Redistribution Point-CounterPoint Article
By Staff -- Foodservice Equipment & Supplies, 4/1/2004
Congratulations on an excellent article. In my opinion, both gentlemen are right on the money in their comments, and I sense that each recognizes the truth in the other's position.
Mr. Singer's concerns echo those of the grocery chains, when food manufacturers began selling to Price Club and Sam's. The manufacturer's logistics and transaction costs were lowered, accounting for at least a part of the reduced prices. In addition, most if not all of the "marketing funds" were removed from the equation, a fact that the traditional grocers tended to overlook.
Similarly, some food manufacturers deal with channel conflicts between their route organizations and independent distributors. The route guys provide excellent personalized service and equipment support that a distributor cannot match, but it comes at a cost. Again, offering lower prices through a distributor makes economic sense.
If the marketplace wishes to choose between "high-touch"/higher cost service, and "com-moditized"/lower cost service, who can blame the manufacturer for attempting to serve both segments?
Dave DeWalt
Franklin Foodservice Solutions
Franklin, Mich.
www.franklin-foodservice.com
dave@franklin-foodservice.com
(248) 539-9370
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