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Food reaches stores through different arrangements for aggregation, inventory, transportation, and store-level work. Direct-to-store delivery sends a supplier’s products to retail locations; wholesalers consolidate food and distribution for business buyers; and regional food hubs coordinate supply from multiple local or regional producers. None is universally best or cheapest: the fit depends on the product, buyer, scale, geography, and who can manage the work.
How the three food distribution models differ
The key distinction is where products are combined and staged, who organizes transportation, and whether the retailer or supplier handles work at each store. The names describe different functions, not always mutually exclusive routes: a producer can sell through a food hub, a hub can work with distributors, and a retailer can use both its own distribution centers and direct deliveries for different products.
| Model | Typical flow and function | Potential fit | Questions to resolve |
|---|---|---|---|
| Direct-to-store / direct store delivery (DSD) | A supplier or its distribution operation delivers to retail stores, bypassing the retailer’s central distribution center. Supplier-side store visits may include sales and stock or ordering work. | Suppliers and retailers with a reason and capacity to serve individual locations directly. | Can the supplier support store-by-store routes and visit cadence? Who handles receiving, stock checks, orders, shelf work, and returns? U.S. DOT report |
| Wholesale | A wholesaler assembles, stores, and transports food to retailers, restaurants, institutions, government agencies, and other business customers. | Suppliers seeking consolidated distribution, or buyers needing products from business suppliers. USDA ERS | Is the intermediary a merchant wholesaler, a manufacturer’s sales branch, or an agent or broker? What assortment, order size, and service terms apply? |
| Regional food hub | A business or organization actively aggregates, distributes, and markets source-identified food, primarily from multiple local and regional producers, to serve wholesale, retail, or institutional demand. | Producers needing coordination to reach larger buyers and buyers seeking aggregated regional supply. | Can the hub assemble sufficient supply consistently? Who coordinates food safety, packaging, logistics, and buyer relationships? USDA AMS guide |
What direct-to-store means in practice
In this comparison, “direct-to-store” generally means direct store delivery (DSD): the supplier delivers to individual retail locations instead of routing product through the retailer’s distribution center. This is different from direct-to-consumer sales, where a producer sells to the final consumer. USDA’s local-food glossary distinguishes direct-to-consumer channels from intermediated channels. USDA National Agricultural Library glossary
Because delivery is store by store, the supplier’s route and store-facing responsibilities matter. A U.S. Department of Transportation research report describes DSD drivers combining delivery and sales functions, making recurring store visits, checking stock, and handling store-level ordering activity. That does not mean every DSD supplier stocks shelves: the division of work varies by supplier and retailer.
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- Supplier-side questions: Is there enough route density and delivery capacity to serve the required locations and cadence?
- Store-side questions: Who receives the shipment, checks inventory, places orders, handles returns, and performs any shelf work?
- Retailer-side question: Does delivering this category directly make sense alongside the retailer’s distribution-center operations?
What wholesale includes—and what the term does not tell you
Wholesale distribution is not one organizational structure. USDA Economic Research Service describes three principal intermediary types:
- Merchant wholesalers buy and resell products.
- Manufacturer sales branches and offices distribute products for their own company.
- Agents and brokers arrange sales and typically do not own or physically handle the food.
In the 2022 Economic Census, merchant wholesalers accounted for 55% of grocery wholesale sales, manufacturer sales branches and offices for 27%, and agents and brokers for 18%. These figures describe grocery wholesale sales, not all food distribution and not the market shares of the three models in this article. USDA ERS: Wholesaling
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The distinction matters operationally: an intermediary that buys and stores goods has different inventory responsibilities from one that only arranges a sale. Ask which entity takes title to the food, where it is held, who transports it, and what the buyer’s assortment and service requirements are. Some retailers also operate their own distribution centers to manage inventory, costs, and supply-chain efficiency. USDA ERS: Retailing
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What a regional food hub does
A regional food hub is more than a warehouse. USDA Agricultural Marketing Service defines it as: “A regional food hub is 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.” The definition highlights active coordination and identified sourcing as well as physical movement. USDA AMS, Regional Food Hub Resource Guide (2012)
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By combining supply from multiple producers, a hub can connect farms to buyers whose volume or consistency needs may be difficult for one producer to meet alone. The hub’s role can include coordinating producer supply, distribution, marketing, and buyer relationships; the exact services depend on the organization. USDA’s Food and Nutrition Service also describes food hubs in connection with local food access and farm-to-school systems. USDA FNS (December 19, 2023)
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- Identify the buyer and product requirements. Specify destinations, order sizes, delivery cadence, assortment, handling needs, and any sourcing or traceability expectations.
- Locate aggregation and inventory. Determine whether products remain with one supplier, are assembled by a wholesaler, or are coordinated from multiple regional producers. Clarify who owns or manages inventory and where it is staged.
- Map transportation and store work. Establish who arranges transport, delivers to a distribution center or individual stores, and handles receiving, stock checks, ordering, shelf work, and returns.
- Check operational capacity. Assess whether suppliers, intermediaries, or hubs can meet the required volume, route coverage, consistency, packaging, and food-safety responsibilities.
- Allow for a combined chain. A hub may coordinate supply and work with distributors, while a retailer may use both distribution centers and direct-store arrangements by category. USDA AMS describes hubs working with distributors, processors, wholesale buyers, and consumers.
What the 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% over that period. This is market context for merchant-wholesaler sales, not evidence that wholesale outperforms DSD or food hubs on cost, freshness, or service. USDA ERS: Wholesaling
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