How Distribution Companies Work
Understanding food distribution, wholesale logistics, and the supply chain from manufacturer to retailer.
Published December 31, 2025 ET
What is a Distribution Company?
- TODO: middleman between manufacturers and retailers
- TODO: why they exist (economies of scale, logistics expertise)
- TODO: margin structures
The Food Distribution Industry
How It Works
- TODO: manufacturers sell to distributors
- TODO: distributors warehouse and deliver to retailers/restaurants
- TODO: the role of sales reps
Types of Food Distributors
- TODO: broadline distributors (Sysco, US Foods)
- TODO: specialty distributors (produce, seafood, ethnic foods)
- TODO: cash-and-carry (Restaurant Depot)
Bulk vs Break-Bulk
Bulk Shipping
- TODO: large quantities, single commodity
- TODO: typically raw materials (grain, oil, minerals)
- TODO: dedicated vessels/containers
Break-Bulk
- TODO: goods loaded individually (not containerized)
- TODO: pallets, crates, bags
- TODO: more labor-intensive loading/unloading
Containerized Freight
- TODO: standardized shipping containers
- TODO: revolution in global trade
- TODO: intermodal transport
Wholesale Distributors
How They Operate
- TODO: buy in bulk, sell in smaller quantities
- TODO: minimum order requirements
- TODO: delivery schedules and routes
Margins and Pricing
- TODO: typical markup structures
- TODO: volume discounts
- TODO: payment terms
Case Study: UNFI (United Natural Foods)
- Largest publicly traded wholesale distributor of natural/organic foods
- TODO: company history
- TODO: acquisition of SuperValu
- TODO: how they serve retailers
UNFI-Owned Brands
- Woodstock Foods
- TODO: organic and natural products
- Source: Woodstock Foods
Industry Position
- TODO: competitors and market share
- TODO: challenges facing the business
Starting a Distribution Business
- TODO: licensing and permits
- TODO: warehouse requirements
- TODO: cold chain logistics
- TODO: fleet management
- TODO: software and inventory systems