Food Sales and Marketing Industry
Food Sales and Marketing industry, also know as the Food Brokerage industry,
began primarily from the need of food manufacturers to service grocery stores.
Food Brokers wrote orders in stores, rotated product for freshness, tagged
shelves for product reorders, collected damaged product, and ensured correct
Sales and Marketing companies contract with manufacturers, on a commissioned
basis, to essentially be their sales force. Presentations are made to direct
buying chains and wholesalers to order product. FS&M companies receive
orders from these customers and forward these orders to the manufacturers for
fulfillment. In the process they ensure correct pricing and track delivery.
Once delivered, the retail departments make store sales calls to effectively
pull the product from the warehouses into the stores, and the process begins
again. Key support services from the administrative department include
processing billbacks, clearing deductions, and processing customer contracts.
Marketing departments create fact based selling presentations and category
management departments create retail shelf location fact based selling
Food Sales & Marketing industry is experiencing the same challenges faced
in most industries today, consolidation, reductions in force, revenue shrink,
and constant change However, in spite of these challenges, the industry
remains strong, and the services provided are cost effective to the
manufacturers that employ this industry as a viable alternative to a direct
continue to be a complicated issue, having a three dimensional perspective.
Consolidations from manufacturers represented, from customers sold to, and
from Sales & Marketing Companies themselves, exemplify the necessity to
adapt. Cities that once supported around ten to fifteen separate Sales &
Marketing Companies, merged into Market representation, then into Regional
representation, and now National representation. Arguably, there are currently
only four companies National in scope. These "Mega Sales & Marketing
Companies" are aligning with Mega Manufacturers. This consolidation has
caused the resurgence of Regional companies to service small and mid-size
manufacturers that do not receive the attention they need, and pay for, to
grow their business within the framework of the Mega National companies.
within the industry and revenue shrink, driving the reductions in force. The
industry is notorious for accepting contracts where the cost of services
rendered exceeds the revenue paid. Complicating this issue, many manufacturers
continue to reduce commission rates as they consolidate markets. Primarily,
this is a challenge within the Mega National companies. The newly created
Regional companies, with few exceptions, are selective with who they
represent, being cognizant of service vs. revenue and credit risk.
are constant from both manufacturers and customers. A limited number of
manufacturers now seek hybrid services, with some directly employing Business
Development and Customer Managers while employing the Broker's Retail,
Administrative, and Order-Entry services. Others may not require Retail or
Marketing services. Obviously, menus of services and associated costs need to
be created to satisfy this demand. Customers national in scope are moving more
decision making from regional offices to corporate offices. Brokers need to
respond by establishing corporate contact. Especially vulnerable are regional
manufacturers that have little awareness at the corporate level.
future remains bright for those companies that continue to adapt and maintain
constant awareness of profitability and cash flow. Success will depend on
intimate local market knowledge, manufacturer awareness (defined as complete
understanding of their vision, mission, philosophy, specific goals, and brand
knowledge), effective administration, and a creative, optimistic go-to-market