Wholesale Food Distributor Business Plan and SWOT Analysis

Wholesale Food Distributor Business Plan, Marketing Plan, How To Guide, and Funding Directory

The Wholesale Food Distributor Business Plan and Business Development toolkit features 18 different documents that you can use for capital raising or general business planning purposes. Our product line also features comprehensive information regarding to how to start a Wholesale Food Distributor business. All business planning packages come with easy-to-use instructions so that you can reduce the time needed to create a professional business plan and presentation.

Your Business Planning Package will be immediately emailed to you after you make your purchase.

Product Specifications (please see images below):

  • Bank/Investor Ready
  • Complete Industry Research for the Industry
  • 3 Year Excel Financial Model
  • Business Plan (26 to 30 pages)
  • Marketing Plan (24 to 28 pages)
  • 425+ Page Funding Directory
  • PowerPoint Presentation
  • Loan Amortization and ROI Tools
  • Three SWOT Analysis Templates
  • How to Start a Business Guide
  • Easy to Use Instructions
  • All Documents Delivered in Word, Excel, and PowerPoint Format
  • Meets SBA Requirements

Wholesale food distributors are one of the most important businesses within the United States and with any country for that matter given that they are able to bridge the gap between farms, food processing businesses, slaughterhouses, and related food production businesses and their retailing counterparts. Most wholesale food distributors are large-scale businesses in most markets given the need to have a significant transportation apparatus in place so that the business can effectively acquire wholesale inventories from food production businesses with the intent to resell them to retailers at a specific price. The revenues associated with this type of industry are completely immune from negative changes in the economy given that people can continue to need to eat and that retailers are continually looking for new ways to acquire inventories of both produced food and dry goods very quickly. In some cases, a wholesale food distributor can start the business relatively inexpensively especially they focus on a specific niche product. In fact, this is way one of this is the way to many large-scale food distributors ultimately began their operations. By operating in a niche capacity – these businesses are able to fulfill a need that is often overlooked were on not done by much larger scale businesses. As such, for an entrepreneur that is looking to establish a new wholesale food distribution business this may be one of the quickest ways in which they can enter the market once the source a unique product that is in demand among the general public.

The barriers to entry for a new wholesale food distributor business are considered to be moderately high given the significant amount of licensure and capital that is required to start these businesses. Typically, the start of cost for this type of company ranges anywhere from $50,000 all the way to $1 million depending on whether or not that inventory is actually going to be taken legal possession of by the wholesale food distribution business. This is important to note because many wholesale food distributors will often acquire their inventories on a consignment basis from the food producer. Once the inventory is sold they will then pay the producer for the required products. In many cases, newer wholesale food distributor businesses will look to establish these credit focused relationships with food manufacturing and farm businesses so that they can keep a close watch on their cash flow as they expand their operations.

A wholesale food distributor business plan should be produced if the entrepreneur is looking to raise capital to start this type of business. Given the highly predictable nature of the revenues generated from food purchase orders – almost all financial institutions are willing to put up the necessary capital to a qualified entrepreneur that has experience in this field. It should be noted that many people are looking to enter this field will be required to make a capital injection of 10% to 20% of the total amount of money needed to get off the ground. The business plan presented to a funding source should have a three-year profit and loss statement, cash analysis, balance sheet, breakeven analysis, and business ratios page that features information regarding the anticipated financial results of the business. As it relates to the wholesale food distribution industry, annual revenues in each of the last five years has exceeded $550 billion. The industry employs more than 2 million people and has provided payrolls of $138 billion in each of the last five years. It is important to note that this business is expected to remain in lockstep with the general economy as it relates to industry revenue growth. Usually, the industry growth ranges anywhere from 2% to 4% depending on inflation given that food imports are highly subject to inflationary issues.

A wholesale food distributor SWOT analysis should be written in conjunction with the business plan, marketing plan, and other documentation that may be submitted to a third-party or a funding source. As it relates to strengths, wholesale food distributors are always able to generate a significant amount of revenue given that regardless of how the economy as people going to continue to go to the grocery store to buy food products. The gross margins generated are considered a moderate and typically range anywhere from 20% to 30% depending on the products being sold. Highly specialized niche products such as artesian food products typically carry higher gross margins given that there is not the same level of demand for these more expensive items. The barriers to entry, again, are considered to be moderate to moderately high depending on the initial scope and scale of the business.

For weaknesses, one of the major issues at these businesses face is that they need to continually and properly handle large volumes of food on a day-to-day basis. As such, an entrepreneur that operates within this industry needs to have a complete understanding of safe food handling techniques that are used on a large scale. There are also a significant number of underlying operating costs especially as it relates to storage and transportation of food products. As such, these businesses need to maintain fiscally sound procedures and protocols for each step of their operation in order to ensure that they can remain profitable and cash flow positive. Inventory spoilage is another risk that is associated by these businesses especially taking possession of the inventory before it is sold to a retailer.

For opportunities, these businesses often grow very aggressively by integrating new product lines into their wholesale food offerings. Additionally, these businesses can also expand by acquiring additional purchase order relationships with small to midsize grocery stores that are continually looking to source new products for customers. Once a business has obtained a certain size than they can then approach much larger chain grocery stores to fulfill significantly larger orders on behalf of customers.

Threats, there’s very little risk of automation regarding the wholesale food industry given that there are a number of people that are needed within the supply chain. One of the major threats that does impact the way the wholesale food distribution businesses operate is inflation. During times of rapid inflation and expansion of the monetary supply – the cost of food production and puts spikes significantly. As such, many large-scale wholesale food distributors need to have a plan of action in order to remedy these increases in price.

A wholesale food distributor marketing plan should be developed and integrated into all the other documentation as well. First, many entrepreneurs within this field already have a significant number of contacts among both food production businesses as well as retailers. It is somewhat difficult to get into this field if a person does not have the requisite experience and contacts necessary in order to acquire inventories and make sales at the onset of operations. As such, an entrepreneur that does have a significant amount of resources within this industry will be able to immediately market the business as a specialized wholesale food distributor once they determine which products will be sold by the business. Most importantly, prior to the onset of operations many of these businesses will hire independent sales agents that operate on a commission basis in order to secure purchase order relationships with retailers. Strong compensation packages should be provided to these agents given that they will be able to secure a very large purchase orders and come through on a weekly to monthly basis.

Furthermore as it relates to the acquisition of inventories, many wholesale food distributors will develop co-branding relationships with specialty food production businesses. This is important to note given that when a farm markets its products to the general public they will frequently refer purchase orders to a third-party agent like a wholesale distribution business. As such, by maintaining these very close relationships with farming businesses, organic farms, small slaughterhouses, and related specialized product manufacturers – a wholesale food distribution business can effectively become very much in demand among retailers sourcing these products.

A wholesale food distribution website should be produced and can be somewhat moderate given that this is not a business that provides its products to the general public. This website should have information about the specialized food products carried, contact information, biographies of key personnel, and how to place wholesale purchase orders with the business. This website can be listed on among social media pages but is this is really not necessary given that most retailers do not source their inventories from businesses that market online. The wholesale distribution of food is very much a face-to-face business among people that have already existing relationships. This trend is not expected to sway anytime soon.

The continued demand for food ensures that wholesale distributors of these products are almost always able to generate a significant amount of revenues. While the gross margins do fluctuate from year to year depending on demand and depending on inflation – these businesses can almost always turn a profit provided the owner has an understanding of the specific needs of their retailers. The industry revenues are expected to increase, again, the near lockstep with the growth of the population and inflation.