What margins do wholesalers and food service distributors typically expect, and how do these vary by product type and channel?

Distributor and wholesaler margins vary significantly by channel and product positioning:

**By channel:** - **Wholesalers** typically expect 10–25% depending on product type - **Off-trade** (bottle shops, retail) expect 25–40% - **Premium/super-premium products** sold by the bottle can command higher wholesaler margins, sometimes up to 30%, especially when distributed through specialist merchants like **Amathus**, **Venus**, **Ellis**, and **Hammonds**

**Gross profit implications for brands:** - Without a distributor: 50–60% gross profit target - With a distributor: 40–50% gross profit target

**Key dynamics members highlighted:** - Wholesalers and RTM teams are typically targeted on average gross profit across their entire book, not individual SKUs—so they'll accept lower margins on some products if the overall basket margin hits target - **On-trade (pubs)**: margins can vary within a single order (e.g., a mixer might carry higher margin while the spirit carries lower), as long as the overall blend works. This can be a useful negotiating angle when pitching new listings - For large contracted business, pricing is negotiated on total GP and multi-year supply agreements, not on a per-unit basis - **Brakes** (and similar major food service distributors): members asked about their specific margin expectations but no concrete answer was provided in this discussion

**Caveats:** Members noted that premium/super-premium exceptions exist where margins depend heavily on what you "can get away with." Fighting over per-case margins on commodities (e.g., 25p per case of mixer = £0.01 per serve) is common but often not economically worthwhile.