Even though investors are putting in a lot of their money into the food delivery companies, they are still unable to solve some of the major problems that the food delivery space has been suffering from. The stock prices of the topmost food distributors, US Foods, and Sysco has been rising since last year. It was the same time when Amazon had taken over Whole Foods. But, since then, the two food distribution companies have not made any effort to change the business model to be able to compete with mega companies like Amazon.
Companies such as Amazon are pushing their services, and it is excellent news for the consumers that buy directly from them. The problem lies with the foodservice distribution sector that has not been able to get the attention and also the money to be able to serve their customers. A lot of times, food preparation facilities such as hotels, restaurants, school, catering companies and also business cafeterias are unable to procure ingredients to cook food for their consumers. It is no doubt that this market has enormous potential but is mostly being ignored. These food preparation companies depend on distributors from where they get their fresh ingredients. But the distribution system is highly ineffective and the price of ingredients varies drastically and has some limitations.
The need for the hour is a highly developed platform where the food businesses can browse the products through catalogs of the distributors and also place their orders online. The distributors can then make the delivery while maintaining the quality of their ingredients. There are more B2B distribution platforms needed, and start-ups should think of creating such platforms that can get a huge amount of investments. Since the industry already has low margins, it becomes difficult for them to add new technologies to their investment and has only a few players in the market. But, there is a lot of opportunities that can be explored and it would be great for the food preparation businesses.