What is a Food Brokerage?

The process by which fresh food makes it from local farms to your table is a fascinating one. It’s a complex logistical network that involves farmers as much as those who process the food. And it ends with one critical part of the process: food brokerage.

Food, just like any commodity, has a market value. Stores, producers, and customers all decide to some degree how much your weekly loaf of bread will cost you. One of the people who works with deciding the price is the food broker.

In this article, we will discuss brokerage for food and how it affects food distribution.

What Is Food Brokerage?

Think of a food broker as a middleman between the food supplier and the endpoint market. Suppliers handle the production of food, so they can’t exactly spend their time negotiating prices and marketing. So instead, they hand things off to a food broker.

All a food broker is doing is negotiating the best price for the food supplier. They often do this on a store-by-store basis, or in some cases with entire chains of stores. Although they are an independent entity, they do attempt to work in the interests of the food supplier.

Without food brokers, it would be almost impossible for suppliers to create long-term business relationships with sellers. Stores benefit from this relationship just as much as the providers. When opening a convenience store, one of the first things a business owner should do is get in contact with local food brokers.

Benefits of Working With Food Brokers

Aside from the fact that stores get food, and suppliers get buyers, what other benefits are there? It’s far more than just having a solution to getting your food on customer tables in a timely manner. These are just a few examples of how food brokers can help you:

• They handle price negotiations during market changes, such as inflation
• They help suppliers remain profitable in the lean times
• They provide free “marketing” by having a supplier’s food on shelves
• They help suppliers to move more product to a wider range of stores
• They can help to identify the target markets for specialty brands

Downsides of Food Brokers

Naturally, food for a convenience store won’t always get there smoothly. There are some downsides to be aware of with food brokerage:

• Food wholesale prices mean suppliers must sell in bulk
• Food brokerages may be limited in a given city or neighborhood
• Government subsidies may not cover transactions with a food broker

Find the Right Food Broker for You Today

Food brokerage plays a key role in how suppliers obtain the last piece in the puzzle: distributors. Brokers handle the price negotiations and decide where a certain product will appear. This provides numerous benefits for sellers, from free “marketing” to better movement of product.

Follow our blog to learn more about other business topics.