In anticipation of The Packer’s 125th-anniversary issue, we have enjoyed publishing past anniversary articles from the Century of Produce and also posted industry columns for the 125th-anniversary edition.
In this space, I have also been revealing the results of an industry survey connected with the 125th-anniversary edition.
Check out some of the links:
Today the industry survey question was this:
How will the role of wholesale markets/wholesalers evolve in the next 25 years?
Here are answers from the industry survey:
- The wholesale market will be much more value-added driven;
- They will diminish;
- Will become more value-added oriented beyond just holding inventory locally for their customers for staple items. Will prove their value by becoming local source (having inventory) of “specialty” items that will multiply as USA becomes more multi-ethnic and those different cuisines become more popular;
- Gapping supply line;
- I know it was once thought that wholesalers and wholesale marketers could be a thing of the past, but they continue to show their worth every year and many are quite prosperous. As the population continues to grow, these types of business fill a huge need by being able to supply multiple products, sizes, merchandising and more to specific regions - and are able to do on scales both large and small. The terminal markets would be the ideal candidates for large retail chains distribution centers. This would be a great partnership. The retailers get very knowledgeable produce people, something they are lacking and wholesalers get increased traffic and there could be cost savings for both;
- It feels to be a dying factor;
- There will always be a need. Those wholesalers that are able to adapt with the next big curves will survive;
- There will always be a place for wholesalers, as it makes business sense for retailers to always “buy short” and have the ability to fill in with a local supplier;
- They will become more and more like growers/shippers, offering long term pricing, giving out ad items etc. Just in time deliveries will be important to buyers who are being evaluated on turns. Smaller cities will see what has happened to retailers, extreme consolidation with only two big companies surviving will the door open for the smaller niche providers;
- Their role will be reduced as customers seek more and more local/organic produce, year-round. Starting with BrightFarms, etc.;
- Less terminal markets and more direct purchasing from shippers or through buying groups;
- I see this segment as surviving through brand development...buying and reselling is not enough. There needs to be an identity that they’re customers can trust in and stand by, otherwise they are only buying a commodity which is easily devalued in the marketplace;
- They will be gone, they almost are already, there won’t be much space left for them in continuing improvement of supply chains, and delivery mechanisms;
- No business group is more adaptable than wholesalers, especially “terminal” markets. They will ID the trends and capitalize on them as they have been doing for decades;
- Individuals and companies would be identified as bundles of commodities and would be marketed to as such according to their perceived budget constraint/ability to pay. An effort toward responsibility shopping and social responsibility, waste reduction, health, and climate change;
- Probably be less of a need for them;
- Look at the Philly Market. Each Wholesaler has it’s own Supermarket connection Hunts Point has all of the ethnic stores;
- Focus more on inventory care, storage and turns;
- Will have to be more conscious of food safety;
- More and more consolidation of the wholesale industry due to costs will force the larger retailers to become their own wholesalers to ensure supply and control cost. This will unfortunately drive smaller wholesalers out of business;
- Adoption of improved technology for quality improvements and risk management;
- Less important- most retailers and food service companies want to go direct when ever possible.
- They will further consolidate;
- They will need to continue to be problem solvers and find ways to stay relevant and valuable. True category management and innovative merchandising concepts for their customers.
TK: Many of the survey responses noted the resiliency of wholesalers and terminal markets. They will adapt and adjust, turn to more value-added, local sourcing, brand development and so on. At the same time, the forces of consolidation continue to bear down on the segment; without responsive change to market forces, the path ahead will be stoney.