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Insight

New Food Distribution Model is Good For Business & Consumer

Local & Regional Hubs

Today’s customers demand strict food standards. The world is a global village in which news spreads faster than ever across the internet, which means cases of food poisoning cannot go unreported such as a few years ago. Public awareness puts the focus firmly on the storage and transport of food products.

A new food distribution model has emerged which is different to the conventional one in which a distributor’s key role was as an intermediary for market access. This new model is being driven by consumer demand for locally sourced products, which in fact represents both an opportunity and barrier for the future of our food system.

Local and regional food hubs have become the new solution to supply consumers with fresh local products.

Food hubs essentially work in connecting large and small producers with nearby markets.

As shown in the figure below, this new distribution model has collection centres which aggregate, process, package and distribute food products to markets in proximity.

Critical Link

Food distribution is not only a critical link in the supply chain, but also the primary feature of how food hubs operate.

Large or small, distributors employ a set of common practices – planning routes based on an analysis of the cost per run, finding partners to ensure trucks are fully loaded, and managing existing routes efficiently as a priority.

The horse meat crisis 2013 was a trigger for a growing concerted effort by industry to simplify supply chains where possible.

As distributors scale up their fleet and warehouse capacity, agreements with suppliers and buyers adhere to more formal standards, while investments in technology and physical infrastructure play bigger roles in streamlining operations.

 Click here to download the full insight.

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Author

Paul Fagan

Partner (Advisory Services)

Paul Fagan is a partner at Farrelly & Mitchell and leads the consultancy team, providing strategic, advisory, technical and M&A services to food and agribusiness.

New Food Distribution Model is Good For Business & Consumer

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New Food Distribution Model is Good For Business & Consumer

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Local & Regional Hubs

Today’s customers demand strict food standards. The world is a global village in which news spreads faster than ever across the internet, which means cases of food poisoning cannot go unreported such as a few years ago. Public awareness puts the focus firmly on the storage and transport of food products.

A new food distribution model has emerged which is different to the conventional one in which a distributor’s key role was as an intermediary for market access. This new model is being driven by consumer demand for locally sourced products, which in fact represents both an opportunity and barrier for the future of our food system.

Local and regional food hubs have become the new solution to supply consumers with fresh local products.

Food hubs essentially work in connecting large and small producers with nearby markets.

As shown in the figure below, this new distribution model has collection centres which aggregate, process, package and distribute food products to markets in proximity.

Critical Link

Food distribution is not only a critical link in the supply chain, but also the primary feature of how food hubs operate.

Large or small, distributors employ a set of common practices – planning routes based on an analysis of the cost per run, finding partners to ensure trucks are fully loaded, and managing existing routes efficiently as a priority.

The horse meat crisis 2013 was a trigger for a growing concerted effort by industry to simplify supply chains where possible.

As distributors scale up their fleet and warehouse capacity, agreements with suppliers and buyers adhere to more formal standards, while investments in technology and physical infrastructure play bigger roles in streamlining operations.

 Click here to download the full insight.

Download Full Insight

Author

Paul Fagan

Partner (Advisory Services)

Paul Fagan is a partner at Farrelly & Mitchell and leads the consultancy team, providing strategic, advisory, technical and M&A services to food and agribusiness.

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