In part 1 of this month’s series, we reviewed how food travels from the farm to processing and then manufacturing plants. In the second part of our 2-part series we’ll outline the final stage of the journey of food from farm to table. Whether it involves farmers going directly to consumers, or through distributors, wholesalers, and retailers, commercially grown food is destined to eventually end up in the hands of the consumer.
Here's just a brief overview of some of the different path's food undertakes on its journey to consumers.
Perhaps the simplest method of getting food from the farm to consumers, the direct-to-consumer method is exactly as it sounds. It’s direct to consumers. This method eliminates the need for 3rd parties to get involved in both the distribution and retailing processes, thus reducing the cost of overheads. Although, this process can sometimes prove inconvenient for both parties as either one must travel to the other. An issue that has inspired innovative changes, most notably with the introduction of automated technologies. Convenience is key, customers are demanding it, and brands like Pepsi, Nestle, and Kraft's Heinz are turning to e-commerce as a way of meeting these new demands.
Role of distributors
For food products that aren’t sold directly to consumers, distributors play an important role in ensuring products are transported to the consumers. Whether it’s regionally, nationally, or internationally, food distributors will work with manufacturers to distribute their products to wholesalers and retailers. This often means distributors will have close relationships with manufacturers and have exclusive buying rights that cover specific territories as without distributors, manufacturers would struggle getting their products to customers. They will also act as the main contact for prospective buyers but will only engage with retailers on very rare occasions.
However, as overhead costs continue to rise, distributors are facing new challenges in conducting business. Challenges that create questions as to how a cost-reducing part of the food supply chain process will reduce costs themselves. The adoption of automation systems to improve process efficiencies is on trend with the global digital revolution currently occurring. And as the future of supply chains lies in an automated, data-driven environment, distributors should look to embrace this as the way forward.
Distribution through wholesalers
In most cases of food distribution, a wholesaler will be involved within the process and act as a crucial part within the process. Wholesalers are responsible for purchasing multiple products from distributors in high purchase volumes and either selling onto consumers, or to retailers. They will also purchase multiple products from multiple manufacturers, which then get purchased by retailers for final distribution to consumers.