Written by Chris Zdorovtsov (Former SDSU Extension Community Development Field Specialist).
Grocery and food retail outlets will require producers to supply larger quantities of product on a consistent basis. There will be more pressure for uniform products that meet specifications and packaging standards, depending on the size of the store. There will be variation in requirements between small niche stores and large regionally owned chains.
Prices received for a wholesale product will be lower, however your volume sold will be much greater. When dealing with producing a larger quantity of produce you will likely limit the number of products you produce. The production process can become more efficient and expansion can become easier.
Consider these questions when determining if you should move into this type of market. Do you have the field and facility space as well as the equipment to produce for a wholesale market? Can you harvest, clean and sort large quantities of produce efficiently? Do you have cold storage and a delivery vehicle to move larger quantities of product? Can you be prompt about filling orders through fax, email and phone and dedicate time to go on sales calls? Can you maintain a regular delivery schedule? Will you need special insurance to sell to stores? Do you have enough cash flow to deal with clients that utilize invoices with 30-day payment agreements?
There are different types of food stores that could be targeted.
- Local specialty stores may be more approachable since they often want to buy local or niche products. They are usually interested in smaller quantities of product compared to large stores. These stores are typically smaller, usually locally owned and expect high-end quality.
- Local grocery stores may be able to handle higher volumes of product. They will require an easy approach for ordering and billing. These stores are typically locally or independently owned, smaller than a chain store and offer a complete line of food goods. They are somewhat flexible, but less flexible than specialty stores.
- Regional and national owned chains will likely be able to sell a larger volume, possibly through multiple stores. These types of stores may require more paperwork and insurance than smaller stores. They will desire more streamlined ordering, billing and delivery methods. These stores are often in multiple locations in the community or region. Sometimes there is less local control as many decisions are made by a corporate office.
- Convenience or Corner Store could be targeted in location where grocery stores are limited. Some corner stores have gone to stocking local products. These stores will have a range of structures and support for local foods.
Resources for Selling to Grocery Stores
- Wisconsin Local Food Marketing Guide: Restaurants & Grocery Stores, (pg. 80) University of Wisconsin Extension
- Selling Directly to Restaurants and Grocery Stores
- Marketing Fresh Produce to Food Retailers (Grocery Stores) University of Kentucky Extension
Corner Store & Food Retail Development
- Healthy Corner Store: A Best Practices Brief, The Ohio State University Extension
- Healthy Corner Stores Network
- Greens for Greens: Finding Public Funding for Healthy Food Retail
- The Supplier-Retail Gap: Connecting Corner Stores with Local Foods, The Food Trust
- Rural Grocery Store Initiative, Kansas State University
- Working with Rural Grocery Stores Webinar, Robert Wood Johnson Foundation