AFDR bringing the word from the Street upstream to our Brand Partners
“Wall Street” distributors and “Main Street” distributors… What’s the difference?
Manufacturers/Brands need a DSR Marketing Plan for both.
Manufacturers’/Brands’ marketing and sales plans need to recognize and compensate for recent changes that are drastically affecting the entire dynamics of the foodservice distribution industry. AFDR has recognized that more changes have happened in 2012 and 2013 than have happened in the past 30 years. You might not work directly with/for one of the companies that are involved with the changes, but indirectly, we are all being affected.
One of the big changes is the evolution of foodservice distribution and how different distributors go to market. AFDR is defining these distributors as WALL STREET and MAIN STREET distributors.
“WALL STREET” distributors have large amounts of stockholders that tend to get restless when they don’t see growth, strong stock prices and dividends being paid out. Naturally this would make the decision processes and timescales shorter to ensure companies can continue to show immediate progress for next quarter. These distributors tend to focus on a much different business model, and sell a larger percentage of in-house branded products than the “Main Street” distributors.
Some of the Wall Street distributors are engaged in dialogue about “squeezing dollars out of their system” by moving toward an “Amazon/Retail Distribution Model” of needing fewer DSRs. They’ve suggested it would be in their best interest to get operators buying because of their company name (brand, if you will), not because of a particular DSR.
They believe their name and their in-house branded products (private label) are strong enough that operators might use them over national brands and just place their orders online without consulting the DSRs to make sure it’s the right product for the purpose.
“MAIN STREET” distributors usually have very few stakeholders and tend to think longer term for the next generation of stakeholders. They see value in DSR’s business relationship with Independent Operators understanding that the service they provide to them makes for a profitable, long-term relationship for all parties involved. Selling a larger percentage of National Brand name products than the Wall Street distributors, the Main Street distributors are adding a different kind of value by delivering “ service beyond the norm,” with products operators want like the “Oldie but Goodie,” street-tested and proven products from these brands. DSRs describe these products as “insurance policies” because DSRs know they will perform consistently in their operator’s recipes every time.
Technomic/AFDR research shows the Independent Operator’s perceptions of the impact of DSR’s influence:
- DSRs influence 70% of the purchasing decisions
- 85% value their personal relationship with their DSRs and consider DSRs a business partner
- 60% are more loyal to their “most trusted DSR” than they are to the distributor they represent.
Operators count on their DSRs staying up to speed and knowing and understanding the differences between the street-tested “oldies but goodies” products and the constant new offerings being touted as “equal” and “cheaper” or “more economical.”
TV shows like Restaurant Impossible, Kitchen Nightmares and countless others have clearly shown that a large number of Independent operators struggle with even the basic knowledge/expertise of figuring things like: yield/loss when cooking products; being able to calculate menu costs; or even creating/interpreting P & L statements.
Independent Operators whom AFDR has interviewed admit they just do not have the expertise on staff or the time to run their establishments and stay up-to-date with current products, new menu trends, and new ideas that will allow them continued success without their DSR’s expertise and help.
Could the Amazon model be the way of the future? Absolutely! If you were running a foodservice operation and were an expert with the experience of say, Robert Irvine of The Food Network’s, Restaurant Impossible, the Amazon model might be a good fit.
Whatever your view is of the foodservice distribution future, we at AFDR believe there are some fantastic opportunities for those who recognize how to leverage it to their advantage.
Just a few of the opportunities AFDR has identified and has programs to help with in our current environment include:
- Marketing plan that recognizes the new national broker model that some manufacturers have embraced
- BSR (Broker Sales Rep) sales and product training programs in NATIONAL broker model
- BSR sales and product training programs in LOCAL broker model
- Marketing & Sales strategies for Wall Street Distributor DSRs and also one for Main Street DSRs
- Marketing programs to leverage product and category management at local distributor level
- DSR category product training
- DSR product training
- Identify and understand the DSR, “your street sales force”
- Gain insights from DSRs and distributors on what works and what doesn’t via a DSR Focus Group
- Take part in and be a Brand sponsor of AFDR’s new DSR Brand Mindshare Research project. This is a semi-annual survey of DSRs on their mindshare of your brand. This research focuses on how your brand is doing in the street in the following areas:
- Total product quality
- Innovative new products
- Availability of product samples
- Product training
- Sharing category trends/insights
- Local Support
In conclusion, we are not at all saying that one distributor type is right or wrong, or that one is better than the other -- just different.
Contact us to be a brand sponsor of the new DSR Brand Mindshare research project or if you would like to discuss taking part in any of the other programs/opportunities mentioned above that could help your brand on the street.
DSRDave@afdr.org or call 614.402.0228