RESTON, Va. -- The industry is re-engineering, and so are trade associations representing retailer and wholesaler interests, said Thomas K. Zaucha, president and chief executive officer of the National Grocers Association here.
In an interview with SN prior to NGA's annual convention now under way in Orlando, Fla., Zaucha laid out several ways in which trade association interaction is changing, and ways in which NGA itself is changing in an effort to keep in sync with a changing industry.
Among the points he noted were these:
The industry's horizontal trade associations are currently far more prone than ever to cooperate in terms of show venues, educational programs and the like, all in a bid to make it easier to serve members' needs.
NGA has formed a Center for Labor Relations and Employment Law, which became operational during this week's convention. The convention started Sunday and continues through Wednesday.
NGA is continuing to add programs to its subsidiary organizations: the Grocers Research and Education Foundation and the NGA Service Corp. Board members for the latter organization, a for-profit subsidiary of NGA, are to be seated during this week's convention.
As for what Zaucha sees as an upcoming wave of cooperation between the big-three trade associations -- NGA, the Food Marketing Institute and the National-American Wholesale Grocers' Association -- the outlook is for individual identity to be retained, but for some member services to be combined. "I see the associations moving to a consortium approach which involves the sharing of everything except the identity of the associations themselves," Zaucha said. "That means we each will retain the ability to create separate policy and be capable of being strong and independent advocates, retaining the people and dollar resources to accomplish that."
Zaucha said a successful model for trade association cooperation was established last year when the big three, and others, combined efforts to reform the Perishable Agriculture Commodities Act. PACA was established in the 1930s to govern the conduct of the produce market with a special outlook toward ensuring prompt payment to suppliers. The regulation came under criticism in recent years with retailers and wholesalers protesting they paid fees to implement an obsolete and unnecessary governmental function.
As the PACA debate unfolded last year, the big-three associations at first called for outright repeal of PACA, while others such as the United Fresh Fruit and Vegetable Association and the Produce Marketing Association conceded that it should change, especially regarding fees, but remain largely intact. Late last year, reform legislation that will substantially attenuate fees was signed into law. In the end, all concerned declared victory and hailed the development as a useful compromise. "The work we did this past year on legislative issues, such as PACA, shows how FMI, NGA and NAWGA can play very distinct roles, each bring something unique to the table." In far broader ways, Zaucha said, cooperation is likely to further develop: "I now see a significant and growing level of cooperation and trust among the three major groups. "For instance, we will have our convention next year preceded by FMI's MarketTechnics. We think that will bring added value to both associations." As reported, NGA and MarketTechnics, the latter generally considered to be the industry's premier technology show, will run Feb. 7 to 9, 1997, with NGA's convention Feb. 9 to 12. Next year's events are set for Houston. Moreover, Zaucha said, "we have endorsed and made a formal invitation to NAWGA to co-host a national convention in 1998."
Asked about the likelihood of that happening, Zaucha said, "I sure hope this will occur. What I hear from manufacturers and wholesalers who, in many instances, are members of both NAWGA and NGA is that this is what they want. I can see so many pluses, we can't let that opportunity go."
Zaucha said it's currently unknown how a co-hosted convention might work, but predicted that such combinations will become more common.
"If I had to make a projection about where we are going, I would say that this industry will increasingly develop a consortium approach to association representation. "What I mean is that there is value in the mission of NGA and of NAWGA, and that's certainly true of FMI. We all provide a specific level of representation to segments of the industry. "The integrity of those missions, and of those organizations, should be retained. But, having said that, everything else is basically on the table for a good look." As for developments at NGA itself, the association is unveiling the formation of its Center for Labor Relations and Employment Law at this week's convention.
Zaucha said new center was formed because "we have thought for the longest time that we haven't had proper oversight from the National Labor Relations Board in terms of the decisions handed down.
"NGA has taken a strong position on labor issues; 99% of our retail members are nonunion and 99% of our wholesale members are unionized." In recognition of that dual outlook, Zaucha said, NGA contracted with the law firm Seyfarth, Shaw, Fairweather & Geraldson, Washington, to inform members of two councils to be formed. One council will be for "nonunionized companies that want to stay that way" and another for "organized companies that want to moderate the influence labor unions have on their day-to-day policies. "We see these councils as information sources; a way of keeping companies abreast of rules and regulations that apply to this arena and also to establish a government-relations strategy relative to the Department of Labor.
"We also feel it's important that this industry begin in a proactive way to develop a litigation strategy. What happens all too often is the NLRB hands down a decision with which a retailer or wholesaler disagrees vehemently, so on their own they take the decision to court. "That's a very expensive proposition. We feel we can play a role in looking at the overall labor field and attempt to coordinate interested parties [to pursue litigation jointly]. The net outcome should be higher success, and certainly a sharing of some of the economic burden that goes with filing a lawsuit."
Finally, in an update of recent NGA activities, Zaucha predicted that the Center for Applied Technology, a branch of the Grocers Research and Education Foundation formed about two years ago, will grow in importance.
"The technology center will continue to grow in importance. In this era of technology, the ability to collect data and make better decisions predicated on data is increasingly important, as is the need to share information among industry segments. "And the need to share information ties to the second entity to flow out of NGA, the NGA Service Corp. It is a for-profit company intended to identify cutting-edge services, products, programs and make sure the independent operator really is front and center in having access to programs." The company, formed about a year ago, currently offers banking connections allowing independent retailers to offer credit and debit options at the front end. Next, Zaucha said, is the possibility of developing a frequent shopper program that links supermarkets and other retailers in a region so they together can offer a shopper-incentive program. Putting several channels of trade together in an affinity program could constitute a fight-back strategy against alternate formats.
He said a pilot program may start "soon," but he added that it's not possible to specify exactly when or where.