649: OMG! What just happened to foodservice distribution last week?

 

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  1. DSR Live: 649

 

OMG!  What just happened to foodservice distribution last week?
 
Of course, we’re talking about the fact that General Mills is the latest brand to load all of its foodservice product info into the AFDR Product Library!
 
Yet another top brand understands the reality that the usual foodservice brain trust often forgets.  Building your foodservice distribution business with Independent Operators is all about relationships… not what happens on Wall Street.
 
The Sysco-USF deal might be interesting if you’re a CFO.  But stock market news has little influence on daily street sales.  Most independents buy from trusted DSRs who know how to solve problems, suggest pragmatic menu ideas and be an information resource.  That’s why the AFDR Product Library is a great tool to enable General Mills and other DSR friendly brands to provide resources that, ultimately, help DSRs build relationships with Independent Operators.
 
Case in point about relationships… AFDR member Ted Glenn just landed a new independent operator who plans to purchase about $3,000 per week.  If Ted had listened to the pundits, he might not have pursued this deal.  Ted works for a small $6 million produce distributor that delivers three days a week.  How could he ever compete?
 
It’s simple.  Ted didn’t focus on the perceived disadvantages of competing against the giants.  He worked on meeting the customer’s needs in practical ways.  Ted and his customer jumped onto the AFDR Product Library and the DOT Foods Expressway to find all the products that weren’t already in Ted’s warehouse.  Brilliant!  Not only does the operator get the products he needs on time, Ted’s distributor doesn’t have to free up new warehouse slots.  The products come in from DOT… are cross-docked to Ted’s trucks… and out they go.
 
We love hearing wins like this because they illustrate what goes on every day among the best DSRs.  The fact that #1 is buying #2 has virtually no impact on how the DSRs serve Independent Operators.  And this applies to Sysco and USF reps as well.  I know lots of truly exceptional DSRs at the big outfits as well as smaller companies.  They all will continue to win business regardless of whether their company has more trucks on the road than the other guys.
 
After the dust settles, Sysco itself estimates it will have about 25 percent of the market (actually 2 percentage points less than the two companies hold individually).  Hello?  That means 75 percent of the market (and probably a higher percentage among Independent Operators) remains in the hands of the thousands of other distributors out there.
 
To the 80 percent of the DSRs who struggle to build their business, last week’s news could become just another excuse as to why these DSRs lost deals, can’t close prospects or are still chasing last week’s A/R.
 
For the 20% who are super stars… the news is sweet because the competition will be off their game while these elite DSRs remain focused on helping their customers stay in business.
 
Action Items:
·       DSRs:  Continue to build on your relationships by being that extra employee who helps your customers solve problems and uncover great ideas to build business.
·       Manufacturers:  Ignore the opinions out there that the Sysco-USF deal means foodservice is going the way of Wal-Mart.  Independent operators are not grocery stores!  Nor do the independents have time to mess with the paperwork of tired old rebate and coupon programs.  What DSRs need are better ways to help operators face the DAILY challenges of keeping their doors open.  Filling out a $2-per-case rebate form doesn’t help much when the health inspector arrives at the door.  But your brand will be worshipped if you help DSRs teach their customers how your product improves food safety so the inspector has nothing to gripe about.
 
Be a resource… and sell something!

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