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Jack Grealish is a student who studies mathematics at the University of California, Los Angeles. His father, Tom Grealish, who owns a small ethnic food store in East Los Angeles, an urban region within Los Angeles which is a young and bustling neighborhood. Tom sells premade food from his home country, Ireland, along with food from other neighboring regions: England, Scotland, Wales, and Northern Island. Tom carries a variety of products, both imported and locally made. Jack, who is fascinated by his father’s passion about food, has developed an interest in working for the food industry using his mathematics skills.
Jack spends summer in helping his father with the store. By helping his dad, Jack came to know a lot about the food industry and how a variety of regulations impact the industry. As a retail store, Jack and his father have an ability to purchase directly from the private labelers. In addition, they can purchase through the distributors, who hold products from different labelers. The prominent food distributors supplying in their geographical area are, US Foods Service, Sysco, and Gold Star.
For his understanding, Jack wanted to put together a depiction of the food production landscape. As shown in the Figure 1, the process starts with the raw material producers, primarily in agriculture. Slaughterhouses are the main sources for processing the meat and poultry products while produce would be processed through various processing facilities. The materials are then distributed to various channels using the distributors: food manufacturers, wholesalers, and retailers. The national and regional manufacturers are wholesalers who have buying power and can negotiate directly with the raw material producers. Occasionally, retailers might enter a negotiation for better prices, cutting out the distributors. The manufacturers gather raw materials from the producers as well as procure other materials in the market. They produce products which function as a raw material for another product or they can manufacture finished products which would be shipped for consumption. The wholesalers usually aggregate a large variety of products that they display for retailers. The retailers may buy in bulk from the distributors or wholesalers and sell it to the end consumers.
Figure 1. US food industry process channels
The food industry is under regulation of two separate entities: the Unites States Department of Agriculture (USDA) and the Food and Drug Administration (FDA). While the USDA handles poultry, meat, and shell eggs, the FDA handles seafood, vegetables, soft drinks, and other non-meat products. The USDA has a dedicated inspection service called the Federal Safety and Inspection Service (FSIS) that oversees the processing under their jurisdiction.