Food reaches grocery stores through different combinations of aggregation, inventory, delivery, and store-level work. Direct-to-store delivery sends a supplier’s product to individual retail locations; wholesalers assemble and distribute food for business buyers; regional food hubs coordinate products from multiple local or regional producers. These models can overlap, and the right fit depends on the products, volumes, geography, buyer requirements, and who can manage the logistics.
How the three food distribution models differ
| Model | Typical flow | Who may use it | Key operating question |
|---|---|---|---|
| Direct-to-store (often called direct store delivery, or DSD) | A supplier or its distribution operation delivers to individual retail stores rather than routing the product through the retailer’s distribution center. | Suppliers and retailers with a reason to serve stores individually. | Can the supplier support store-by-store delivery and the required visit schedule, and who takes care of receiving and store-level work? |
| Wholesale | A wholesaler assembles, stores, and transports food to retail, food-service, institutional, and other business buyers. | Producers and manufacturers seeking consolidated distribution, and business buyers seeking a broader assortment. | Is the intermediary a merchant wholesaler, a manufacturer’s sales branch, or an agent or broker—and what service does the buyer need? |
| Regional food hub | A business or organization actively aggregates, distributes, and markets source-identified food, primarily from local and regional producers, to meet wholesale, retail, or institutional demand. | Regional producers and buyers who need coordinated supply from multiple producers. | Can the hub gather enough product consistently, and who coordinates packaging, food safety, logistics, and market relationships? |
The USDA Agricultural Marketing Service defines a regional food hub as “a business or organization that actively manages the aggregation, distribution, and marketing of source-identified food products primarily from local and regional producers to strengthen their ability to satisfy wholesale, retail, and institutional demand.” (USDA AMS Regional Food Hub Resource Guide, 2012.) That definition makes a hub more than a warehouse: it actively coordinates supply and market access.
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What happens in direct-to-store delivery?
Direct-to-store, commonly described as direct store delivery (DSD), means that product travels from the supplier or its distribution operation to individual retail stores instead of first going through a retailer’s distribution center. The arrangement can include repeated supplier visits. A U.S. Department of Transportation research report describes DSD drivers combining delivery and sales functions, checking stock, and handling store-level ordering activity (U.S. DOT, Food Distribution Supply Chain).
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- Who places and confirms orders, and how often stores are visited?
- Who checks stock, handles receiving, and manages any shelf work or returns?
- Can delivery routes serve individual locations reliably across the relevant geography?
- Does the supplier have the people and systems to coordinate many store-level orders?
What wholesale distribution covers
Wholesale is a broad business-to-business function, not one fixed operating structure. USDA’s Economic Research Service describes wholesalers as assembling, storing, and transporting food from manufacturers and processors to retailers, restaurants, institutions, government agencies, and other businesses (USDA ERS, “Retailing & Wholesaling — Wholesaling,” updated August 17, 2026).
Three kinds of wholesale intermediaries
- Merchant wholesalers buy and resell products.
- Manufacturer sales branches and offices distribute products made by their own company.
- Agents and brokers arrange sales and typically do not own or physically handle the food.
In USDA ERS figures from the 2022 Economic Census, merchant wholesalers accounted for 55% of grocery wholesale sales, manufacturing sales branches and offices for 27%, and agents and brokers for 18% (USDA ERS). These figures describe shares of grocery wholesale sales, not shares of all food distribution or a market split among DSD, wholesale, and hubs.
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Retailers may also operate their own distribution centers to manage inventory, costs, and supply-chain efficiency. A retailer-run center is not the same thing as an independent merchant wholesaler, even though both involve consolidation and distribution (USDA ERS, “Retailing & Wholesaling — Retailing,” updated August 17, 2026).
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A regional food hub brings together supply from multiple producers and coordinates distribution and marketing so buyers can access source-identified regional products. This can help when one farm or producer cannot individually meet a buyer’s volume or consistency needs. Hubs can serve wholesale, retail, and institutional channels; USDA materials also describe their role in connecting local producers with schools and other institutional markets (USDA FNS, “Food Hubs and Farm to School,” December 19, 2023).
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For a producer or buyer evaluating a hub, the practical questions include:
- What products and volumes can the hub aggregate, and how consistently?
- Who coordinates product specifications, packaging, food-safety requirements, and delivery?
- How are producer identity and regional sourcing communicated to buyers?
- Which relationships does the hub manage directly, and which involve distributors, processors, or other partners?
A hub can work with distributors, processors, wholesale buyers, and consumers; it need not replace every other link in the chain (USDA AMS).
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How to compare the models for a particular product
Instead of assuming one model is inherently cheaper or better, map the work and requirements for the product and buyer in question:
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- Identify the buyer and required service. A grocery chain, independent store, school, restaurant, and institution can have different order, delivery, and documentation needs.
- Set the aggregation requirement. Determine whether one supplier can fill orders or whether supply from multiple producers must be coordinated.
- Locate inventory and control. Establish who owns or manages the product, where it is staged, and who is accountable for inventory information.
- Map the delivery pattern. Compare individual-store routes with consolidated movements through a wholesaler or hub-coordinated distribution.
- Assign store-facing responsibilities. Specify who takes orders, receives deliveries, checks stock, handles shelf work, and resolves returns or delivery issues.
- Check sourcing and traceability expectations. Source identification is central to USDA’s food-hub definition; it is not a defining requirement of ordinary wholesale or DSD in the cited sources.
- Test the operating fit. Consider volume, route density, assortment, order cadence, geography, and the people and systems available to manage the work.
These models can be combined
The choice is not always one of three mutually exclusive channels. A producer might sell through a hub that coordinates supply with a distributor; a retailer might use its own distribution center for some categories and direct-store deliveries for others. The useful comparison is therefore about where aggregation, inventory, transport, and store-level work happen—not just the name assigned to the channel.
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What market figures can—and cannot—show
USDA ERS reports that inflation-adjusted sales by grocery and related product merchant wholesalers rose from $1,076 billion in 2002 to $1,364 billion in 2023, measured in 2025 dollars, an increase of 26.8% (USDA ERS sales series). This is market context for merchant wholesaling; it does not compare performance, cost, freshness, or service across the three models.
The cited sources do not provide an apples-to-apples comparison of total cost, spoilage, or service across DSD, wholesale, and regional food hubs. Any choice among them needs product- and route-specific operating information rather than a universal ranking.
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Product prices and availability are accurate as of the date/time indicated and are subject to change. Any price and availability information displayed on Amazon at the time of purchase will apply.
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