Those who work in the food distribution industry understand how competitive the industry can be, especially when you add recent technological advancements to the mix. Digital transformation is taking the food distribution industry by storm, and technology will continue to drive food distribution for the foreseeable future. As with many industries today, the food distribution companies who take the most advantage of cutting-edge technologies are far more likely to disrupt the industry as a whole and reap the benefits of doing so.
The fragmentation of the industry
With over 16,500 businesses in operation and generating almost $3 billion in annual revenue, the food distribution industry is generally a fragmented market. This large number of organizations is partially due to a common desire among food service operators to purchase supplies from and do business with several different distributors. This way, food service operators (including restaurants, cafes, grocery stores, hospitals, schools, and more) reduce reliance on one single distributor and minimize their overall risk.
As a result of the sprawling nature of the industry, it’s difficult to say whether or not food distribution is, as a whole, where it needs to be in terms of technological advancements. Top distribution companies—such as Sysco—dominate the market with an astounding 41% of total industry presence, making smaller and mid-size organizations easily subject to acquisitions and mergers. These smaller organizations need to use available tools to tighten operations, reduce waste, and improve their place in the market in order to survive. By successfully utilizing the technologies available to them, these organizations can cement their place in an ever-changing market.
Technologies affecting the industry
As a result of ever-increasing demand, food distributors today have to operate faster than ever before. Food distributors everywhere have to match this pace with sufficient technological innovations in order to thrive. Virtual inventories are one such innovation that aim to streamline supply chains. By establishing inventory across a variety of locations, distributors can select the most appropriate location from which to dispatch food delivery from. This type of inventory helps deliver the fastest results, helping to move operations along with the speed they require.
Business evolution can also start on the warehouse floor. With the help of technologies such as monitoring sensors, companies can now track their stock much more effectively than in the past. Stock can be tracked at every stage of fulfillment, and some devices even allow businesses to automatically reorder supplies that are running low. For example, some sensors can measure temperature and humidity, as well as allow you to remotely control these conditions in order to prevent food from going bad. This tech helps see employee productivity, assess historical trends in your inventory, and prepare you for market fluctuations.
Predictive analytics are another essential tool for food distributors looking to evolve. Around the US, people are eating out now more than ever before, and by a large margin: people spend over 50% of their food costs on eating out, which is more than double what was spent in the 1950s. This growth isn’t limited to restaurants and eateries, however. Meal kits are worth almost double what they were a year ago, and grocery stores are seeing an average of over 40,000 more stocked items than they had just 30 years ago. Predictive analytics ensure you can successfully cut waste and streamline your supply chain, as well as deal with disruptions.
About Doral Food Distributors
As with many industries, it is predicted that technology will continue to drive the food distribution industry, making it more efficient than ever before. In the food distribution world, the benefits of using the latest technology are endless! Providing cutting-edge, modern foodservice solutions for convenience stores, mass merchants, drug stores, restaurants, and more, Doral Food Distributors is your choice for food distribution in the US and globally. We buy, sell, and deliver high-quality consumer products to locations across the country. Like a vibrant plate of food, there are a myriad of often overlooked elements that go into its creation. The experts at Doral Food Distributors make these elements an integral part of their work. We enhance the dining experience and keep our customers connected with us—every step of the way.
“How is Technology Driving Food Distributrion?” Impact Networking. 2020. https://www.impactmybiz.com/blog/food-distribution-technology/