WASHINGTON -- The head of the Grocery Manufacturers of America called for retailers to move faster in adopting data synchronization, saying the overall adoption rate is too slow.
"One of the most challenging things we need to accomplish over the next year and a half is accelerating the adoption of data synchronization," said C. Manly Molpus, president and chief executive officer, GMA, based here. "We're not getting the rate of usage of adoption we need. Manufacturers have on the whole moved further, faster, than retailers. We need to help the retailers work on better understanding the business case."
Molpus made his comments during a wide-ranging interview with SN in advance of the GMA's annual Executive Conference, which takes place June 10-13 at the Greenbrier resort, White Sulphur Springs, W.Va.
Molpus has said that creating global standards for data sync, which is how product and eventually pricing data will be shared by CPG trading partners, will let manufacturers respond more quickly to consumer demand.
Data sync is also considered necessary for the next wave of supply chain technology based on radio frequency identification (RFID) and the EPC, or electronic product code.
"The outlook for accelerated adoption of data synchronization is good, but it certainly needs to happen, and we all need to keep pushing to make sure that it does happen," Molpus said, "because I think a great deal of this industry's future competitiveness depends on its use of technology. And that depends on its use of data sync."
Turning to channel-blurring, Molpus offered praise to retailers that are experimenting with new formats. "There's a lot of cross-shopping going on today," he said. "I think one of the things that's very encouraging + is what's underway today with the new store concepts and new store ideas. We're talking here about things like Bloom and Sweetbay and the new store that Marsh has, and the new Kroger Marketplace.
"Our members want to sell products anywhere where consumers want to buy those products," he said. "The supermarket channel is a critically important channel to CPG manufacturers, so we're certainly anxious to work with that channel to be sure they stay healthy and prosper."
For their part, manufacturers need to focus on product introductions to grow sales, weighed against the need to put out the right items, he said.
Speed to market also is critical to helping CPGs maintain shopper loyalty at a time when some retailers are mounting aggressive private-label programs, he said. As the low-carb fad demonstrated, speed isn't always enough, though.
"The carb experience showed, manufacturers can and do move fast in response to consumer interest and consumer need," Molpus said. "But consumers are and can be fickle, and they can change their minds upon the basis of additional information."
THE OBESITY ISSUE
One area that's triggered plenty of information is obesity, another front-burner issue for the association. Molpus described the GMA's lobbying efforts against those who would regulate product advertising, tax snack food and hold food marketers liable for America's growing obesity. "We are going to continue to resist the ill-advised calls of those who want to go after the food industry as a causation of this obesity issue," he said.
The GMA has been promoting members' product changes and efforts to encourage healthy lifestyles and restrict their marketing to children.
"Our companies have been moving very quickly to reformulate products in response to this issue, whether it's taking out trans fats or products with less sugar or less cholesterol ...package changes [or] getting more information," he said.
The GMA also said it would promote the government's new food pyramid, starting this fall, through a program that distributes classroom and take-home educational materials to teachers. GMA members also help fund the American Council for Fitness and Nutrition, a nonprofit coalition that provides obesity research and resources.
Molpus said the new pyramid is good in conveying the importance of exercise, but acknowledged it's not easily reproduced on food packages. "It needs some explanation," he said, adding that CPGs can direct consumers to the icon's companion Web site. "You've only got so much room on a label."
Retailers have a key role, too, to disseminate nutrition information, through signage, pamphlets and nutrition professionals, he said.
THE LEGISTATIVE AGENDA
Other legislative issues high on the GMA's radar include:
- CAFTA: The association is lobbying for the passage of Central America-Dominican Republic Free Trade Agreement (CAFTA) that it contended would make it easier for its members to sell goods in those regions through $28 million in tariff reductions. "As we become global and look to new markets around the world and better entry into those markets, it's important to pass this particular agreement to demonstrate that we can find and muster the political will to pass these free trade agreements," Molpus said.
- National Uniformity for Food Act: The measure would prevent states from enacting their own food safety warnings without FDA approval.
- Anticounterfeiting: The GMA has endorsed a measure introduced in early 2005 that would strengthen laws against trafficking in counterfeit products and international efforts to stop counterfeiting.
On other topics: Molpus reiterated the need to drive down unsaleables, which he called an "ongoing, large, multibillion-dollar cost for this industry."
The GMA also has ongoing or has completed studies on direct-store-delivery efficiency and customer-channel management that would let companies benchmark sales performance.
On the possibility of the Food Marketing Institute partnering with an investor to run its annual show in Chicago, Molpus called the show's value a mixed bag for manufacturers.
He noted that all trade associations are called on to demonstrate their effectiveness. "What all of us are going through with many of the programs and services we offer is having to reevaluate those programs and services in light of a new business environment....There's tremendous pressure on companies as they have downsized. Associations have to work harder to engage and to prove their value.
"I think at GMA we are doing a good job of it, and our membership has stayed constant and has stayed very engaged," he said.
