WASHINGTON -- The Food Marketing Institute here is making plans to ensure that retailers attending the upcoming annual convention and exposition in Chicago are ready to deal with the challenges of the fast-approaching year 2000.
With the new millennium just months away, the FMI plans to give its members ample opportunity to hear about and discuss the issues surrounding Y2K, Timothy M. Hammonds, the association's president and chief executive officer, told SN in a pre-convention interview. The convention is to be held May 2 to 4.
In response to strong member interest, Hammonds said, the FMI will host a Y2K breakfast at the convention -- from 7:00 to 8:15 a.m. Tuesday, May 4 -- that will be open to all convention-goers. At the meeting, attendees may ask questions, make suggestions or share information on what their companies have done.
"We've had Y2K breakfasts at other, smaller meetings, and we've always ended up with standing-room-only attendance," Hammonds said. "Clearly, the Y2K transition is important, and we will address that issue in several different places."
Y2K will be featured in a segment of the Speaks presentation Monday, May 3, and a section of the exhibit floor will be set aside as The Y2K Cafe, a lounge area with interactive kiosks and terminals where members can learn about different aspects of Y2K, including what retailers, manufacturers and the FMI are doing.
Similarly, e-commerce will be a significant feature of the convention.
"Clearly, we expect more electronic commerce to move over secure Internet connections, which will change the way trading partners do business.
"And in several convention sessions, we'll address one of the major, major problems for the industry -- recruiting and retaining enough good people to staff our stores and organizations."
INDUSTRY ISSUES
Apart from technology-related issues, Hammonds outlined for SN several current industry issues sure to be discussed at the convention and elsewhere:
CONSOLIDATION: Hammonds said that "we're probably midway in that process right now. There are a few more big mergers yet to come, but we've seen a good deal of major consolidation already."
And, he said, he would not be surprised to see more foreign ownership of U.S. retail companies, possibly from Europe.
"Clearly, Europe is a very expensive place to do business and it's hard to grow supermarket companies within the countries there, so many of those operators are looking around the world, with several already investing in Latin America."
Noting that a Mexico-based company, Grupo Gigante, is poised to enter the United States with stores in Los Angeles, Hammonds said other Mexican operators could be interested in seeking U.S. partners if Gigante's American stores are successful.
He said he doubts there will be much Asian investment in the United States because of that continent's economic difficulties.
As for American companies looking abroad, Hammonds pointed out that H.E. Butt Grocery Co., San Antonio, operates several stores in Mexico, "and at some point other companies will need to look for opportunities abroad. We're not quite there yet because there are still consolidation opportunities here in the U.S."
DESTINATION DEPARTMENTS: "There's a growing feeling in the industry that stores need to be managed as a brand, just as our supplier partners have done over the years. And destination departments make a strong statement about what kind of brand your store represents and what needs to be done with the strategic thinking behind it.
"We're seeing good things developing, using category management to focus on some specific destination departments and using that concept to build the entire store as a brand."
MEAL SOLUTIONS: Hammonds said that the past two years have been "a period of intense experimentation and many companies are continuing to refine what their local customers are looking for.
"We've learned that not everybody looks for the same kind of meal solutions and that meal solutions mean different things market by market. Many companies already do a good job in meal solutions and are fine-tuning their operations to appeal to their specific shoppers."
A major change in the industry's response to meal solutions is the kind of personnel supermarkets are putting in charge of the activity.
"Two years ago most companies were converting existing supermarket people to meal-solutions managers. But since then we've gotten better at recruiting from the food-service community, because we've learned it's easier to take someone who understands food service and teach him the supermarket business than it is to take someone from a traditional supermarket department and try to teach him the food-service business.
"So the industry is doing a better job of blending food-service expertise into the supermarket operations."
TRADE WAR: Hammonds said the FMI is concerned about the looming trade war with Europe. "Certain products have been selected for sanctions because of disputes over the use of certain hormones in beef, which is of particular concern to us. We've told the U.S. trade representative we'll do all we can to help settle the disputes before sanctions are imposed, because if they are, things could get out of hand."
MEAT PRICES: Hammonds said last year's collapse in meat prices helped the industry form a stronger partnership with meat producers. "We were not prepared for the kind of collapse in meat prices that took place last fall. The cattle, pork and poultry industries had several good years that led them to expand production aggressively, and when that overproduction came to market, prices weakened, especially for pork. So the pork producers came to us and asked for the industry to help promote pork, and the industry responded well, resulting in a strong partnership."
FOOD SAFETY: "Obviously, food safety continues to be a big issue. Listeria is one of the new pathogens causing grave concern, with the outbreak late last year at the luncheon meats plant of Bil Mar Foods [Zeeland, Mich.] making us wonder if this is a new strain or just an isolated event.
"We obviously need to put new controls in place, in language the typical store employee can understand, to maintain the integrity of the food supply from the packing plant to the retail store."
AT THE CONVENTION
Hammonds also told SN there will be several special aspects to the convention this year:
To make it easier for people to maintain their focus on the exhibit floor, the convention will open with a Sunday, May 2, session from 8:30 to 9:30 a.m. that will provide an overview of industry trends. The exhibit floor will open immediately afterward.
"If people are at the convention center early Sunday, it makes it easier for them to be on the show floor at the opening," Hammonds said.
To encourage people to remain on the exhibit floor Tuesday, the FMI has moved the closing general session, usually scheduled for Wednesday morning, to Tuesday at 3:45 p.m., just after the show closes.
"We think that will give people one more reason to stay on the floor until the end of the show and it should give the show a good wrapup," Hammonds said. "Any association will tell you there are fewer people on the show floor in its last couple of hours, but we hope our plan will make a significant contribution to making the final hours of this year's show more productive."
The closing general session will feature "something a little different," Hammonds said, namely Phil Jackson, a retired coach of the Chicago Bulls basketball team, talking about the management challenges of directing personnel.
"If you think about the Bulls, you can imagine what kinds of things Jackson will have to say about overseeing a large work force," Hammonds said.
A new offering that stems from the convention will be the addition of a post-convention "virtual show" that will be available year-round to those who exhibit at the convention.
"With this new service, exhibitors can extend the life of the show because people can log on to FMI's Web site, FMI.org, and access the 'FMI Show' area to see a visual representation of the products and services that were on display in Chicago. This will also allow members to follow up with the vendors on discussions they may have had at the show itself.
"The Web site is designed to help exhibitors get more year-round bang for the buck. It doesn't replace the show, but it will be helpful for people who want to follow up on ideas from the show and make some contacts between vendors and department people who couldn't attend the convention."
Hammonds said the service will be available as soon as the show ends.
The show will once again offer staggered openings for different product groupings, with the North Hall of McCormick Place -- featuring non-consumables, equipment and supplies -- opening at 9:30 a.m. Sunday, Monday and Tuesday and closing at 4:30 p.m. each day, while the South Hall -- featuring food products -- will open at 10:30 a.m. all three days and close at 5:30 p.m. each day.
"The staggered times, which are designed to improve traffic in the North Hall, worked out well last year," Hammonds said.
The convention will again feature more booths for minorities and women. "That turned out to be a very successful approach last year, and word-of-mouth has helped us expand the number of companies exhibiting, and we expect to have a good group this year," Hammonds said.
He said the FMI expects to increase the number of booths for women and minorities, which numbered 20 last year.
SPECIAL FOCUS
In one departure from the usual workshop fare, a workshop will feature a speaker from Starbucks on employee recruitment and retention. "Hearing what other industries are doing is a good way to generate ideas, rather than listening only to supermarket speakers talking about our own problems," Hammonds said.
Hammonds also said the FMI is continuing its commitment to independent members this year by helping them form groups to attend the convention.
"FMI has always tried to reach out to independents, but there are many companies out there that don't attend the convention. We have a group-assistance program for large companies, and we felt it would be advantageous for independents to come with a group of their own, so we've expanded our group-services offerings to state associations to organize groups of independents to attend the convention."
Hammonds said only four states sent independent delegations last year, "but we've expanded our efforts this year, and we already have 25 state organizations sending groups of independent operators to the convention. We expect more."
The independent sector is very important to the FMI, Hammonds told SN. "We have more independent operating companies as members than any other industry association, which tells us there's definitely room for strong, viable independent operators in this business, despite the industry focus on large companies.
"Independents have a clear focus on the kind of businesses they want to run, a strong commitment to being equal to the best in the market and a desire to pursue industry best practices by strengthening their alliances with wholesalers. So we've tried to be conscious about helping them and putting more effort behind it."
