PARIS -- Food-industry retailers and suppliers are fighting to keep up with rapid changes on two fronts.
On one side, according to Etienne Laurent, president and chief executive officer of CIES, The Food Business Forum, here, are the consumers, who are changing at such a fast pace that they have become unpredictable. Retailers and suppliers also are faced with internal upheaval as they simultaneously strive to expand their businesses, operate more efficiently and market to a moving consumer target.
"Complexity has invaded our business lives," Laurent told SN Global in an interview. "We have fewer and fewer solid points of reference and we have less control over events."
The issue of change within the food industry will be at the forefront when CIES convenes in Madrid for its 37th annual executive congress. "The Transformation Imperative" is the theme of the congress, which runs from June 5 to 7.
CIES is an international trade association of food-industry companies. It also has offices in the United States and Japan.
Laurent said consumers are at the root of ongoing change within the industry. "People say the consumer is changing fast and is unpredictable," he said. "But the consumer still wants things.
"The problem is you never know what he wants, when he wants it and where he will want it. This is the complexity on the part of the consumer."
To address this fast-changing consumer, retailers and suppliers are making changes within their organizations and developing new operational tactics.
"You have a consumer that everyone is trying to address, but the standards whereby consumers have been addressed in the past will not last because they don't work in most cases anymore," Laurent said. "Because the consumer is that different and has to be addressed in a different way, a certain number of issues have to be addressed in a different way, even within a company."
Laurent said he believes many small, full-service chains will continue to enjoy success in the future, but it will be in direct proportion to how close they stay to their customer. Large diversified chains with different formats also will do well if they reorganize their structures appropriately.
"We think the transformation imperative will be to consider each type of customer and to adapt the whole organization to serving the customer who has been defined," he said.
In addition to developing new relationships with customers, companies must develop new arrangements with their staffs, their shareholders and their communities, Laurent said.
The new relationship with shareholders should be one that allows companies to focus on longer-term issues.
"It is no mystery that throughout the world there are some cultures that have put the emphasis on short-term results," he said. "Some others -- such as the Japanese, for instance, and in Europe the Germans -- have put the emphasis on long-term relationships with their shareholders."
The long-term view of competitiveness calls for a shared-destiny relationship among companies and their shareholders, and it means companies "are not the victims of the analysts who try to call the shots" that lead to optimum short-term stock-market performance, Laurent said.
Another area of change is the blurring of lines between retailers and suppliers, Laurent said. For example, he asked, is it possible to consider Loblaw Cos., the Canadian company that developed the President's Choice line of products, as only a retailer? "In the end, one wonders if manufacturers will find new ways to supply their end customers without actually passing through stores," he said.
Addressing the European economy, Laurent said there are signs the recession is coming to an end.
"The first country to be turned around was the U.K. and, after a gap of about a year, the indicators are green in Germany, in France and probably in Italy," he said. "Spain is a little behind, but the majority of the main countries are coming out of the recession."
At the Madrid congress, CIES expects participants from a record 36 countries to attend, including Indonesia, Romania and Slovenia. Retailers will represent about 38% of the total attendance, which is the highest concentration of retailer attendance in 10 years, Laurent said.