Working with Food Distributors

Working with food distributors can transform how quickly a food or drink brand grows — but only if you understand what distributors actually do, and don’t do, for you. In this webinar, Jo Densley of Relish Marketing covers the role of distributors, the costs and benefits of working with them, what they expect from producers, and how to choose the right one for your brand.

Key Takeaways:

• Distributors buy in bulk, store product, and fulfil orders from their client base — but they don’t actively sell your product for you, so growth still depends on your own sales and marketing effort.
• On top of a typical 40% retailer margin, distributors usually require a further 25–30%, so this needs to be built into product costings from the outset.
• Many distributors also charge listing fees or require promotional spend, such as catalogue adverts costing around £500 each, which is worth treating as a marketing cost rather than a hidden charge.
• Working with a distributor gives access to stores and outlets — including major names like Planet Organic and Whole Foods — that only buy through distributors and won’t order directly.
• Distributor terms typically include minimum monthly sales targets and minimum shelf-life requirements, and stock can be returned if these aren’t met.
• Most distributors won’t disclose which stores they’re selling into, so founders should expect limited visibility over where their product ends up.
• It’s best to get one distributor relationship working well before taking on more, since long payment terms and the ongoing work required to support each account can strain cash flow and capacity.

Notable Quotes:

• “It’s all about a partnership to make it work.”
• “Getting the listing with a distributor is only the very start of the work.”
• “All the costings have to align.”

FAQs:

• What margin do food distributors take? Distributors typically require a further 25–30% on top of the usual 40% retailer margin, plus additional costs such as listing fees or promotional support.
• Do distributors market your product for you? No — distributors generally only promote products through their catalogue, so founders still need to invest in their own marketing and brand awareness.
• How many distributors should a food brand work with? There’s no fixed rule, but it’s best to focus on making one distributor relationship work well before taking on more, particularly in the early stages.

Next Steps:

If you’d like help working out whether your business is ready for a distributor, or choosing the right one for your brand, get in touch with the team at Relish today.