Buy & Sell Distressed / Salvage Food Products

Distressed or salvage food is food items that traditional grocery stores won’t or can’t sell. This is because food is near or past its expiration date, the can is dented or the label is torn, manufacturer overstock or products from damage or other insurance claims.

Business model
This business involves buying wholesale lots of salvage canned foods, dry goods, cereals, biscuits, drinks, sweets & chocolates and other food at steep discounts prices and then reselling it cheaper than what it sells in shops. This business is not limited to food items; other goods include cleaning supplies (damaged bottles of detergents, broken packets of soap powder etc.)

The market
This market is enormous in South Africa larger than even the secondhand clothing business. Most if not all are small businesses, while a few does rent retail spaces, most sell from flea markets or parking lot stalls. Go to any flea market or roadside stall selling distressed and salvage foods and see the business they do, the long lines of people clamouring for a bargain. In Cape Town you can see some examples at the Parow Market as well as in the Gatesville area parking lot stalls. Milnerton flea market also has one or two stalls selling salvage food.

While a lot of people focus on the higher end of the market, that is actually the “long tail” in South Africa, the big fat body is the market serving lower income earners and people dependant on grants. This is because the majority of people in South Africa live in poverty. Salvage and distressed food serves this market by making their limited income go further.

This market is so large that even multinationals like Shoprite & Checkers is getting in on it, their stuff that used to go to salvage are now being sold on discount tables at steep markdowns.

Safety issues
Now a lot of you are probably thinking aren’t some of these goods unsafe for consumption? Aren’t dented cans supposed to be poisonous? These concerns have mostly been overblown, most foods are safe to eat past its “best before” date maybe it’s not as fresh, but most of the people that buy in this market won’t care. As for tin safety the US regulator the FDA (Food and Drug Administration) has this to say on the issue:

  • Is it safe to use food from dented cans?
    If a can containing food has a small dent, but is otherwise in good shape, the food should be safe to eat. Discard deeply dented cans. A deep dent is one that you can lay your finger into. Deep dents often have sharp points. A sharp dent on either the top or side seam can damage the seam and allow bacteria to enter the can. Discard any can with a deep dent on any seam.

  • Is it safe to use rusted canned foods?
    Discard heavily rusted cans. Cans that are heavily rusted can have tiny holes in them, allowing bacteria to enter. Surface rust that you can remove by rubbing with your finger or a paper towel is not serious. You can keep these canned foods. If you open the cans and there is any rust inside, do not eat the food. Rust (oxidized iron) is not safe to eat.

For dent damage the biggest issue is there a hole in the can that will allow bacteria to enter and is the rust on the inside of the can. Regarding holes check for leaks as for rust as you can tell from above if the rust can be wiped off from the outside then it is likely not rusted through and through.

Eating food past its “sell by” or “best before” date is fine the only thing I would completely avoid is expired baby formula that is one product that is usually strictly regulated regarding expiration dates.

Success in the market
Success in this market depends on finding a good supply of salvage and distressed food products. So we’ve already established that distressed and salvage food is food that is edible but not sellable in traditional stores. This is because they have suffered some or other damage, is close to expiration or is stock the supplier is not able to sell into the traditional retail channel.

This tells you where to look for stock, as you will have to look for more than one source. Besides shops look at distributors and importers that have stock that can’t be sold into the retail channel. Some importers import an item and then can’t find local buyers and it eventually enters the salvage channel.

Then you need a vehicle (preferably a small truck), you need to be able to buy large volumes if you want shops to deal with you. You can’t just buy a few packs at a time you need to buy boxes, even truckloads at a time.

Location: you cannot go open a stall in a high income area whose residents shop at Woolies, you need to sell in a low income area, luckily there are lots of those in South Africa.

Open up a few trestle tables and empty your truck onto it and you are in business.

Image credit: amerisurplus

How to Start a Buying & Selling Business in South Africa

A buying and selling business is one of the easiest businesses to get into; it requires little skill (besides basic mathematics) and can be started with very little capital. There are two underlying components to a successful buying and selling business: 1.