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Retail food service channels

Last updated on January 20, 2025

The retail market is for food services provided to local, regional and national retail stores.

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Key readiness requirements

Connect to the market channel

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

  • Through a broker or distributor 
  • Directly with a company or business

Price and costing model

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

Cost model

  • Your cost model needs to account for retailer margins, transportation and broker or distributor costs
    • Brokers generally charge a 3-10% commission
  • Retailer margins differ by retailer and what type of product is being sold
    • Ranges can be anywhere from 25-40%

Discounts for volume

  • Most retailers will require you to offer volume discounts. This includes sales, coupons and other promotions for your products. They’ll include this in the cost.
    • Take this into consideration when you’re working on your price model based on the volume you’re planning to sell 

Volume and quality

Make sure you have enough volume and you know what your product's quality is.

Have a guaranteed agreement with minimum delivery requirement, with late and short fees applicable 

  • Large retailers will expect volume to supply all stores

Marketing

Develop a marketing strategy

  • Listing fees (per product SKU, N/A for non-shelf stable products)
  • Listing Fee or Slotting Fee: a fee charged by the retailer to put your product on their shelf.
  • Negotiable between seller and retailer
  • Marketing program with a fee negotiated into agreement
    • Includes co-op advertising, discounts, shelf positioning, displays and demos

Labelling and packaging

Know the requirements to label and package your product.

Traceability standards

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:

 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

 

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