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    • Tips for Producers and Processors

    Tips for Getting Ready to Sell to Retail, Wholesale, and Food Service Buyers

    Are you a B.C. producer or processor interested in selling your B.C. products to commercial and institutional buyers? Getting ready to sell to these markets takes research and preparation to understand each of their unique dynamics and requirements. Use these tips to understand common requirements of buyers and help you get ready to successfully sell to commercial and institutional buyers.

    View or download the full PDF: Feed BC Tips for Selling to Commercial and Institutional Buyers

    Are your business operations ready for this market?

    Each type of buyer is unique in their product needs and how they do business. Generally, food businesses that succeed in retail, larger wholesale, and food service market channels need to:

    • Maintain consistent volumes and quality that meet a high standard of food safety, traceability, production, and processing standards;
    • Be ready to sell to regional or broadline distributors or other partners in the market sector;
    • Be prepared to price differently when working with retail and food service clients.

    Have you identified key supply chain partners to access your target market?

    Retail: Retail outlets vary in size and scale—smaller, independent groceries are more willing to do direct sales, while other national or subsidiary outlets have more complex requirements that require distributors or specific contracts with the seller. Retail buyers generally seek a 35-40% margin, which can vary with factors purchasing product directly or through an intermediary, what long term contracts are in place, exclusivity deals and promotional campaigns.

    Brokers: Brokers are third party agents who coordinate and manage the relationship between producers and buyers like distributors and retailers. Brokers may several brands, selling a variety of product lines to a portfolio of retailers. Brokers generally charge a 5–8% commission and often a monthly fee in exchange for working their connections and negotiating sales of your products to harder-to-reach retailers

    Institutional: Buyers for facilities such as health care (acute and residential), post-secondary institutions, correctional facilities, and K-12 schools most commonly purchase products for food services at wholesale prices sourced through Group Purchasing Organizations (GPO), distributors, and/or contracted foodservice companies. Institutional buyers will have specific product specifications that are often different to the retail market.

    Distributors: Many food service buyers rely on distributors to stock and deliver products to their facilities. Distributors may specialize in sales channels, types of product (e.g. natural foods, produce, seafood, etc.), or scale (broadline versus regional). Many distributors stock thousands of products and typically require an average sales margin of 20-30%. They have their own programs, fees, and requirements.

    Since they have comprehensive, category product listings with multiple options, products that are unique or new to the market and show clear, differentiated value have an advantage. Approaching a distributor with existing or potential customers will demonstrate market viability and demand that can in turn drive new business to distributors. However, being listed with a distributor does not guarantee sales or demand from retailers or institutions, and you will still need to actively market your product.

    Do you understand the needs of your potential buyers?

    Since buyers have different needs, not all products are relevant to all buyers (i.e., the needs of a university cafeteria will be different than the needs of small grocery store).

    Before attempting to sell within this market sector, make sure you clearly understand the specific needs of your buyer, their partners and how they differ from other sales channels.

    • Research and compare the needs of the buyer segment to determine how your product and company meets the requirements. What unique value and solution(s) does your product provide to your buyers and consumers?
      • For example: You make a ready to heat, pre-portioned product. This product could be well positioned as having value to institutional food services by reducing labour cost or the need for skilled labour. Even if it is more expensive than an institution could make in-house from scratch, develop a value proposition by explaining how this product can save institutions’ time and labour.
      • For example: Your product packaging size requirements can be easily adapted to meet different buyers’ needs.
      • For example: Your product is allergen-free and made in a certified allergen-free facility, which means it meets a need of health care, school, and retail food purchasers.

    Agriculture and food industry associations and trade shows may provide valuable insights specific to product category and assist you to gauge different types of buyers’ interest in your product.

    Do you have a comprehensive business plan with a well-developed costing and marketing strategy?

    As the foundation for the expansion of product channels and business growth, defining a clear, strategic business plan with goals specific and appropriate to the market sector is essential. Compiling your research and knowledge of your industry with targeted sales channels, specific buyer requirements, understanding of competitors, as well as a marketing and growth strategy into one cohesive business plan is a powerful tool to promote your food company and products.

    • A solid marketing plan will help you define and communicate your competitive advantage to your targeted buyers: such as how your product meets their needs, and your plan to attract and retain customers to drive sales—and identify the resources you need to achieve these elements. It will also help you calculate your pricing strategy and how you will promote and differentiate your product.
    • The best business relationships are built on a shared understanding of success—which takes time to develop. Discuss volumes and costs with potential distributors and other types of buyers, and be clear on the targets for price points, sales volumes and your investments required to meet these numbers. Understanding your ‘cost of goods’ and direct labour costs is essential to determine product feasibility when considering the margins that will be deducted at each stage of the sales process.
    • Industry or marketing associations, and specialized tradeshows can help promote your product. The BC Ministry of Agriculture and Food offers events and educational opportunities to connect with institutional and commercial buyers.

    Are you able to scale to demand?

    One of commercial and institutional buyers’ main apprehensions about bringing on new suppliers is whether they will be able to maintain product quality and distribution consistency through increased demand. Maintaining consistent quality without a gap in supply and delivery is critical. As demand for your product grows, you will need to assess your production capacity to reliably meet demand at scale:

    • For smaller primary producers (fruit and vegetable) this might mean exploring aggregation opportunities with industry associations or value chain partners,
    • For smaller processors, it might mean working in a shared use facility like a food hub, commissary kitchen or working with an industry partner such as a co-packer to extend your production capacity,
    • Your business may need to adapt infrastructure and production to meet the volumes and specifications of buyers.

    Do you meet the food safety standards and requirements of your potential buyer?

    The ability to serve safe food according to municipal, provincial, and federal food safety regulations is important in every operation. However, these standards are paramount when providing food to facilities that serve communities with compromised immune systems such as the elderly and infirmed in health care. Most broadline distributors and food services require food safety and industry certifications to carry your product. Depending on the produce or product offered, there are different food safety programs that can help you meet the specific facilities’ needs.
    Many institutions have their own procurement and contract guidelines—many of which are available on their websites—and it is important to check and familiarize yourself with these requirements. For example, B.C. Kindergarten to Grade 12 schools have nutritional guidelines that must be met.

    Many buyers require certifications that designate a level of industry standard food safety, such as:

    • HACCP (Hazard Analysis Critical Control Points): Many buyers require processed foods to be produced in a HACCP-approved facility. HACCP is an internationally recognized method of identifying and managing food safety related risk and provides assurance that a food safety program is well managed.
    • Good Agricultural Practices (GAP): For primary agricultural products, to ensure safe fruit and vegetable production, harvesting, handling and brokerage.

    Do you meet labelling and packaging requirements?

    Canada has strict labelling requirements that must be followed when selling food and beverage products. These requirements are specific to the market you are selling to (e.g. retail, restaurants, foodservice or wholesale), where you are selling the product (i.e. within B.C. or beyond), the type of product (e.g. alcoholic beverages has specific and additional labelling requirements) and how it is packaged. A food product label must include information such as a nutritional chart, allergens, ingredients, and a best before date.


    Additional labelling and packaging requirements such as a Traceability Plan, UPC barcodes (Universal Product Code), and ECC Net registry (a national food product database for consumers) are generally a prerequisite for distributors and Group Purchasing Organizations (GPO). These enable product management through identification, traceability and recall by including information such as product origin, location, contact, agricultural and manufacturing practices, and company details. Understanding buyer’s requirements is essential to product viability, as you may need to adapt your packaging or product portioning to meet specific needs. For example, if you sell an individual retail item, this may need to be sold in bulk volumes, or you may need to provide a specific size of product for pre-portioned, ready to serve items.