When a bag of coconut-cashew granola at Whole Foods jumped from $5.99 to $6.69, the culprit wasn’t just manufacturers or grocers. Instead, a hidden force in the supply chain is squeezing the industry with mysterious fees. Known as grocery distributors, this opaque network has become a critical link between manufacturers and your grocery bill.

• Grocery distributors like UNFIUNFI
  , KeHE, and C&S are the intermediaries who buy, store, and ship products to supermarkets, managing programs for thousands of small food makers.
• Industry consolidation has reduced alternatives, forcing manufacturers to pay increasingly aggressive fees that can net a mere $2.50 from a $10K granola shipment.

The pricing paradox: Operating on razor-thin margins, distributors rely heavily on charging suppliers with shipping, promotion, and processing fees — in what industry veterans liken to “the Wild West” of pricing. With the system becoming so complex, manufacturers often have to hire full-time employees or outsource to costly “deduction buster” firms to dispute charges and recover funds. But as costs stack up, pressed manufacturers note, “In the end, consumers pay for everything.”