Retail Vs. Foodservice Revenue Split?
Mike Levinson, RD
The concise, to the point, no BS, in your face approach to foodservice and alternative channels
The revenue split between foodservice and retail can differ greatly depending on the specific sector, products, market trends and business strategies. But as a rough rule of thumb, CPG (Consumer Packaged Goods) brands in the food sector might expect a revenue split of 70% to 80% from retail channels and 20% to 30% from foodservice channels.
This split is based on the fact that retail channels normally offer a larger reach and sales volume. Supermarkets/grocery stores as well as big box retailers and online platforms, for example, serve a broad consumer base and often generate consistent sales year-round. Meanwhile, foodservice channels, notably convenience stores, colleges/universities, micro-markets, restaurants, and many other tentacles may enable higher margins per unit sold, but tend to require a more complex distribution and marketing strategy. As such, they can be more exposed to fluctuations in consumer demand.
The right revenue split between foodservice and retail will be influenced by factors such as the product portfolio, target market, competitive landscape and broader business objectives of the CPG brand. It’s crucial for organizations to continually assess market conditions and adapt their approach accordingly to ensure that they are maximizing revenue and profitability.
So instead of focusing 100% on retail sales, dedicate 20-30% on the different foodservice octopus tentacles.
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Founder, Elite Commerce Group | E-Com & Retail Media - Amazon, Walmart, Instacart, Criteo | Banned from Chuck E. Cheese | USMC Combat Vet
1 年Just read through Mike. Would you say that food service is less saturated? Just working with a lot of Brands, they are all heavily focused on retail, but relatively few seem to put a lot of effort into food service.