Article | May 28, 2019

How Can Foodservice Distributors Keep Up With The Cheney Bros.?

Source: Oracle NetSuite

By John Bek, Segment Leader, NetSuite Food and Beverage

truck in the rain

The past few years have been active ones for the foodservice industry. In the most recent year alone, US Foods acquired All American Foods, F. Christiana and Toba Inc. Sysco got in on the game a year earlier, acquiring Brake Bros., North Star Seafood and Supplies on the Fly, while Cheney Bros. acquired Pate Dawson. For big companies like these, acquisitions are the main innovation strategy driving product portfolio growth. For smaller, midmarket distributors they represent something else entirely: a very real threat.

Midmarket distributors that for years were content to fight for a defined geography with similar-sized competitors are now finding their competitors are no longer so small. Suddenly, that family-owned broadliner down the road has the power of Sysco behind it and now has a vast array of resources to bring to the competition. Larger companies can negotiate preferred pricing, leverage giant supply chains and lean on significant IT investments to gain an advantage.

So what does that mean for small distributors? Far too many distributors have become complacent in the past decade, happy with their revenues and margins, leaning on technology solutions that were built before the internet even existed.