Margin Squeeze and Globalization in the Food and Beverage Industry
Olin Thompson and PJ Jakovljevic - November 1, 2006

Fastidious Food Service Channel

Many food distributors act as commodity brokers, negotiating annual supply contracts for the major retail chains for a range of food products. Often, these are "private-label" products sourced from different growers or food processors around the world to guarantee supply year-round. The logistics planning and documentation must be precise if costs are to be kept under control. Furthermore, if the quality is sub-standard and the consignment is rejected, the food distributor has the prospect of replacing, re-labeling and disposing the product on a secondary market, which is almost surely a losing proposition...