Sales among the top 100 foodservice equipment and supplies dealers totaled $15.74 billion in 2024, which is up 3.84% from 2023, according to the FE&S 2025 Distribution Giants study. Among the dealers reporting their sales data, 53% showed an increase in revenue while 47% showed a decline

What was the operating environment like for foodservice equipment and supplies dealers in 2024? “The easiest way to put it would be mixed,” says Eric Schmitt, president, Rapids Wholesale Equipment, an Iowa-based foodservice equipment and supplies dealer.

Indeed, an air of uncertainty hung over the foodservice industry for parts of 2024. “The more I talked to developers, they said they were waiting to see how things were going to turn out in the election,” says Schmitt. “Nobody seemed as certain as they were in the past.”

While industry context remains important, dealers needed to remain focused on what truly drives their businesses to best understand the impact of various industries on their specific organizations. “We focus on the full sales cycle. You have your marketing, your pipeline, your bookings and then your sales. We are tracking bookings more carefully than revenue,” Andy Starr, CEO of Boston Showcase Company, a Massachusetts-based food service equipment and supplies dealer. “We do that because bookings lead to revenue. We had a better year for bookings in 2024 than we did in 2023.”

Still, there were some bright spots in 2024. “Public spending still seemed to be up. The K-12, colleges and other big institutional projects were still moving ahead,” Schmitt says.

Chain work, too, remained consistent for some dealers. “New unit openings are matching what the chains are saying they will do,” says Eric Boelter, president, The Boelter Companies, a Waukesha, Wis.-based foodservice equipment and supplies dealer. “A few years ago, that was not the case. Some chains would only hit 60% of their target.”

2025 Outlook

Despite last year’s uncertainty, 2025 seemingly has gotten off to a solid start from the dealers’ perspective. “The first couple of months in 2025, that pensiveness is gone. There’s been a lot of design contracts coming in,” Schmitt says.

It’s a sentiment Starr shares. “In the greater Boston area, we are insulated from some of the ups and downs the rest of the country experiences,” he says. “We have a showroom with tons of tabletop items on display and people are starting to come in more so they can see, touch and feel these things. They want to put them together on a table to see what they look like together. People are coming for product demos, too. So, from our outlook, things look really strong.”

In some instances, last year’s uncertainty may become this year’s momentum. “We wrote a ton of projects last year, but some experienced delays,” Boelter says. “So, we are not realizing that revenue as fast as we had thought. But our backlog looks really strong this year.”

Despite these good vibes, there could be some clouds of disruption on the horizon, namely in the form of higher equipment and supplies costs due to the evolving international business climate, including potential tariffs on items like stainless steel, aluminum and component parts produced in other countries. “It’s pricing availability uncertainty,” Boelter says. “Customers want consistent availability. And we are trying not to react. We are trying to work with our customers.”

This is where strong working relationships among the various links on the supply chain come into play. “We definitely have placed a higher degree of importance on forging good relationships with vendors and our local reps,” Starr says. “We have a manufacturers’ rep of the year award that we give out. And we tell our sales and design people to work closely with them. There’s so much we can do with those partnerships.”

Communication becomes critical during uncertain times like these, too. “You have to talk to your manufacturers to see how they will approach it,” Boelter says. “Some are starting to build inventory. Others are not building inventory and may have to push those costs through the channel.”

Adds Starr, “All we can do is make our customers aware. And I think everyone is aware. I don’t think people can be too surprised by this. We did change the language on our quotes to reflect the current uncertainty in the market.”

It would appear that some members of the supply chain are taking a proactive stance on potential challenges and applying lessons they learned during the COVID-19 pandemic and in the first few years afterward. “As soon as the information about the tariffs came out, we heard from some factories outlining what they knew, including how long they might be able to hold prices,” Schmitt says. “That gives us a lot more assurances and we can think more critically about who we want to partner with. That said, these recent changes have highlighted there’s a volatility we can’t control.”

Technology

While much of the industry conversation pertaining to artificial intelligence has focused on the way operators use it to serve customers, dealers have been quietly making inroads in this area, too.

“It’s easy to be afraid of what AI can do, but you are missing out on a huge opportunity,” Schmitt says. “There’s economies of scale that can be generated for smaller dealers through tools built by AI. Whether it’s sales tools, operational tools or predictive analytics, there’s a lot of ways smaller dealers can act like bigger ones. For example, the things you can do with AI tools as a marketing professional, you can now do with two or three people what it took a team of 20 to do in the past.”

AI can also help dealers promote business continuity in certain situations. “An aging population also means more people are starting to retire. When they leave, a lot of institutional knowledge leaves with them,” Schmitt says. “Now there’s ways to memorialize and use that information that were not possible in the past. You can record a meeting and bullet point the content before turning it into training materials.”

In addition to scaling their businesses, dealers will continue to leverage AI to drive efficiency in their organizations. “We need to be smarter, more efficient so we can continue to scale our business,” Boelter says. “You can reinvent your business by tearing it down and completely rebuild it or you can use AI to process those repetitive things that need to be done.”

Changing Customer Expectations

Customer expectations have never been higher. And what they want most, all of the dealers agree, is information.

“Each segment is a little different, but across the board, increasingly they want access to the same information we have,” Boelter says. “They want to know when things will ship and when it will arrive. They want that digitally. National accounts and multiunits want all sorts of information available to them on demand and they want a portal where they can pull up that information. They want the details to analyze. From a cost side, our IT budgets are way above what they have been, and Boelter has traditionally invested quite a bit in this area.”

“On the project side, there is a need for higher-end BIM drawings,” Starr adds. “And we have a top-notch design team.”

Despite the influx of technology, operators still want to be seen and heard. “Customers want honesty, transparency and good pricing, which is what we have always provided,” Starr says. “By staying the course, we have been able to enhance our brand integrity within the market. We’ve always done what customers are looking for now. We have always viewed ourselves as a high-touch company. And as there has been more consolidation in the industry, that’s worked to our advantage.”

“At the end of the day we are in hospitality,” Starr adds. “Our customers’ job is to take care of people who are eating their food. And we want to make it easier for them.”

*FE&S estimate  **Revised 2023 sales number  H = Heavy Equipment  L = Light Equipment  SW = Smallwares  T = Tabletop  P/D = Paper and Disposables  J = Jan/San F = Furnishings