Commercial food service channels

Connect to the market

There are different ways you can connect to the commercial food service market, including:

• Through a broker or distributor 
• Directly with a company or business
• Working with group purchasing organizations

Price and costing model

It's important to know what your costs are and how you will price your product.

• Cost model should include both:
  • The price when you deliver the product 
  • The price when the buyer picks up the product
• Cost model will differ if you are selling directly to the food service versus using a distributor. The distributor average margin is 25 to 35%
  • Your margin is calculated by dividing your profits to your selling price.

Volume and quality

Make sure you have enough volume for delivery and you know your product quality. 

• Have a guaranteed agreement with the minimum volume delivery requirement, with applicable late and short fees
  • Volumes are usually expected to be prepared in bulk

Marketing

Develop a marketing strategy.

Marketing fee

If you are working with a distributer, they can support you to market your product to hotels and restaurants. However, be aware this comes with an associated marketing fee. The percentage for this fee changes according to product category. It is usually included in your contract with the distributor.

Labelling and packaging

Know the requirements to label and package your product.

Traceability standards

• Labelling and packaging must meet traceability standards, including:
  • A traceability system to track and document the production, processing and distribution of your product
  • Universal Product Code (UPC) using the Global Systems of Standards (GS1)
  • Global Trade Item Number (GTIN)

Canadian Food Inspection Agency (CFIA) standards

• Labelling must meet CFIA standards. Generally this means:
  • Nutritional chart
  • Allergens
  • Ingredients
  • A best before date

Visit CFIA’s food labelling tool to understand more on product specific requirements.

Certifications and audits

Certifications

Make sure you have the right certifications, this might include:

• Food Safety Certified Hazard Analysis Critical Control Point (HACCP) 
• Good agricultural practices (primary agriculture only)
• Canadian Food Inspection Agency (CFIA) - Meat products and food animals
•  A Hold Harmless Agreement
  • This is a type of insurance that prevents businesses from being held legally responsible for losses or damages for which they might otherwise be considered liable
• Insurance with a minimum of $2M coverage for:
  • Occurrence
  • Products and completed operations
  • General aggregate
  • Umbrella liability

Audits

You might be audited by a retailer to make sure you have the correct certifications.

A large retailer might also conduct a social audit to make sure your company follows social responsibility standards and ethical practices in areas such as:

• Labor practices
• Environmental impact
• Occupational health

Resources

Tips for Getting Ready to Sell to Commercial and Institutional Buyers