Disintermediation in the Food & Beverage Industry: A very Real Threat

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Food distributors face unique challenges and need a technology partner with a proven track-record of success. e2b teknologies is that partner – with nearly three decades of experience working with inventory-centric businesses to implement cutting edge technologies to improve profits and help distributors thrive in today’s challenging environment.

Disintermediation in the Food & Beverage Industry

Back in the dot.com bubble of the mid-1990s, hundreds of companies were founded on the premise of using the internet to “cut out the middleman” from every product from apricots to zucchini. While most of these enterprises faded into obscurity, supply chains have since undergone a radical transformation, and disintermediation has become a very real, if not existential, threat to wholesale distributors.

Food distributors are not exempt from this trend. Companies that began by serving other industries have moved “wholesale” (no pun intended!) into the food and beverage business. Walmart now boasts of the highest US market share of any grocery retailer, and no one in the distribution business needs a reminder that Sam Walton attributed much of his company’s success to the fact that when it began, distributors of the day would have nothing to do with it; thus forcing the Waltons to set up their own super-efficient distribution network.

Internet retailers such as Amazon – another relative newcomer to the food business – also attribute a significant portion of their success to world class internal distribution networks. In addition, many of the practices that have become universal in the B2C world have migrated to the wholesale trade. Pricing is becoming more transparent; web sites have sprung up that allow customers to rapidly compare product and service quality; and customers have come to expect the same intuitive, easy to use ordering platforms that they see on their screens at home.

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