5 Challenges Facing Food Distribution Businesses

19 Jul 2021

2020 was a challenging year for the food distribution industry. With that being said there still a host challenges facing distributors going into the back-end of 2021.

In business, there are always going to be challenges, the best you can do is plan and have systems in place that minimise the effects.

Here are 5 of the biggest challenges food and beverage distributors face today:

1. Rising Costs:

At the end of the day, no matter what business you are in, if you can’t cover your costs, you will quickly go out of business. The need to minimise business expenses has never been greater for distribution business. Recent data shows the cost of operating a food distribution business in Australia has ballooned by 40% in the last decade and shows no signs of slowing down.

Rising costs are presenting many challenges for food and beverage businesses. Consumers are becoming more and more price conscious and are favouring low-cost distributors. When one industries cost rise other industries will follow.

It’s so important to continually assess ongoing costings and re-evaluate every quarter at a minimum.

2. Providing the best customer service:

With competition growing, it’s so important that you are providing the best customer service. Customers are looking the best quality products, at the cheapest possible price, from a business who is reliable. Customers are becoming far less lenient of incorrect, late or missed orders.

Customers want simplicity, Vendors and Distributors need to ensure they are creating a seamless and accurate ordering and fulfilment process for customers. 

To learn how you can improve customer experience visit our guide here.

3. Customer Payments:

A recent report published by Xero found a breath-taking 53% of all invoices sent in the food and beverage industry took 26 days to be paid on average. No matter what business you’re in waiting that long for payments is dangerous to your business’s longevity.

To minimise cashflow strain, food and beverage businesses should look to consolidate their payment process by using a payment gateway. A payment gateway provides businesses with an automated payment solution from invoicing to receipting.

  • Customer invoices are generated and sent automatically at the correct interval.
  • The payment is taken automatically at the agreed time.
  • The payment is automatically allocated and receipted to the correct invoice.
  • Enable customer credit limits.
  • Handles complex discounts, rebate structures, multiple price levels and price adjustments.

As costs continue to rise, distribution businesses can’t afford to build and chase debtors. It’s so important that you implement an automated payment system to reduce liabilities or you could risk of insolvency.

4. Tracking orders

It’s a far too common process in the food and beverage distribution industry – receiving orders via email, SMS or over the phone. The problem with taking orders manually is you need to physically input the orders into multiple systems or spreadsheets, depending on your choice of system. This is time consuming and there is a high risk of making a mistake.

On top of this the business cannot accurately track and report on orders taken. This is so risky and in a volatile customer market can cause frustrations that could result in customer loss.

As time is key in the food and beverage industry it is so important you automate your orders through a food and beverage management system.

The benefit of automating your ordering using a management system is you don’t need to manually input data! Using the latest technology the system completes, assigns and transfers data instantly to the correct location – giving you a complete business overview and hours of extra time to focus on growth.

5. Transitioning to online ordering

Last year proved how important online systems were for businesses. A challenge facing many distributions business is transitioning their ordering process to online. Sure, many distributors struggle with the thought of changing a process, but at the end of the day if the process doesn't streamlines operations and increase customer satisfaction then you will soon be in a bit of a pickle.

One of the advantages of online ordering is it's integration with your management system. Once a customer places an order, your system will automatically update stock numbers, upcoming orders and sends an invoice to the customer. The opportunities are endless for online ordering and in such a competitive landscape you give customers the ability to place orders when it suits them best.

The solution for Vendors and Distributors

Successful Food vendors and distributors are investing in management systems like EasyVend to automate their day-to-day tasks. This solution frees up time to address common challenges that the industry faces. Automating business operations through a management software reduces overheads and increases efficiency and profit.

For food vendors and distributors, EasyVend supports and automates every part of your business, freeing you up to grow your sales unlike other ERP systems on the market that are designed more for whole suppliers than for distribution businesses like yours.

Call us today on 1300 473 744 to see what EasyVend can do for your business or submit the form below to get your no-obligation FREE demo of EasyVend.

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