What Business Are Foodservice Distributors In?

Are foodservice distributors in the business of distribution? We would answer a resounding NO. Foodservice distributors are in the business of identifying and fulfilling customers’ needs and ensuring that they succeed at their reason for being, which is to provide extraordinary dining experiences for consumers.

A Harvard Business Review article, written in 1975 by Theodore Levitt, was for many years a classic in the management arena. Called “Marketing Myopia,” it put forth the idea that companies should not define themselves too narrowly. To grow, Levitt said, companies need to identify and act on customer needs and desires and not assume that their products or services are indispensable.

History has shown that many businesses fail to take this advice to heart. Railroads, for instance, declined because they thought they were in the railroad business, not the transportation business. They were not customer-oriented. Levitt even suggests that manufacturers of buggy whips could have survived had they seen themselves in the transportation business and evolved to produce fan belts or air cleaners as customer needs changed.

Distributors face unprecedented competition in their efforts to achieve growth – not just from other distributors, but from disrupters like Restaurant Depot, Amazon and other new players. So how can a distributor compete? It requires shaking off marketing myopia and working hard on differentiation. There is simply no longer any meaningful competitive advantage in traditional value-added services or from “unique” products: Everyone has them.

Levitt says, “The organization must learn to think of itself not as producing goods or services but as buying customers, as doing the things that will make people want to do business with it.”

The Secret Sauce. What’s the secret sauce that can make customers want to work with one distributor over another when there’s so little true differentiation out there? People, products, pricing and service are entry points but we believe the critical key ingredient is what we call “foundational messaging.” That means identifying and communicating a company’s fundamental core, which stems from heritage, values, culture, customer service, integrity, passion and savvy. The resource for this foundational messaging is a company’s own story. Every distribution company today, particularly in the broadline realm, offers essentially the same products and services but no two share the same story. From the largest to the smallest, each has a fascinating history that can be crafted into successful foundational messaging. Ultimately, it’s not about what you are, but who you are that sets you apart.

Operators today are faced with extraordinary challenges ranging from bad reviews that go viral on social media, to labor shortages, to regulation and rapidly changing technology. Distributors – if they recognize that they are in the business of ensuring customer success – can adapt and help them with these issues. But operators have other sources of help and increasingly need good reasons to do business with a traditional distributor. Savvy distributors will give them a reason through a smart, well-crafted foundational messaging strategy!

A Clash of Cultures Can Doom a Merger

Are you suffering from failure to integrate?

A sophisticated understanding of the past is a powerful tool for shaping the future. One of the most critical areas where this is borne out is in the merging of corporate cultures after an acquisition.

Off and on since the 1990s, foodservice distribution has gone through significant spates of mergers and acquisitions. When two cultures – in most cases, former competitors – suddenly have to blend together, a heritage-based narrative that defines who you are, what you stand for, how you got here and what makes you unique helps facilitate understanding and integration on both sides of the aisle. Such a narrative also provides “acquired” managers and employees with critical orientation and communications messages to share with jittery customers during the transition to new ownership.

Bottom line: A published corporate history is not only a “nice to have” to commemorate a significant anniversary or milestone. It is a “need to have” for leaders to instill in employees a sense of belonging to something larger than themselves and in customers a sense of connection and confidence. Communicating culture through a corporate history helps all parties impacted by a merger understand not just “how things are done around here,” but the heritage, vision and values of the organizations involved.

A living statement of a firm’s corporate culture can only come from its story. We can help you tell yours.