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Industry Updates

Understanding the intricacies of our supply chain is crucial to your success as a sales rep. We recently sat down with Marc A. Risser, President, and Rheanna Wadlow, Business Development Manager of Distribution 2000, our third-party logistics (3PL) partner, to gain valuable insights into how they support growth in the thriving natural and organic CPG market.

Market Dynamics and Opportunities

The natural and organic CPG market in the US has seen exponential growth, currently valued at approximately $65 billion. This trend, which gained momentum in the mid-2000s, shows no signs of slowing down. For Neolea, this represents a significant opportunity to capitalize on the increasing consumer demand for healthier, more sustainable products like our olive oils, balsamic vinegars, and sea salts. 

A 3PL provider can make the difference

One of the crucial requirements for capitalizing on that opportunity is to have an operation that is able to efficiently fulfill wholesale orders. The relationship between 3PL providers like Distribution 2000 and brands such as Neolea is instrumental in navigating the complexities of the CPG market. 

It’s good to understand that the expertise and service level of a 3PL provider has a direct impact on the availability and consistency of a brand’s product on store shelves. 

Ultimately, this goes beyond operational efficiency by enhancing a CPG brand’s market competitiveness.

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How Distribution 2000 differentiates

During the conversation, Marc and Rheanna highlighted the key differentiating factors they offer to CPG brands like Neolea:

1. Specialized Focus: Since 2005, Distribution 2000 has strategically aligned itself with the natural and organic food sector. This specialization allows them to understand and meet the unique requirements of products like ours, ensuring optimal handling and storage.

2. Central Location: Based in Chicago, Distribution 2000 leverages the city's robust transportation infrastructure to facilitate timely and cost-effective nationwide distribution. This central positioning is crucial for maintaining our competitiveness in the fast-paced CPG market.

3. Flexible Fulfillment: One of the key services that sets Distribution 2000 apart is their expertise in loose case picking. This allows for the breakdown and reassembly of products to meet specific order requirements - a vital service for a diverse wholesale customer base - 

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Future Outlook

The CPG industry faces numerous challenges, particularly the pressures exerted by major distributors like KeHE and UNFI. These distributors are constantly seeking ways to control costs, which in turn affects the operational dynamics of CPG brands. Rheanna Wadlow observed that many CPG founders find it increasingly difficult to navigate these pressures, highlighting the importance of efficient and reliable logistics partners like Distribution 2000 in alleviating some of these operational burdens.

Moreover, the rise of e-commerce and the need for rapid order fulfillment have transformed customer expectations. Both executives pointed out that meeting these demands often requires specialized providers who can turn around orders within 24 hours, a service that Distribution 2000 has strategically chosen not to focus on in specific areas, leaving other segments to more specialized providers.

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Conclusion

Distribution 2000 exemplifies how a focused and strategically aligned 3PL company can play a crucial role in the dynamic CPG industry. The company has positioned itself as a vital partner for CPG brands like Neolea.

As the CPG industry continues to evolve, the role of innovative and adaptable 3PL providers will become even more critical. Companies like Distribution 2000 will be at the forefront, helping brands meet the ever-changing demands of the market while maintaining efficiency and competitiveness.

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