The Changing Foodservice Broker Market

New Realities Facing Manufacturers

The foodservice industry downturn has been and will continue to be a catalyst for significant change in how business is structured and conducted at all levels. One key channel member being affected is brokers

While there has been steadily growing demand for broker services, brokers are faced with a host of serious market and business issues that have been intensified by the industry slump, including:

• Overall volume declines
• Shrinking base of independents
• Growth in contract business, most notably GPOs
• Greater demands from principals and distributors for more administrative/non-selling activities
• Less leverage (and therefore greater time spent) with distributors
• Declining commissions due in part to more exclusions, blended rates and rate reductions

Foodservice brokers are trying to restore channel power balance and improve efficiencies by consolidating. While consolidation is not a new development and is an inevitability, its rate has accelerated, with KeyImpact leading the charge.

Manufacturers need to be aware of and, in some cases, concerned about the changing nature of the foodservice broker market. We believe the broker market is at an inflection point and that changes to the broker business model will be significant. Therefore, we will be studying the future of brokers and assessing how the referenced changes will impact manufacturers.

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