The Reality of E&S Distribution

One of the most difficult parts of educating a new associate – TSR welcomes our new publisher, Chris Meyer, formerly of McGraw-Hill and Lebhar-Friedman – is explaining the structure of the foodservice equipment and supplies distribution channel. While our industry is not especially high-tech or complex, the path products take from equipment manufacturers’ facilities to end-users kitchens is, to put it mildly, unusual.

Let’s start with the factories themselves. In addition to administrators, designers, engineers, assemblers and testers, most factories have sales managers who must work with almost all distribution channel personnel including key customers, consultants, reps and dealers. Naturally, the lines of reporting often get tangled and orders are prone to mis-specification and delays. Manufacturers’ reps can act as intermediaries (though only when factories don’t sell directly to operators), but their primary function is to gain new orders, not vet them. This is one reason why specifiers strive to establish strong, direct relationships with the equipment manufacturers whose products they select most frequently and are quick to shift allegiance if their projects’ products are not delivered on time and to spec.

The dealer link in the distribution chain is frequently seen as the most difficult to understand for industry newbies. To begin, there are a wide variety of businesses that fall under the “dealer” appellation, including distributors, redistributors, stock-holding and non-stocking companies, and pure-play online organizations. End-users want to be able to turn to local dealers for objective advice and guidance when they look to purchase new or replacement kitchen equipment, but are not always aware that these intermediaries’ buying group affiliations may introduce a self-interested motivation to steer operators toward products that provide the greatest margin return, rather than those best suited to operator’ specific programs. What’s more, because dealers buy directly from equipment manufacturers, they, too, expect to be treated as customers, increasing the pressure for most favorable treatment on factories sales and service managers.

Even though many industry members often speak about rationalizing and simplifying the E&S distribution channel, it’s unlikely that this will happen anytime soon. In the meantime, it’s useful for foodservice operators to build rapport with veteran channel professionals to gain understanding of equipment distribution and sales from as many perspectives as possible. Like democracy, our current distribution system is the worst possible alternative – except for all the others.