Food Distribution Due Diligence

December 15, 2025

by a searcher from Northwestern University - Kellogg School of Management in Chicago, IL, USA

I am submitting an LOI in this week for a food distribution company that is off market. We have already set and agreed on price through an informal IOI I sent him. Currently just working with his CPA on a couple of items. Is there any due diligence specifically with a food distributor that I should be aware of? I am looking for anyone who has purchased a food distribution or related distribution company. Looking back through your DD, what are some of the things through the DD period that you wish you had dug into more or perhaps overlooked? Anything specific to food distribution you know about now that you would look into that isn't part of the typical DD roadmap? Feel free to chime in here or PM me. Thanks in advance.

Reply by a professional
from Stanford University in Healdsburg, CA 95448, USA

Your primary consideration should be the supplier base and how robust the contracts are there. Other than that, get as many years of financials by month as you can and search (and control for) seasonality in assessing how stable the business operations are. Some of this may vary greatly depending on what segment of the food distribution category the business is in. Those two areas will likely lead you to the next logical questions. As far as business operations, distribution is generally a game of cost containment, and a big issue to be looking for is what equipment, facilities, warehousing, etc., the business may have that isn't being effectively utilized. Good luck!

Reply by a professional
from American University in Irvine, CA, USA

Hi, Ray: I represented a local food distribution company in a sale to a PE fund a couple of years ago. Happy to discuss due diligence issues with you, or send you a copy of our due diligence checklist that we used in that transaction. DM me here, or email me at redacted if that would be of interest to you.

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