Thinking about produce wholesaling for restaurants and shops? The U.S. fruit and vegetable wholesaling market is roughly $109.0 billion in 2025, with a projected -0.8% CAGR through 2025, underscoring intense competition and the need to differentiate [1]. At the same time, foodservice sales rebounded to $2.6 trillion in 2023, with food away from home accounting for 58.5% of spending and per capita purchases of $3,923, signaling resilient demand [2].

Key Takeaways

– Shows a $109.0 billion fruit and vegetable wholesaling market in 2025, with a -0.8% CAGR through 2025, demanding efficiency and differentiation [1]. – Reveals foodservice sales rebounded to $2.6 trillion in 2023, with food away from home at 58.5% of spending and $3,923 per capita [2]. – Demonstrates 78% of Gen Z and 75% of millennials increased fresh produce consumption, while 59% are open to trying new, innovative items [3]. – Indicates grocery prices rose roughly 35% over five to six years, pushing restaurants and retailers toward local, value-added, higher-margin convenience formats [3]. – Suggests consolidation pressures in 2025 urban hubs, as D.C.’s Union Market wholesalers diversify customers and products to survive redevelopment and rising rents [5].

Why produce wholesaling appeals in a $2.6T foodservice rebound

Restaurants, caterers, and institutional operators have returned to growth territory, with U.S. foodservice sales hitting $2.6 trillion in 2023 as consumers devoted 58.5% of food dollars to eating away from home [2]. Per capita foodservice purchases reached $3,923, creating a broad, recurring demand stream for fresh ingredients that wholesalers can tap if they align with menu needs and delivery schedules [2].

For a wholesaler targeting restaurants and shops, these figures matter because they reflect throughput: more away‑from‑home meals generally translate into higher volumes of lettuce, tomatoes, onions, herbs, and value‑added cuts moving through distribution centers [2]. That volume can support route density and reduce per‑stop costs when managed with disciplined logistics and inventory control [2].

The size and trajectory of produce wholesaling in 2025

IBISWorld estimates U.S. fruit and vegetable wholesaling revenue around $109.0 billion in 2025, but projects a -0.8% CAGR through 2025, signaling a mature, efficiency‑driven market rather than a high‑growth field [1]. Competitive pressure is intense, with analysts emphasizing the need for technology that improves inventory transparency, shrink control, and freshness to maintain service levels and protect margins [1].

Industry structure also shapes strategy. California is a major hub for sourcing and distribution, while imported categories face tariff exposure that can affect pricing and customer contracts, especially for seasonal menus [1]. IBISWorld also notes increased value‑added products—trimmed, pre‑cut, and ready‑to‑use—that let wholesalers differentiate beyond commodity pricing in a crowded landscape [1].

Retail and foodservice buyers are nudging suppliers toward convenience SKUs. Industry experts cite expanding demand for pre‑cut, pre‑washed items and organics, categories that typically carry better price realization than raw bulk, creating a path for margin lift if execution and waste control are tight [4]. Leveraging this product mix can make a new entrant more resilient amid slow topline industry growth [4].

Consumer shifts driving product mix and pricing

Consumer behavior is tilting in favor of fresh produce. In a 2025 survey of 1,050+ U.S. consumers, 78% of Gen Z and 75% of millennials said they increased fresh produce consumption year over year, and 59% said they are open to trying new produce, pointing to experimentation and discovery opportunities for wholesalers and their customers [3]. That openness supports rotating assortments, seasonal features, and chef‑driven specials that rely on steady supply [3].

Inflation is reshaping choices. Grocery prices are about 35% higher over the past five to six years, sharpening the value equation and making portion control, waste reduction, and labor‑saving prep more important to restaurants and retailers [3]. Buyers are looking for local when possible and for value‑added items that save labor back‑of‑house, such as diced onions or salad blends that reduce prep time and shrink [3].

Trends for 2025 reinforce convenience and premiumization where justified. Observers highlight growth in value‑added time‑savers and organics, plus the role of social media in creating viral item spikes that buyers expect wholesalers to supply quickly [4]. Retailers and foodservice operators increasingly ask suppliers for pre‑cut, pre‑washed products that can command higher margins, rewarding distributors who manage cold chain, yields, and demand forecasting effectively [4].

Logistics realities: consolidation, location, and resilience

Real estate and route geography matter. Reporting from Washington, D.C., shows how redevelopment and rising rents at Union Market have displaced many traditional wholesalers, with remaining firms adapting via customer and product diversification to stay viable [5]. The case underscores how urban consolidation and location shifts can stress distribution, making flexible models and multi‑use facilities crucial for last‑mile efficiency [5].

Upstream dynamics also influence risk. California’s role as a major produce hub concentrates sourcing advantages but exposes distributors to weather, water, and transport volatility; imported categories can add tariff risk to pricing and contracts [1]. New entrants should weigh proximity to customers against facility costs and consider cross‑docking or shared cold storage to protect service levels if neighborhoods gentrify or lease terms tighten [5].

A data‑driven entry plan for produce wholesaling

Anchor your opportunity sizing to demand signals. With U.S. foodservice sales at $2.6 trillion in 2023 and 58.5% of spending away from home, restaurant and institutional channels present consistent volume for fresh items if you can meet service windows and quality specs [2]. Per capita spending of $3,923 indicates a large base that can support route density when territories are thoughtfully drawn and account mixes balanced [2].

Select a defensible product mix. Consumer data show 78% of Gen Z and 75% of millennials increased fresh produce consumption, and 59% are open to trying new items—ideal conditions for rotating seasonal specialties alongside staples [3]. Pair commodity lines with value‑added SKUs (pre‑cut, pre‑washed, meal‑kit components) that buyers want for labor savings and consistency, categories that industry sources say can sustain better pricing [4].

Design for margin through operations. IBISWorld highlights technology that improves inventory visibility and freshness; use temp‑logging, batch tracking, and dynamic par levels to cut shrink and stockouts that erode profitability in a low‑growth market [1]. Build menus and planograms with customers to align deliveries to forecasted covers and promotions, cushioning volatility tied to tariffs or weather on imported items [1].

Position strategically in your metro. The Union Market experience shows urban redevelopment can displace legacy wholesalers; prioritize flexible industrial spaces and contingency pathways—alternative docks, shared cold storage, and diversified route plans—so rent spikes or zoning shifts don’t strand your operation [5]. Diversify customers across restaurants, retailers, and caterers to avoid concentration risk if a neighborhood’s business mix flips [5].

Lean into differentiated demand. Value‑added and organic lines are expanding, and social media can create viral demand surges; maintain a fast‑turn “innovation” slot for new items and promote them with chefs and produce managers who want to trial emerging SKUs [4]. Support this with small‑lot sourcing and rapid feedback loops, then scale winners into standing orders as data accumulate [4].

Compete while growth is flat. The industry’s -0.8% CAGR through 2025 implies no easy growth; efficiency, route density, and service reliability become your differentiators, not price alone [1]. Align with buyers’ need for convenience SKUs and local stories, and exploit per capita foodservice spending levels that keep the order cadence high even when consumers tighten grocery budgets [2].

Sources:

[1] IBISWorld – Fruit & Vegetable Wholesaling in the US – Market Research Report (2015-2030): www.ibisworld.com/united-states/industry/fruit-vegetable-wholesaling/978/” target=”_blank” rel=”nofollow noopener noreferrer”>https://www.ibisworld.com/united-states/industry/fruit-vegetable-wholesaling/978/

[2] The Packer (USDA data) – Foodservice business booming again, USDA says: www.thepacker.com/news/foodservice/usda-foodservice-business-booming-again” target=”_blank” rel=”nofollow noopener noreferrer”>https://www.thepacker.com/news/foodservice/usda-foodservice-business-booming-again [3] The Packer – Fresh Trends 2025: Driving demand in an age of uncertainty: https://www.thepacker.com/news/retail/fresh-trends-2025-driving-demand-age-uncertainty

[4] Produce Market Guide – 10 produce trends for 2025: www.producemarketguide.com/news/10-produce-trends-2025″ target=”_blank” rel=”nofollow noopener noreferrer”>https://www.producemarketguide.com/news/10-produce-trends-2025 [5] The Washington Post – The last wholesalers of Union Market: www.washingtonpost.com/dc-md-va/2025/07/27/dc-union-market-wholesalers/” target=”_blank” rel=”nofollow noopener noreferrer”>https://www.washingtonpost.com/dc-md-va/2025/07/27/dc-union-market-wholesalers/

Image generated by DALL-E 3