RESTON, Va. -- The trickle-down theory of Efficient Consumer Response -- the idea that practical knowledge would migrate from large-company innovators to smaller operators -- isn't working, according to Thomas K. Zaucha, president and chief executive officer of the National Grocers Association here.
As a result, Zaucha said, the NGA plans to roll out a new communication strategy intended to make sure the techniques of efficiency are reaching independents. Zaucha was interviewed by SN prior to the NGA's annual convention and exposition in Houston. The show began at the weekend and runs through Wednesday.
More specifically, said Zaucha, the NGA intends to roll out a series of traveling workshops in a bid to inform independents about current industry practices concerning ECR components, such as category management.
"Since ECR was announced more than four years ago, and the move to efficiency began, there has been an expectation that pilot projects would be formed by manufacturers working with larger chain retailers and wholesalers, with the desire and expectation that what was learned would get channeled down to smaller retailers.
"But that's not happening," Zaucha noted. "We are receiving significant feedback from the industry to the effect that we are a retail-driven industry, and until such time that we get buy-in and strong movement from the entire retail side of the business, you'll never realize the promises of ECR and better practices. What we need is to move this down to all retail levels.
"So NGA desires to be -- in cooperation with wholesalers and manufacturers -- more of a bridge that would carry and communicate strategic directions and objectives developed by some of the key brand manufacturers down to the retail level. We think that is an opportunity waiting to happen."
Asked how the NGA could facilitate the process, Zaucha said a series of "roadshow" workshops that would transmit the message of ECR activities to independent retailers are in the making.
"We're looking to create a roadshow that would reach as many independent operators, through their wholesalers, as possible."
How it would work, Zaucha said, is that the NGA would invite manufacturers to go to a wholesaler's location, or elsewhere, to make a presentation to a group of retailers assembled by the wholesaler.
"We might start with roadshows about category management," Zaucha said. "That could be presented as a three-part program. First, there would be an impartial presenter addressing what the value of category management is to the independent; that would be followed by a description of the role of the wholesaler in category management and, finally, there would be examples of manufacturers who have pilot programs with larger customers. Those manufacturers could explain the potential dollar return to the independent sector.
"These programs could offer a way for manufacturers who have invested in pilot programs with wholesalers to ensure that the message is moving down to retailers, and being accepted by retailers. We're looking to carry this roadshow to as many retailers as we can in 1997," Zaucha said.
He pointed out that the NGA's proposed ECR roadshow activities parallel, in a way, what may be the biggest change in the industry: the need for each industry segment to understand how others do business.
"The need for communication between all the partners -- the wholesaler, retailer, broker, manufacturer and retail customer -- is the biggest change in the industry. Each has to understand the business of the other today," Zaucha said.
Similarly, he said, trade associations are changing because they must give full value for the dollars that members are being asked to spend, and associations must be more willing to partner one with the other to improve efficiency.
"The biggest change in trade associations today is that they are being viewed more and more as business investments, and not simply as affinity groups. People who join are looking for return on investment."
One way to ensure return is to eliminate duplication of effort among associations, an idea that has been a stated NGA objective for several years.
"We have been good partners and good coalition-builders in trade associations," Zaucha said.
Indeed, this week's NGA meeting is being held back-to-back with the Food Market-
ing Institute's MarkeTechnics show. The FMI event started Friday and concluded yesterday. The future of the joint FMI-NGA event remains unclear, although it has been decided that the fledgling union will be dissolved next year for logistical reasons.
As to what other interassociation cooperative events might be on the horizon, Zaucha said there could be a number of opportunities ranging from more jointly staged meetings to considerations as finite as printing operations.
"I see greater consolidation of activities and resources in the next couple of years," he stated. "And that could even go to the production of printed matter. We have a tremendous production facility with all the major equipment.
"All trade associations pour out paper. Does it make sense to eventually coordinate our communication efforts, or production facility? I think we can do this more efficiently and cost-effectively than some other groups can."
Zaucha -- asked if interassociation cooperation might lead to the blurring of distinctions among associations -- acknowledged that the path toward trade-association cooperation must be trod carefully.
"The more we go down the path of involvement with other associations, the more important it becomes to do precise positioning. For instance, to have MarkeTechnics at the front end of our convention this year, to me, doesn't dilute NGA's role.
"The guiding test is that every segment of the industry deserves, and will demand, parity representation and service. If, at any given time, any segment of this industry doesn't feel it's receiving that from any trade association, a void will open that someone else will fill. But as long as the associations don't lose the ability, or willingness, to agree to disagree when it counts, there won't be much of a problem.
