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Distributor Types: Different Experts for Different Situations

By: Greg Seminara,Export Solutions
Topics: Food Distributor

All distributors are not created equally ! Most exporters recognize obvious differences based upon the size of distributor and breadth of service offering. Export Solutions has identified six common types of distributor business models. Global brands maintain a mix of distributor relationships. Some partnerships are new while others have evolved for thirty years or more. With time, requirements for servicing our industry have changed. Some distributors have remained generalists, handling many categories and channels. Others elected to focus against a specific market segment.  Which model delivers the best results for your brand ?
Distributor Types
Big Brand Distributors
Large distributors supply an economical alternative for leading brand manufacturers versus operating their own subsidiary. Normally, they cover many categories and offer tremendous critical mass. Big branbds work best with companies that invest in signifuicant marketing budgets. A potential issue is the struggle for attention among brands all vying for focus from one sales team.

Category Expert
Buyers value partners that serve as category experts who can share insights and innovation for the sector. Distributors dedicated to one sector provide logistics efficiencies and capability to share best practices from complimentary products. Managing product conflicts is a frequent problem with distributors concentrated on only one category.

Channel Expert
Many distributors built their business platform centered on servicing the supermarket channel.
Incremental growth today is dependent on penetrating under- served channels such as foodservice, small shops, or pharmacy. In larger countries, it's possible to maintain one organizational approach for supermarkets and then appoint a specialist for a different channel. Alternate channels normally feature smaller store footprints which can provide a barrier to entry for all but the leading brands.

Country Expert

Some distributors have created viable businesses as the source for brands from one country.
These distributors supply brands to consumers "homesick" for their favorite brands at a premium price.
A benefit with this option is the distributor can consolidate shipments from one country and is connected with the retailers and consumers for this "expat" segment. This approach works well for niche products or brands focused on availability without marketing investment.

Fine Food Importer
Food enthusiasts everywhere are passionate about the gourmet experience. Fine dining restaurants are dependent on unique products and ingredients from around the world. The classic fine food importer fulfills this role. Fine Food importers seek brands of the highest quality, with unique attributes and reputation.  Not an option for commodities or "me-too" type products.

Niche Entrepreneur
Pioneering a brand with no existing sales is tough in any country. While, many brands would prefer partnering with a prestigious specialist, the reality is that a smaller distributor may be your best option to start. Niche entrepreneurs are hungry and flexible to work without significant resources supplied by the brand. It is important to calibrate your expectations when working with a niche entrepreneur and conduct due diligence on their financial situation.

Evaluate Your Current Distributor Mix

A valuable exercise is to evaluate your current roster of distributors "by type". Which models are delivering superior results ?  Which models are lagging behind ? Are there any universal conclusions which may apply when you expand to new markets or considering  a distributor change ? One type does not fit all scenarios. However, it is important to segment your partners and understand the inherent strengths and issues with different types of partners.