensure they are meeting their sustainability goals or adhering to specific sourcing requirements. Honor Foods, being owned by Burris Logistics, has invested heavily in technology to improve the process of tracing sourcing.
Misconceptions about Pricing
Some foodservice businesses may assume that they will not be able to receive the same pricing as they would if they were ordering directly from manufacturers. This is not always the case. Honor Foods has established relationships with manufacturers and can pass on incentives and discounts to its clients.
Potential for Hidden Fees
While redistribution can be a cost-effective solution, there is always the potential for hidden fees. It is crucial to choose a redistributor that is transparent and upfront about their pricing structure. Honor Foods is committed to transparency and will openly discuss any potential fees before entering into a partnership.
Effective Communication
Honor Foods makes it easy to maintain open communication. With over 52 dedicated Sales Team Members (27 at Honor Foods in Philadelphia, 18 at R.W. Zant in Los Angeles, CA, and eight at Sunny Morning in Orlando and Ft. Lauderdale, FL, you can talk to real people, ask questions, and ensure that you understand the terms of your agreement. Honor Foods values open communication and is always available to address any concerns or questions that their clients may have.
Redistribution offers a range of benefits for foodservice businesses, but it is important to be aware of the potential drawbacks and take steps to address them. By choosing a reputable redistributor like Honor Foods, foodservice businesses can minimize the challenges and maximize the advantages of this valuable business model.
Harnessing the Power of Redistribution with Honor Foods: A Strategic Advantage for Foodservice Businesses
In the ever-evolving landscape of the foodservice industry, efficiency, cost-effectiveness, and sustainability are paramount for businesses to thrive. Embracing redistribution as a strategic business practice can provide foodservice businesses with a competitive edge, enabling them to optimize their operations, reduce expenses, and enhance their sustainability efforts.
Partnering with a reputable redistributor like Honor Foods offers a number of advantages for foodservice businesses. A study done by foodlogistics.com reported that, “For chains that deal with less than truckload (LTL) shipments and frequent promotions programs, initial cost savings typically run 10 to 40 percent.” The study also confirmed that the QSR restaurant giants such as Burger King, Dairy Queen, Denny’s, A&W, Taco Bell and KFC, “have met the challenges of today’s tough economy through significant supply chain cost savings using redistribution.” Manufacturers, distributors and operators can position themselves for long-term success in the foodservice industry by partnering with Honor Foods.
