Distribution Systems

Distribution Systems3YOU SHOULD BE ABLE TO:Summarize the various distribution systems in the hospitality industryDifferentiate sources’, intermediaries’, and retailers’ involvement in the supply chain.Distinguish between the economic values added to products and services as they journey through the channel of distribution.DISTRIBUTION SYSTEMThere are approximately 945,000 foodservice operations and about 48,062 lodging facilitiesA typical nonchain hospitality property uses about 10-12 suppliers; multi-unit uses 6-8.THE CHANNEL OF DISTRIBUTIONPRIMARY SOURCESFoodGrowersManufacturersProcessorsBeer, Wine, Distilled SpiritsBrewersWinemakersDistillersFurniture, Fixtures, and Equipment (FFE)The manufacturerFOOD INTERMEDIARIESDistributorSpecialty distributorFull-line distributorBroad-line distributorBrokersManufacturer’s RepresentativesManufacturer’s AgentsFOOD INTERMEDIARIES (CONT.)CommissariesWholesale clubsCash-and-carryBuying clubs or price clubsCo-opBEVERAGE ALCOHOL INTERMEDIARIESImporter-wholesalersDistributorsAlcohol Beverage Commission (ABC)FFE INTERMEDIARIESDealersBrokersDesignersArchitectsConstruction contractorsDistributorsLeasing companiesSERVICES SOURCESFew large national sources existMost are localFranchisees of a national firmECONOMIC VALUES ADDED TO PRODUCTSTime ValueForm ValuePlace ValueInformation ValueSupplier Services Value