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About the National Food Exchange

The National Food Exchange was established to provide a standard pricing platform for the grocery wholesale industry.

Historically, prices that large retail supermarket chains pay for their goods have varied, sometimes greatly, from chain to chain. This is because it is to the manufacturer's advantage to charge as much money as possible for their products. They achieve this goal by creating disorder amongst grocery buyers at the chains using a costing system based on 'list price' minus confusing discount vehicles with code names such as 'accruals' 'scan deals' and 'bill-backs' which purport to save the chains money on the cost of their goods. In fact this system and these 'programs' serve simply to fool buyers and their managers at the chains into either not knowing what they are actually paying for goods or by being so complex that the buyers  become too tired or too overwhelmed to care.

In the 1960's from this environment evolved a multibillion-dollar industry known to grocery insiders as the 'diverting' industry. Grocery diverting has done its best to even out inefficiencies in the supply chain of grocery products whereby a network of small, privately held companies (diverters) buy truckloads of product from supermarket chains in one part of the country where the price is low and sell to chains in another part of the country where the price is high.

Although diverting has done its best to keep manufacturers from gouging retailers it has been limited for a couple of reasons. One is the desire of manufacturers reps to perpetuate personal, often self-serving relationships with grocery buyers. This comes at the expense of the very supermarket chains they are supposed to serve, and ultimately the consumer, who pays for this inefficiency at the checkout line. Another was the limited capacity for diverters to share cost information with chains prior to the Internet. With the advent of The National Food Exchange the veil of pricing secrecy has been lifted and the power is in the hands of the buyers.

The National Food Exchange centralizes, normalizes and reduces wholesale grocery prices.





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© National Food Exchange 2003