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Stephanie Walsh, Food Business Consultant
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Food businesses are once again watching costs rise faster than they can pass them on. Input costs went up for 88% of food businesses this year, while
only 49% raised prices in the same period. Part of the reason is customer concentration. Many food businesses rely heavily on a single customer for their revenue and that dependence can make price negotiations more difficult.
Who holds the leverage
Three in ten food businesses report more than half their revenue comes from a single customer. If one buyer is half your revenue, they hold most of the leverage.
The story first appeared in our 2026 Food & Agribusiness Report
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"30% of food businesses report over half their revenue from a single customer."
3 ways to reduce customer concentration and protect margin
Commission a commercial category review
A category review shows you the margin each product is making, not just at range level but line by line. Does the product still earn its place in the range and for the customer? Could a new product create additional value rather than relying solely on a price increase?
The review also shows where you sit within the category: your rate of sale against competitors, your price position and the margin the customer is making on your line. That evidence makes the pricing conversation more specific and can identify opportunities to improve profitability within the account, even before anything changes in the wider customer base.
Diversify your customer base
Customer concentration is a risk for any business and reducing it means looking beyond individual customers to the channels the business supplies. Could the same product move into food service with a simple packaging change? Has export been explored, or just assumed to be too big a step?
A strong account can make diversification feel less urgent when business is good. However, that is the best time to start developing alternatives, rather than waiting until the relationship comes under pressure. Business-to-business supply may offer another route, while adding a new category can create opportunities with customers the business does not currently serve.
Know your numbers before you negotiate
The survey also points to something businesses can control: how often they review their own financial performance.
Businesses reviewing their numbers monthly are more likely to go into a price negotiation with up-to-date information on their cost per unit, rather than relying on figures that may be months out of date. That gives the business stronger evidence to support the case for a price increase.
That preparation matters particularly where one customer accounts for a large share of revenue and the business has limited leverage in the negotiation.