There are three different sales channels in the food industry: as an ingredient for food manufacturers, to be sold in the food service sector and finally to be sold in retail (supermarkets, groceries, street markets and e-commerce). Most food distributors in the UK are specialized in one of these categories. In this page we will look at all three sales channels, based on the project that we executed in 2020 for Golden Red Trade Solution, a supplier of maple syrup from Canada.
Maple syrup: a rare food source
We look at a product that is used as ingredient, in restaurants and sold in the retail: maple syrup. Maple syrup is only produced in a particular part of the world: east Canada and northeast USA. Among the US states and Canadian provinces, is the province of Quebec the biggest supplier. The Federation of Quebec Maple Syrup Producers (FPAQ) is highly controlling production and prices. This situation made maple syrup a rare source with a high value.
For ingredient importers, maple syrup is often a source that they could hardly get a hand on. When food manufacturers choose maple syrup as an ingredient (e.g. for cereals), they need to be guaranteed of stable supply in terms quality and volume.
Like the rest of the world, the food service sector is highly effected by the 2020 pandemic. Distributors specialized in this sector are most desperate looking for alternative opportunities. The ones with enough financial back-up, are therefore good candidates to talk with now, for the remaining strong part of the food service sector (like hospitals) and the future recovering sales channels (e.g. restaurants). These distributors currently have the time to attack the retailers more actively, since they have more time and motivation than any distributor who is fully specialized in retail. Currently the maple syrup market in food service sector is in hand of one single player: Clarks. So, although this market segment is temporary shrunk due to the pandemic, the food service sector is actually a good market to enter right now.
Since the UK has traditionally strong ties with Canada and the northeast states of the US, maple syrup is a known product that is sold in the UK since a long time. Currently, maple syrup is one of the standard products in each supermarket. Although the normal consumer regularly buys it, generally they don’t know much about the source, not even that it comes from a tree. When the image of the product is going to be restyled (e.g. as a 100% natural product with health benefits), maple syrup has the competence of getting increasingly popular.
Grocery sales in the UK are dominated by Tesco, Asda (Wal-Mart subsidiary), Sainsbury’s and Morrisons. These ‘big four’ have a combined market share of over 70% of the UK grocery market. Discounters have seen an increasing market share, in particular the German Aldi and Lidl, and some other local versions. The organic specialist Wholefoods from the US got its first feet on the ground in 2007, and is in particular active in and around London.
|Tesco||€ 58 billion||3435|
|Sainsbury’s||€ 34 billion||2400|
|Asda||€ 25 billion||650|
|Morrisons||€ 20 billion||491|
|Marks & Spencer||€ 12 billion||600|
|Amazon||€ 12 billion||–|
|Aldi||€ 12 billion||< 800|
|Co-op||€ 11 billion||2582|
|Boots||€ 8 billion||2500|
|Waitrose||€ 7 billion||344|
Top 10 retailers in the UK (2018)
Margins and prices
When defining the prices for maple syrup, one should look at different stages of the value chain, the costs and the margins of the companies involved. On the producers’ side, the maple syrup market is highly in control of the PPAQ, the Federation of Maple Syrup Producers in Quebec. Prices can easily be found on their website. On retailers’ side, you can easily follow the consumer prices on the websites of the biggest retailers. Every retailer uses other sizes of bottles, some measure in grams while other write ml. They seem to do this on purpose so that the consumer finds it hard to compare prices.
If you want more information about maple syrup, food, FMCG, the market situation in the US and finding business partners in these and related sectors, please contact Cornelis Wildenberg, who executed the distributor search project. Just call +1 347-587-8712 or text (WhatsApp) him, or send an email to email@example.com.