Will my food distribution customers stay after I sell?
Many food distribution customers buy on order, with no long contract, so they are free to leave. What reassures a buyer is evidence of continuity: account history, which relationships sit with reps and drivers rather than you, and a plan to introduce the new owner in stages.
Many foodservice and grocery accounts order as they need, without a contract; check which of yours do. That is why buyers ask the question you are asking. You cannot promise that every customer stays, and a buyer will not expect it. What you can do is show how the accounts have held and how you will help them move to the new owner. The whole sale is covered in selling a wholesale distribution business.
Show the account history
Prepare a list of customers with how long each has bought, what they buy and how their orders have moved over several years. Buyers read long, steady histories as a sign that service is why customers stay. Point out accounts that came through a change of chef, manager or owner and kept ordering. Keep the list confidential until the buyer has signed an agreement to protect it.
Show who holds each relationship
A buyer wants to know whether the customers are loyal to the business or to you personally. Mark each major account with the person who deals with it: you, a sales rep, a driver or an office staff member. Accounts held by staff are easier to hand over, so explain which staff will stay. For accounts that rest on you, plan how to introduce the buyer.
Introductions and a transition period
Agree with the buyer how and when customers will be told. Many sellers start with the largest accounts, with a joint visit or call, then move on to the rest once the sale is firm. Offer to stay on for a set period to answer questions and ride along on key routes. The length and terms of that period belong in the sale agreement, so ask your lawyer to draft it.
Timing the message
Telling customers too early can unsettle them or reach a competitor, and telling them too late can feel abrupt. Many owners tell key suppliers and customers only once the sale is certain, and then do it quickly and in person. Ask your lawyer and your broker, if you have one, when the agreement allows you to share news. Keep your service steady in the weeks before closing.
Related reading
12 pages on the same subject, grouped by topic.
Selling
- GuideSelling a wholesale distribution business in Canada
- GuideSelling a food and beverage processor in Canada
- GuideSelling a food and beverage DTC brand in Canada
- GuideSelling an auto parts wholesale distributor in Canada
- Expert answerDoes my Safe Food for Canadians licence transfer when I sell my food business?
- Expert answerHow do I handle my food plant’s co-packing customers during a sale?
Buying
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernmentWhat is succession planning?
- 02Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
- 03Business Development Bank of CanadaGovernmentHow to minimize negotiations when selling your business
- 04Business Development Bank of CanadaGovernmentHow to Find the Right Buyer for Your Business
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