Does your growth depend on too few distributors, depots or products? Focus on foodservice sales concentration
Revenue is growing and targets are being met. Yet one question deserves attention: how much of that momentum would remain if a major distributor slowed down, an important depot reduced its purchases or a key product declined?
Analysing foodservice sales concentration helps sales leadership understand its dependencies. The goal is to protect existing growth drivers while identifying opportunities that could broaden the base of growth.
1. Distinguish foodservice sales concentration from growth concentration
A partner may represent a large share of revenue while contributing little to its recent increase. Conversely, a smaller distributor may account for a substantial share of additional sales.
Measure sales share and contribution to change separately. For the latter, first examine differences in value or volume between two comparable periods. If total growth is close to zero, percentage contributions can become difficult to interpret.
A portfolio with diversified revenue can still rely on a single driver for growth. This distinction changes priorities: protecting the existing base and broadening sources of development are complementary tasks.
2. Analyse the level that reveals the dependency
A distributor-level view is a starting point. It may, however, hide concentration in a few depots or a handful of products. Analyse these levels where data quality and coverage allow.
Do not simply add the exposures together. A product’s sales in a depot are already included in that distributor’s sales. Adding all three amounts would count the same activity more than once.
Instead, identify overlapping dependencies: for example, a leading product sold mainly through one depot belonging to a major partner. This helps pinpoint situations that deserve a commercial discussion.
3. Understand what explains the concentration
High concentration is not automatically a problem. It may reflect relevant specialisation, a strong partnership or the structure of the market itself. The diagnosis also depends on purchasing stability and the alternatives available.
Examine the causes: a recent agreement, an exceptional campaign, limited distribution elsewhere, a highly specific use or a deliberate focus on one partner. Separate lasting drivers from events that may not be repeated.
Our article on weak signals to monitor in sell-out data complements this monitoring. An account’s weight and the trend in its orders should be considered together.
4. Test a simple slowdown scenario
Choose an explicit assumption, such as a hypothetical 10% decline in one partner’s sales. This figure is used to test sensitivity; it is neither a forecast nor a probability.
In a purely illustrative example, if that partner represents 30% of sales, a 10% decline within its scope corresponds to 3% of initial total sales, all else being equal. This estimate does not account for possible switching or indirect effects.
The scenario makes exposure easier to understand without claiming to predict the future. Use it to discuss protective actions and the time needed to develop other sources of growth.
5. Prioritise realistic growth opportunities
Start with opportunities close to existing strengths: comparable depots with limited activity, complementary products or customer groups whose needs match the offer. Assess the resources required before multiplying initiatives.
At the same time, protect current growth drivers through effective follow-up, availability, an understanding of usage and preparation for commercial milestones. Diversification takes time; maintaining strong partnerships remains essential.
End the review with a small number of decisions assigned to owners, with a timeline and indicators. Discover KaryonFood to understand the structure of your sales more clearly and inform your development priorities.
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