Many consumers want the convenience of frozen foods for safe and easy food preparation options. According to a recent analysis from Grandview Research, the U.S. frozen food market was valued at $55.8 billion in 2021, and is expected to grow by a compound annual growth rate (CAGR) of 4.7% through 2030. The frozen food market has continued to grow for multiple reasons, including an increase in disposable income, more urbanization and the desire for additional food options by consumers.
While distributing frozen food can be lucrative, it is critical for companies to effectively plan and execute strategies for the distribution of cold food. Doing so can help you comply with the food safety rules and regulations and protect both your consumers and your business. Here are some strategies to keep in mind for your cold food distribution business.
Know the Industry Requirements
The new food safety rules issued by the Food and Drug Administration under the Food Safety Modernization Act (FSMA) apply to all of the parties involved in the distribution of cold food, including shippers, freight brokers, and transportation companies. You need to understand these rules to keep in compliance to avoid potential liability, stiff fines and potential freight broker bond claims regardless of the role you play in distributing cold food.
These rules govern record-keeping, vehicle requirements, operational requirements, training, and more. Under these rules, freight brokers are treated the same as shippers, so they must comply with the sanitary transportation rule to meet their legal obligations. The sanitary transportation rule for cold foods includes the following components:
- Vehicles and equipment must be temperature-controlled and regularly cleaned and sanitized between shipments.
- Ready-to-eat and frozen products must be kept separate from raw foods.
- All shippers and freight brokers must keep records showing they provided temperature and safety specifications to the carriers and must retain those records for a minimum of 12 months.
Making sure you understand the rules and how they apply to your company is critical for avoiding liability and potential harm to consumers.
Develop Local Markets for Refrigerated and Frozen Foods
Distributing refrigerated and frozen foods to retailers in your area is a good way to build name recognition and customer loyalty. Start by identifying establishments in your area where your products would fit and will likely sell. Develop a delivery plan for your frozen foods that is convenient and fast while still adhering to food safety requirements.
Consider Specialty Food Stores
If your refrigerated and frozen foods fall within the specialty food niche, make sure to contact specialty food stores and distributors. For example, if you offer organic frozen foods, you should reach out to organic food chains to try to place your product in their stores. Make sure to assess the products you are offering to determine the specific categories they could fall in within a specialty food store.
Consider E-Commerce Sales
Many companies have set up e-commerce sites to reach greater customer bases and sell their products. E-commerce is increasingly popular among consumers because of the convenience offered by online shopping. If you choose to establish an e-commerce store for your frozen foods, you will still need to ensure you have safe distribution channels available to ship your foods to where they need to go. Instead of setting up your own e-commerce site, you could also sign up to sell your products on other online e-commerce platforms like eBay and Amazon.
Social media platforms offer a great way to sell your food products and gain new customers. For example, you can set up a shop on Instagram or Facebook and tag your social media store whenever you post about your product. If someone then clicks on your tag, they will be taken to your store's product page so that they can purchase the food products you are selling.
Work With a Freight Broker
While there are many ways to build your frozen or cold foods business, you also need to ensure you have the right distribution channels in place to safely deliver your products to their destinations. While you can try to contract directly with transportation carriers to distribute your food, working with a freight broker might be easier. Freight brokers work with both shippers and transportation carriers and help connect them so that loads can be safely delivered on time.
Freight brokers must also obtain freight broker licenses and BMC-84 freight broker surety bonds, allowing you to feel secure. If a broker fails to pay the transportation carrier for delivering your foods or violates other regulations, a claim can be filed against their freight broker bond. The surety company will pay a valid claim and then seek reimbursement from the freight broker.
Working with a freight broker might also make it easier to find a carrier who is willing and able to transport your frozen foods on time. The freight broker can help ensure the company has vehicles that meet the temperature control and sanitation requirements to help prevent the potential of foodborne illnesses associated with the foods you sell.
Developing effective strategies for a cold food distribution business can take some time and careful planning. However, if you take the time to understand your obligations under the FSMA and work to identify potential distribution channels for selling your goods, you could take advantage of the growing popularity of the frozen foods market. Working with a freight broker can help ensure that your frozen foods will be distributed on time to their destination stores and that they will remain safe during transit, helping you alleviate any concerns you might have.