If you’re a food and beverage brand owner, chances are you’ve heard of retail and foodservice. But what do these two terms mean, exactly? And how does one decide which segment is best for their FMCG (Fast Moving Consumer Goods)? We’ll break it down for you here so you can make an informed decision when choosing the best option for your brand!
When you think of retail, stores like supermarkets and convenience stores, come to mind. This means selling directly to consumers through physical locations or online retailers. Retail channels have the benefit of being easier to access due to their wide availability in most areas. Additionally, they provide the opportunity to reach large numbers of potential customers at once and have the benefit of providing a higher margin on products.
Foodservice, however, is a bit different but no less important for FMCG brands. Foodservice includes any type of restaurant or hospitality establishment serving customers food. This could include hotels, resorts, cafes, and more! It also includes institutions like hospitals and universities providing food to students and staff. One of the biggest advantages of targeting foodservice channels is that they are often willing to pay premium prices for high-quality goods due to the importance placed on quality ingredients in this industry. Additionally, many foodservice establishments are located in areas with large numbers of potential customers, which can increase your brand’s exposure!
When it comes down to deciding between retail and foodservice, it’s important to consider the pros and cons of each. Retail offers a wider reach and easier access for customers, yet can control the direction of the brand and can discount when they feel needed. Still, foodservice can provide greater product margins due to the increased demand for quality ingredients. Ultimately, it’s up to you to decide which segment is best suited for your FMCG brand!
So now that you know more about the differences between retail and foodservice, which one will you choose? Whichever option you decide upon, we hope this article has helped give you the information needed to make an informed decision. Good luck!
