Enterprise Marketplace

Why Are Foodservice Wholesalers Turning to the Marketplace Model?

Angela Troccoli
February 22, 2022
Why Are Foodservice Wholesalers Turning to the Marketplace Model?
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The Covid-19 crisis served as a watershed moment for foodservice wholesalers. For those that had already invested in a robust eCommerce strategy and marketplace functionality, adapting during this time proved to be an easier task, galvanizing suppliers, staff and customers to swiftly switch focus. However, for those that had yet to commit to a digital presence or were relying on the wrong digital channels, changing to new, creative ways of conducting business was challenging. Below we consider why these foodservice wholesalers are increasingly turning to the marketplace model.

The foodservice wholesale sector has had to evolve at a rapid pace and those wholesalers unable to deliver digital buying experiences face the very real threat of being left behind. Without an online marketplace or online ordering facilities, foodservice wholesalers experienced a slowdown, or even abrupt stop, to sales during the pandemic. This was exacerbated by limited supplier networks, which led to frustrating demand and supply balance issues and delayed deliveries.

B2C buying habits are now heavily influencing the B2B world where buyers, accustomed to being able to find everything they want on an online marketplace in their personal lives, now expect a similar shopping experience in their professional lives. This rings true in the foodservice wholesale sector. For foodservice wholesalers, the pressure is on to offer first-class online services to their customers in order to compete and survive in the evolving and digital-first world of eCommerce. This pressure is felt keenly by top-level decision makers and a clear, robust digital strategy has been widely recognised as a crucial business element to future-proof wholesale businesses.

More than 65% of foodservice wholesalers want to operate a marketplace

Results of a newly published survey carried out by the Federation of Wholesale Distributors (FWD), Foodservice Online and Mirakl have been published in a new white paper ‘Mind The Gap: Why Digital is the Future for Foodservice Wholesale’. They show an overwhelming recognition among foodservice wholesalers of the importance of developing a strong digital eCommerce presence. In fact, 100% of the leading foodservice wholesale businesses surveyed view eCommerce as important to the future of their business. More than 82% felt that demand from foodservice buyers for online services is increasing and more than 85% felt their business was disadvantaged if their competitors had a strong online presence.

Mirakl FWD Stats r3B

However, less than half of those foodservice organizations surveyed had currently set aside a dedicated budget for eCommerce development. They understand and recognise the strategic priority of eCommerce, and more particularly of operating their own marketplace, but there is a very real disconnect between what these wholesalers recognise as necessary, and the action they are currently taking or investment they are currently making to implement eCommerce and their own marketplace.

That being said, looking to the future, foodservice wholesalers are ready to seize the marketplace opportunity - more than 65% of those foodservice wholesalers surveyed want to operate their own marketplace. By onboarding third party sellers to an online marketplace, foodservice wholesalers are able to diversify their supply chain and quickly expand assortment into new categories that would otherwise not fit in their existing warehouses. This business model therefore enables these organizations to tackle the availability and logistics restrictions of the traditional wholesale model.

“During the pandemic, the foodservice wholesale sector had to evolve at a rapid pace and those wholesalers unable to deliver digitally faced the very real threat of being left behind when a limited supplier network led to frustrating demand and supply balance issues. Those online retailers who were already equipped with an online marketplace of their own at the height of the pandemic were able to leverage the scale and flexibility of their platform to bring together more sellers with more buyers, faster and easier than a traditional linear value chain model ever could.” James Bielby, Chief Executive, Federation of Wholesale Distributors.

Turner Price embraces the marketplace model

As a leading foodservice wholesaler serving more than 2,500 high-spend catering customers throughout the UK, Turner Price has always embraced innovation when it comes to meeting customer expectations. The organization knew their customers wanted more choice and wanted everything in one place. As a result, the wholesaler had to decide upon its future direction: it could either continue to operate as it had before and expand its first-party offerings to meet increasingly diverse and evolving customer expectations; or it could seize the opportunity to increase sales, volume and profitability. Rather than doubling down on the capital-intensive approach of investing in more vans, warehousing space, and inventory, Turner Price chose to launch its own online marketplace to grow its offering, increasing categories and suppliers to better meet its customers’ needs.

“The marketplace model was a no-brainer in order for us to deliver the very best service to our customers. Like many sectors, catering experiences fast-moving trends and customers want to tap into these while also having a broader choice of products. By launching our marketplace, we are able to meet every new demand that comes along, quickly, cost efficiently and without risk. Our marketplace, powered by Mirakl’s leading technology and expertise, is unlocking greater revenue, better customer relationships and pushing our business ahead of the competition.” Julian Owen, Director of Sales Marketing, Turner Price

To access more insights on why foodservice wholesalers are increasingly turning to the marketplace model, as well as a range of best practices on how to launch a marketplace, download the new white paper ‘Mind the Gap: Why Digital is the Future for Foodservice Wholesale’.

angela-troccolli
Written by
Angela Troccoli
Senior Director Product Marketing, Global B2B at Mirakl

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