BOCA RATON, Fla. -- The supermarket industry needs to react quickly and wisely to a growing list of threats and opportunities ranging from meal solutions to encroachment from outsiders, said Timothy M. Hammonds, president and chief executive officer of the Food Marketing Institute, Washington.
Hammonds chose the top-level executive audience of the FMI's Midwinter Executive Conference late last month to urge the industry to avoid blowing some golden opportunities.
"Many outsiders want to get into our business," he pointed out, noting that even companies like Microsoft are looking at grabbing a piece of the supermarket pie through consumer-direct means. "It's scary to me if somebody like Bill Gates is looking at the supermarket industry and saying, 'How do I play in that arena.' "
But Hammonds said all sectors of the industry need to keep up with developments such as technology changes. Many, notably independents, aren't maintaining an adequate presence at the FMI's major technology showcase, the MarkeTechnics show, he said. Some companies are just sending technology specialists.
"Some executives feel embarrassed they aren't keeping up," he said. "But the model of what a CEO does has to change. We have a group of CEOs in the industry that want to feel they have the answers. The CEO successful in the future asks the right questions."
Hammonds also expressed concerns on the meal-solutions front, pointing to supply problems for retailers. Infighting in vendor organizations between the traditional grocery and the food-service sides is thwarting supermarkets from getting the food-service products they need.
"Our people want to talk to food-service sales teams," he said. "But it's real hard. The supplier supermarket sales teams view the food-service teams as competitors to their business. So it's difficult for retailers to talk to food-service suppliers."
The result, noted Hammonds, is that restaurant suppliers, airline caterers, cafeteria suppliers and other food-service companies may have a supply advantage right now in the retail sector. "We in the supermarket industry have to get it right," Hammonds insisted. "Suppliers need to open up the industry to the food-service sales teams."
On the subject of home delivery, Hammonds urged supermarkets to avoid missing a potential windfall. "If home delivery is important, then who owns the delivery window?" he asked. "It seems to me that the grocery industry owns that window. So a grocery truck should be the one to go to the home. And how do we exploit the ownership of the grocery window? It opens up a whole new way of thinking. Why not stock products that will never be profitable for us in the store, but do make sense for the home? Why not tie in with other kinds of retailers in the area and deliver things that aren't even grocery products?"