• Advertise
  • Contact Us
  • Supplier Directory
  • SCB YouTube
  • About Us
  • Login
  • Subscribe
  • Logout
  • My Profile
  • LOGISTICS
    • Air Cargo
    • All Logistics
    • Facility Location Planning
    • Freight Forwarding/Customs Brokerage
    • Global Gateways
    • Global Logistics
    • Last Mile Delivery
    • Logistics Outsourcing
    • LTL/Truckload Services
    • Ocean Transportation
    • Parcel & Express
    • Rail & Intermodal
    • Reverse Logistics
    • Service Parts Management
    • Transportation & Distribution
  • TECHNOLOGY
    • All Technology
    • Artificial Intelligence
    • Cloud & On-Demand Systems
    • Data Management (Big Data/IoT/Blockchain)
    • ERP & Enterprise Systems
    • Forecasting & Demand Planning
    • Global Trade Management
    • Inventory Planning/ Optimization
    • Product Lifecycle Management
    • Robotics
    • Sales & Operations Planning
    • SC Finance & Revenue Management
    • SC Planning & Optimization
    • Supply Chain Visibility
    • Transportation Management
  • GENERAL SCM
    • Business Strategy Alignment
    • Customer Relationship Management
    • Education & Professional Development
    • Global Supply Chain Management
    • Global Trade & Economics
    • Green Energy
    • HR & Labor Management
    • Quality & Metrics
    • Regulation & Compliance
    • Sourcing/Procurement/SRM
    • SC Security & Risk Mgmt
    • Supply Chains in Crisis
    • Sustainability & Corporate Social Responsibility
  • WAREHOUSING
    • All Warehouse Services
    • Conveyors & Sortation
    • Lift Trucks & AGVs
    • Order Management & Fulfillment
    • Packaging
    • RFID, Barcode, Mobility & Voice
    • Warehouse Automation
    • Warehouse Management Systems
  • INDUSTRIES
    • Aerospace & Defense
    • Apparel
    • Automotive
    • Chemicals & Energy
    • Consumer Packaged Goods
    • E-Commerce/Omni-Channel
    • Food & Beverage
    • Healthcare
    • High-Tech/Electronics
    • Industrial Manufacturing
    • Pharmaceutical/Biotech
    • Retail
  • THINK TANK
  • WEBINARS
    • On-Demand Webinars
    • Upcoming Webinars
    • Webinar Library
  • PODCASTS
  • WHITEPAPERS
  • VIDEOS
Home » Caught in the Middle: U.S. Food Service Distributors Search for Ways to Cut Costs and Enhance Offerings

Caught in the Middle: U.S. Food Service Distributors Search for Ways to Cut Costs and Enhance Offerings

March 27, 2009
Global Logistics & Supply Chain Strategies

The U.S. food service distribution industry is a $225bn business with a crucial role in producers' supply chains. Nevertheless, the sector is under fire like every other. Manufacturers are passing along a greater share of their commodity and production costs, while on the other end, restaurants are focusing on lower-priced items in answer to consumer demands. Add in new sources of competition, such as supermarkets and convenience stores, and the industry faces a slew of challenges in this difficult year. A recent analysis by West Monroe Partners LLC examines some of the trends that are shaping the industry. Bottom line: they must cut costs, improve productivity and increase competitiveness.

The business consists of three primary parts: broadline food service, representing a wide range of products from manufacturers; specialty, serving niche markets where extensive knowledge of the product is essential, and system distributors, whose customer base consists mostly of chain restaurants with centralized purchasing. Revenues for the industry as a whole declined by 3 percent in 2007, notes West Monroe, although broadline distributors have grown faster than the market as a whole. One of the industry's biggest challenges is the recent decline in consumer confidence, possibly leading to a reversal of the trend toward higher spending on food away from home. "Some major industry players have witnessed double-digit declines in gross profit margin over the past several years," the firm says.

The industry is responding to these trends on multiple fronts. Food service distributors are refocusing their product and branding strategies to confront the new breed of competition, which offers prepared food in a retail setting as an alternative to dining out. They are exploring concepts built around lower-priced items, such as less-expensive cuts of meat and seasonal produce. They are investing in systems technology to boost the efficiency of their supply chains. Perhaps the most promising source of improvement, according to West Monroe, lies with labor. Its recommendations include elimination of indirect activities that are often the product of inefficient processes, application of engineered labor standards, training of managers at all levels to direct the workforce, training of employees to work in an optimal fashion, implementation of pay or incentives for performance, and rationalization of SKUs. That last step can lower inventory costs, shorten pick paths and boost worker productivity, West Monroe said.

Visit www.westmonroepartners.com

    RELATED CONTENT

    RELATED VIDEOS

    Global Trade Management Inventory Planning/ Optimization Supply Chain Planning & Optimization Supply Chain Finance & Revenue Management Food & Beverage Pharmaceutical/Biotech
    KEYWORDS Food and Beverage Global Trade Management Inventory Planning/ Optimization Pharmaceutical/Biotech SC Finance & Revenue Management SC Planning & Optimization
    • Related Articles

      Inventory Optimization Is a Delicate Balancing Act to Cut Costs Yet Keep Service Levels Up

      Retailers, Grocers, Restaurants 'Miss Major Opportunities' to Cut Costs and Improve the Bottom Line

      Hackett Cites Globalization as Driver for Bid by Business to Cut Costs, Boost Agility

    Global Logistics & Supply Chain Strategies

    Transplace Helps Del Monte Streamline Network

    More from this author

    Subscribe to our Daily Newsletter!

    Timely, incisive articles delivered directly to your inbox.

    Featured Product

    Popular Stories

    • A TRUCK WITH ITS CONTAINER DOOR OPEN SITS UNDER A SIGN THAT READS INTERNATIONAL BORDER COMMERCIAL TRUCKS

      Importers Into Mexico Can No Longer Delay Complying With New Customs Declaration Law

      Data Management (Big Data/IoT/Blockchain)
    • 018_how_3pls_can_get_started_with_ai_v1-(540p).png

      Watch: How 3PLs Can Get Started With Automation

      Logistics Outsourcing
    • An employee in a warm suit crouches down to get boxes of food ready for shipping at a warehouse

      Packaging Optimization Is Boosting Cold Chain Growth

      Air Cargo
    • A FIGURE IN CAMOUFLAGE LOOKS THROUGH A SCOPING DEVICE AT A SHIP IN THE DISTANCE, BELCHING SMOKE

      Strait of Hormuz Ship Transits Are Rising Thanks to U.S. Help

      Global Gateways
    • Heat Haze Distorts Video of Semi-Trucks Driving Down an Interstate Surrounded by Mountains on a Sunny Day

      The Biggest Challenges Facing Logistics Operators This Summer

      Logistics

    Digital Edition

    2026 esg cover main scb q2 2026 cover

    SupplyChainBrain 2026 ESG Guide: ESG — The Supply Chain’s Biggest Secret

    VIEW THE LATEST ISSUE

    Case Studies

    • Recycled Tagging Fasteners: Small Changes Make a Big Impact

    • A GRAPHIC SHOWING MULTIPLE FORMS OF SHIPPING, WITH A HUMAN STANDING AT THE CENTER, TOUCHING A SYMBOLIC MAP OF THE WORLD

      Enhancing High-Value Electronics Shipment Security with Tive's Real-Time Tracking

    • A GRAPHIC OF INTERLACING HONEYCOMBED ELEMENTS REPRESENTING GLOBAL BUSINESS TRANSACTIONS

      Moving Robots Site-to-Site

    • JLL Finds Perfect Warehouse Location, Leading to $15M Grant for Startup

    • Robots Speed Fulfillment to Help Apparel Company Scale for Growth

    Visit Our Sponsors

    4flow Arkieva Blue Yonder
    Carton Cloud CoEnterprise Dassault
    Duravant E2Open General Logistics Systems
    Hy-Tek iGPS Korber
    Lyngsoe Procurability Quinyx
    SAP Sikick Systech
    S&P Global Mobility TADA TransImpact
    US Bank Werner Enterprises WSI
    • More From SCB
      • Featured Content
      • Video Library
      • Think Tank Blog
      • SupplyChainBrain Podcast
      • Whitepapers
      • On-Demand Webinars
      • Upcoming Webinars
    • Digital Offerings
      • Digital Issue
      • Subscribe
      • Manage Email Preferences
      • Newsletters
    • Resources
      • Events Calendar
      • 2026 Event Coverage
      • SCB's Great Supply Chain Partners
      • Supplier Directory
      • Case Study Showcase
      • Supply Chain Innovation Awards
      • 100 Great Partners Form
    • SCB Corporate
      • Advertise on SCB.COM
      • About Us
      • Privacy Policy
      • Contact Us
      • Data Sharing Opt-Out

    All content copyright ©2026 Keller International Publishing Corp All rights reserved. No reproduction, transmission or display is permitted without the written permissions of Keller International Publishing Corp

    Design, CMS, Hosting & Web Development :: ePublishing