Utilizing Food Brokers in the U.S. Market – Jay Lee’s U.S. Report (135)

75% of Major Distribution Channels Use Brokers – Keys to U.S. Market Success”

Fast Placement via Network & Demand Insight Aids Market Expansion

Overreliance on Broker Marketing Reduces Control, Increases Fees

Handling Competing Products May Lead to Conflicts of Interest – Check Experience and Expertise

By Jongchan Lee, CEO of J&B Food Consulting

In the process of entering major U.S. retail chains, food brokers play a significant role. The U.S. is vast and has a highly diversified retail landscape, making it more efficient to use brokers than to attempt direct sales. In fact, statistics show that 75% of major retail entries are made through brokers, highlighting their critical importance in the U.S. market.

There are several advantages to using food brokers. First, they possess expertise in market trends. Brokers have deep insights into current market dynamics, consumer preferences, and industry demands. They help Korean businesses break out of their domestic mindset and make informed, data-driven decisions. They also provide valuable feedback from buyers, pricing strategies, and insights into competitive positioning, offering strategic advantages.

Second, brokers already have established networks that enable quick product purchasing and shelf placement. In mainstream white-dominated markets, there is often an unspoken cultural familiarity among white buyers and brokers. Asian and Korean newcomers often face cultural distance, making it difficult to build rapport with buyers or negotiate effectively. However, white brokers, being more culturally aligned and persuasive, can help secure better terms and shelf space. By outsourcing sales activities to brokers, companies can focus more on core business areas like production and product development.

Third, brokers can help expand into new regions or retail channels. Their wide-ranging connections allow them to introduce products into markets that may be difficult for companies to access independently.

However, there are downsides. Brokers typically charge a commission of 3–8%, which can reduce overall profit margins. Also, when companies rely entirely on brokers for product promotion or marketing strategies, they lose control over their brand and may become overly dependent on the broker’s performance.

Moreover, since brokers usually handle multiple brands, conflicts of interest can arise—especially if they represent competing products—potentially lowering their focus and commitment.

Finding the right food broker is a key factor in successfully entering the U.S. market. When evaluating brokers, their experience and expertise should be assessed. It’s especially important to confirm whether they have handled similar product categories before, and whether they have experience with Asian or Korean products. It's also important to determine whether they have a deep understanding of the target market and consumer base.

Additionally, asking for references from brands or companies they’ve previously worked with and reaching out for direct feedback can be very helpful. Rather than signing a large, long-term contract at the outset, it's wise to start with a pilot program or short-term contract to evaluate the broker’s performance.

Tag: #FoodBroker

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