ORLANDO, Fla. -- There is a "bright future for strong-in-market" independent operators despite the many challenges and problems affecting the wholesale-supplied system, Mark Hansen, chairman and chief executive officer, Fleming, Dallas, said last week.
Speaking at a luncheon meeting during the Food Distributors International annual Business Conference & Partners Program, Hansen recounted the problems of rapid change, channel blurring, growth of food service and alternative formats, and consolidation, but said new opportunities are actually opening up for independent operators. Locally operated supermarkets that are in tune with local communities can have a competitive edge over the larger, more distant chains and the "consolidators," he said.
Noting that food service is increasing its share of consumer food expenditures, Hansen said companies must respond by creating stores that are "useful" to the consumer. "When the customer comes into the store, can she see dinner tonight or does she see an endless sea of endcaps with beverages and snacks?" he asked. "What we're dealing with today isn't new for us. It is generation-to-generation change. It is not a Johnny-come-lately event. It's no longer about preparing food, it's about providing food."
Hansen noted that the wholesale-supplied channel is losing share due to many of the problems he cited, and said that trend will prove detrimental to the packaged goods companies that serve the industry.
"Is your trade support adequate, both promotion and in-store?" he asked suppliers. "Some of you have changed your support of the wholesale-supplied channel in favor of the consolidators."
Hansen called for more cooperation among trading partners to reduce supply chain costs, transaction costs and inefficient behavior. He said it is important for wholesalers to find new ways of using efficiency of scale if they hope to compete in the future.
Along with issues confronting the wholesale-supplied retail channel, also addressed at the FDI gathering were topics important to food-service companies, the Falls Church, Va.-based association's other constituency.
Faced with the potential for dramatic growth over the next several years, the food-service industry must understand and capitalize on the factors at play, according Carolyn T. Doerle, who chairs the International Foodservice Distributors Association.
Speaking at the FDI gathering's opening brunch, Doerle pointed out that IFDA's new Foodservice 2010 projects that food service will pass grocery retail in total consumer food sales by the year 2010.
"To harness that growth tiger and turn it to advantage presents important challenges to our industry and the companies IFDA serves," said Doerle, president and chief executive officer, Doerle Food Services.
She noted that generational changes in consumer behavior will influence food-service sales while other economic forces, such as the drive toward efficiency, e-commerce and consolidation, also will have a major impact on the future direction of companies.
"IFDA is here to help companies deal with these issues, to prepare for and take advantage of tomorrow's opportunities, and to cope with the challenges of today," Doerle said. "Backed with the resources of FDI, IFDA will continue to help its members grow by providing the information and the tools they need."