MINNEAPOLIS --- For Nash Finch Co. here, merging its operation with Super Food Services, Miamisburg, Ohio, is just another day's work.
Or six months' work, and then it's on to something else.
That's the attiude of Al Flaten, president and chief executive officer of Nash Finch, which acquired Super Food in November and expects to complete the merging of the two wholesalers by May.
"My study of acquisitions and mergers indicates that most take up to two years to complete, and over 90% fail, often due to the lengthof time it takes to complete them," Flaten said in an interview with SN.
"Most of that time is spent by people waiting for further studies to be completed or afraid of making decisions that might upset someone or talking about an issue over and over -- all to avoid making any mistakes.
"But we're willing to make a mistake, because whether it takes two years or one year or six months, we're likely to make the same mistake, so why worry about it? We'll make it and overcome it sooner than later."
Flaten said he doesn't think the two companies have made any mistakes yet. "Basically, we've resolved differences in the two organizations over benefits, and we've come a long way in aligning the insurance programs and all the rest of it."
By May, Flaten said, Nash Finch hopes to have decisions on some of the synergies it's investigating as it seeks to add value to the combined operations -- by building on existing strengths and eliminating existing weaknesses, adding or subtracting product lines from warehouses, and finding more efficient ways of buying and distributing products.
Among the specific programs the company is studying, Flaten said, are the following: Determining whether to add produce distribution at Super Food's warehouses.
Finding the best ways to combine the two companies' private-label programs.
Shipping health and beauty care items and general merchandise from Super Food's General Merchandise Services distribution center in Bellefontaine, Ohio, to Nash Finch facilities in the Southeast and Midwest.
Taking gourmet items from the GMS facility and cross docking them at Nash Finch warehouses for distribution to retailers in the Midwest.
Centralizing the buying of certain commodities, beginning with fresh meat.
The merger of Nash Finch, a $2.9 billion company, and Super Food, a $1.2 billion company, has created a wholesale distributor of $4.1 billion with a base of wholesale and retail operations across the entire Midwest and Southeast.
Nash Finch was attracted to Super Food, Flaten said, "because we felt we could add value to shareholders of both companies by creating synergies in terms of combined buying, marketing and merchandising efforts and in what we could bring to their customers in terms of expertise from our corporate retail operations."
he two companies, which do not have any overlapping operations, complement each other geographically, with Nash Finch operating in the Upper Midwest and the Southeast and Super Food operating in between in Ohio, Michigan, Kentucky, Indiana, Tennessee and West Virginia.
Nash Finch has 13 Midwest warehouses and six in the Southeast (including two military commissaries) serving a customer base of 3,100 retailers, including 104 corporate stores; while Super Food has five warehouses that service approximately 850 customers -- 456 affiliated stores, nearly 200 nonaffiliated stores and another 200 convenience stores.
"So far we have retained all of them," Flaten said, "and we expect to grow that business."
Since the $250 million deal closed in November, the two companies have been working on the physical and personnel aspects of the merger.
Flaten said his company plans to operate Super Food as a Nash Finch subsidiary, retaining all five of its distribution centers -- located in Cincinnati; Bridgeport, Mich.; Lexington, Ky.; and Bellefontaine, Ohio (with two facilities, including General Merchandise Services).
Once it shuts down Super Food's main offices in Miamisburg in May, Nash Finch will move management information services from there to existing office space in the Cincinnati warehouse "because the facility there has a raised floor, air conditioning and the proper wiring."
In addition, Nash Finch will downsize an existing Super Food office in Dayton to house the personnel remaining in the subsidiary there, including operations, retail electronics and auditing, Flaten said.
Only about 20 people lost their jobs through the merger, while approximately one-half of Super Food's remaining 40-member administrative staff has been reassigned to Minneapolis and one-half to Dayton.
Most of the Super Food management team has retired, Flaten noted -- including Jack Twyman, chairman and chief executive officer; Sam Robinson, president and chief operating officer; John Demos, secretary and general counsel; and Robert Hughes, chief financial officer -- although all are on call to help or to answer questions, he added. Flaten said most of Super Food's MIS staff will remain, including Robert McCarthy, senior vice president of MIS, and David Flanagan, vice president of retail information systems (who will move to Minneapolis). Also remaining with Nash Finch will be Robert Frank, Super Food's controller, and John Batista, senior vice president of distribution (who will remain in Dayton).
Flaten said his confidence in the ultimate success of the merger has been bolstered by the positive attitudes of the Super Food personnel.
"I believe they are a very capable management group that is very energetic and willing to work with us through the transition. As a result I don't think we have to place a lot of our people into Super Food because they are doing a fine job without our help.
"They work with us, we work with them, and so far it's a great marriage."
One of the first items on the current agenda is whether to add produce to the Super Food facilities.
Nash Finch, which has a produce marketing company in California, stocks produce at all warehouses in the Midwest and Southeast. "We've been in the produce business since Shep was a pup," Flaten said.
"Between now and May we will study the markets that Super Food supplies, looking at the service, quality, variety and help their customers get from their current suppliers, to determine if we can help those retailers more by putting produce into the warehouses that service them," he said.
"If we don't think we can add value, then we won't expand produce."
Adding produce to the Super Food facilities would be a very expensive undertaking, both in time and money, Flaten said. "It would require installation of coolers, banana-ripening rooms and other equipment, plus trucks to handle it and people capable of buying it and the need to expand our merchandising capabilities at the retail level, and it's no small project.
"If we decide to do it, it will be a battle for a number of years. But we aren't going to do it just to say we have produce in all warehouses. We'll do it only if it makes sense and adds value."
In the area of private label, both wholesalers have established name identity -- Nash Finch with the Our Family line and Super Food with the Fame line, plus the IGA label at both companies.
Private label had been considered one of the major strengths Super Food brought to the merger. Asked what changes, if any, are likely in private label, Flaten said, "Anything that makes sense. If there is value to the name, we will probably keep it. And if there's no particular value, we'll probably get rid of it, whether it's ours or theirs."
Flaten said Nash Finch also plans to investigate the advantages of sourcing the separate private-label lines together. "We would like to buy together, and we will use whichever suppliers have the best quality at the best price," he said.
In the area of general merchandise, Nash Finch operates a GM/HBC distribution center in Sioux Falls, S.D., that services its Midwest customers; for those in the Southeast, it's been buying nonfood lines from competing wholesalers in the area.
However, since December Nash Finch has been shipping general merchandise from Super Food's General Merchandise Services facility in Bellefontaine into the Southeast, Flaten said, "and it's been working out well so far."
However, he declined to quantify any savings the company has derived.
Flaten said he hopes to use the more centrally located GMS facility to service other Nash Finch customers -- not only with nonfood but with gourmet items that the GMS warehouse carries.
"We were considering adding gourmet items into our Sioux Falls facility, but that's no longer a consideration," Flaten said. "Instead, our plan is to supply our stores through a cross-docking program with GMS, beginning in March or April."
Flaten said he also hopes to be able to source some general merchandise items for both companies in Asia - mostly seasonal, in-and-out omports like toys, Christmas merchandise and pillows, "because those items are at different price points from what you can get in the United States."
Eventually, the two companies will combine buying of general merchandise items, Flaten said, but it will happen on a category-by-category basis, he noted. Combined buying on health and beauty care items will not begin until the end of this year or early 1998, Flaten added.
Flaten said Nash Finch hopes to centralize the buying of certain commodities - a process that began in December with fresh meat. The next category on the list is private label, he said, with the company seeking out special buys.
"We will buy together only where we can create value by buying together," Flaten said.
One problem slowing down centralized buying, Flaten said, is the inability to tie in Nash Finch's information systems with those of Super Food. "But we're not going to put money into changing the systems now because we can extract movement figures later, after we've installed our new information system next fall."
Flaten said the first phase of implementing that system will take place in Rapid CIty, S.D., "because it has a combination of military customers, affiliated retailers, corporate stores and five well-operated warehouses - a little bit of everything we deal with - and it's remote enough that our results won't be broadcast all over the United States."
As part of its re-engineering effort, Nash Finsh has established a regional buying office here, which buys for all warehouses in the Midwest, "and we're looking to do the same thing in Rocky Mount, N.C., for our warehouses in the Southeast," Flaten said.
He said Nash Finch would consider adding a regional buying office for the Super Food division "if there were advantages to doing so. But we can't do anything about that until we have the information systems in place to support it."
Despite the regional buying office, each Nash Finch warehouse continues to maintain its own buying offices "for items that are better purchased at the local level, and for mainaining contacts with customers, overseeing promotions and buying bags and other cleaning supplies," he explained.