Businesses in the food and beverage industry deal with different distributors as part of the supply chain. These include snack food distributors that sell wholesale snack food and products to retailers.
Snack food is one of the food trends that is gaining traction which makes it a hot market for entrepreneurs to target. In order to get into the snack food distribution business and be successful at it, you’ll need to learn about the industry. Apart from this, you will also need startup capital.
As a business owner, you want to start your small business with low overhead expenses and high-profit potential. Getting into the snack food wholesale business is just what you need and this blog explains how to get started.
Snack Food Distribution Meaning
Snack food distribution refers to the process of purchasing and distributing snack products to customers for a profit. In other words, you purchase wholesale products, such as bulk candy, and supply them to customers or a specific business.
Key Takeaway: Before starting a snack food distribution business, you have to consider many things like your financial plan, customer acquisition strategy, niche market, and distribution channels.
Many stores and businesses stock snack foods which makes the demand for snack food distribution high. These businesses include:
- Convenience stores
- Grocery stores
- Drugstores and pharmacies
- Coffee shops
- Movie theaters
- Gas stations
- Arcade and entertainment centers such as bowling alleys and roller rinks
- Vending machines
Starting a Snack Foods Distribution Business
As a snack food distributor, you rely on the relationships you have with wholesale snack distributors. You act as the middleman between the wholesalers and the retailers.
Before you get your business up and running, you have to consider your niche market and the companies within that niche. You will represent these companies which is why it’s important to do your research.
It’s possible for these companies to sell healthy snacks, wholesale candy, or a combination of the two. Once you decide the kind of snack you want to distribute, you can start working on building your relationship with a wholesaler.
As a snack food distributor, you should have:
- A reliable way to transport your snack food and products to the buyers
- Secure warehousing or storage space for your inventory
In terms of storage space, you can start off storing items in your home, or you can choose to rent a warehouse or self-storage facility. Be sure to have a good inventory management process in place. You may even consider utilizing warehouse inventory management software.
When dealing with food, you want to be sure that the place you store your snack food inventory is climate controlled and out of direct sunlight. This is because strong UV rays and heat can negatively affect your snacks. This is crucial to know for the wholesale chocolate and candy shipping process.
Choosing a Snack Food Niche
If you’re looking into how to run a wholesale distribution business, chances are that you know you need to first choose a niche. Picking a niche will help you work towards business success.
This is possible because it allows you to connect with customers that want your product instead of trying to sell your product to the general market. You can choose a single niche or multiple target markets. However, it’s important to link each niche with your customer acquisition strategy.
For example, say you want to become a wholesale ice cream distributor. This will narrow your market to businesses that can properly store ice cream. These include grocery stores and gas stations.
In terms of competition, you’ll compete against other wholesale ice cream distributors. To stand out from the competition, you may consider investing in transportation that allows for proper cold storage and transport.
Regardless of the niche you choose, it’s important to narrow down your ideal customer base. This will allow you to focus on your niche and appealing to their wants, needs, and values.
For example, if you choose to focus on healthy snack food products such as gourmet popcorn, you may look to ensure that your products have eco-friendly packaging. The packaging coincides with your niche, brand, and customer values.
3 Snack Food Distribution Channels
When starting a snack food business, one of the things you have to consider is your distribution channel. This is how you will be able to get your products into stores and to your customers.
As a snack food distribution business, you also have the option to be your own sales representative. By doing this, you can sell to customers in your area such as independent grocery stores, schools, gas stations, and convenience stores.
Here are 3 snack food distribution channels to consider for your business:
1. Chain Stores
Most chain stores will get their supplies from central warehouses. To start distributing your snack food products to large customers like chain stores, you have to contact their central buying office.
Be mindful of the products these chain stores sell. For example, if you sell healthy snack foods, you may find that large stores that have similar health-conscious values will have interest in your products. These include those that sell low-sugar, organic, and gluten-free products.
2. Small Retail
A great way to get your products into small retail stores is to supply them with things they need, such as a display case for your products. This is because not all small brick and mortar stores have enough display cases or freezers for their products.
Coca-Cola used this strategy in their early years by supplying stores with Coca-Cola branded refrigerators and vending machines. Consider also incorporating your branding to the display cases to differentiate your product from the rest.
3. Vending Machines
You may consider suppling vending machines with your products instead of full-service stores. This is a great way for offices, stores, and event venues to earn extra money on the side.
It’s possible for you to own the vending machines and do all the restocking on your own. On the other hand, you can also consider renting the space from the venue and splitting revenues.
Frequently Asked Questions About Snack Food Wholesale
Before you dive into the snack food distribution business, you need to write a business plan outlining each aspect of your business. This will allow you to consider your financials, loan eligibility, product, customer acquisition, and customer retention strategies.
Be sure to also consider the following commonly asked questions about snack food wholesale businesses:
How Big Is the Snack Food Industry?
The snack food industry is valued at $43.6 billion as of 2022. It’s expected for the industry to increase by 1.5% by the end of 2022. This is what makes the snack food industry a profitable one.
What Does the Snack Food Market Consist Of?
The snack food market consists of both manufacturers and suppliers. The companies create products such as potato chips, fruit snacks, peanuts, cakes, candy, cookies, and dried meat products. Snack foods will vary depending on each country.
When Did Snacks Become Popular?
In the United States, snacks became popular between 1950 and 2000. Manufacturers began to introduce prepackaged snacks as a way for consumers to cater to their cravings for salt, sugar, and fat. By the 1980s, people were consuming snacks at school, work, and home.