In his 20 years as president of the Gen eral Merchandise Distributors Coun cil, Rick Tilton has seen nonfood as it relates to the grocery business come nearly full circle.
In those years, Tilton, through developing and expanding GMDC, has helped strengthen nonfood's position in grocery retailing. His involvement in the "meaningful change" that has shaped the nonfood business is what Tilton says he has loved most about his job all these years.
That change has consisted of expanding the membership to include direct-buying chains and service merchandisers. It has involved initiating closer working relationships with manufacturers and intra-industry associations on joint special educational projects aimed at recapturing some of the business that grocery nonfood has lost to alternative formats.
As the seeds of GMDC were being planted in the late 1960s, Tilton explained, the service merchandisers dominated distribution, independents were strong and maintained a good share of the food market, and nonfood was considered insignificant to grocery retailers' primary food business.
Back then, competition was considered coming from within the food industry rather than from outside, as it is today with the threat of alternative formats -- mass merchandisers, wholesale clubs and supercenters.
Today the situation is somewhat reversed.
Many grocery wholesalers and direct-buying chains have made a major commitment to nonfood and have become important players in the distribution process, said Tilton. They also have grown in prominence and have found a home in GMDC.
Ironically, with the announced closing of the National Association of Service Merchandising, many service merchandisers now will become GMDC members. It was the original service merchandising associations -- the Service Merchandisers of America, the Toiletry Merchandisers Association and the American Rack Merchandisers Association, which eventually became NASM -- that excluded its membership to nonfood grocery wholesalers.
Shut out from related associations, nonfood grocery wholesalers such as Certified Grocers of California, Alfred M. Lewis Inc., Merchants Distributors, Roundy's, Spartan Stores and Wakefern Food Corp. needed to form their own organization and founded GMDC, which was chartered in 1970.
These early food wholesalers saw the "growth and profit potential in nonfood, and they had the desire to become more of a one-stop service for independent retailers," said Tilton.
GMDC also kept its membership exclusive to only grocery wholesalers until 1988.
Through his ability to develop close relationships with other industry associations, Tilton can be credited with the direction GMDC has taken in becoming more focused industrywide and opening its membership up, first to direct-buying chains and then to service merchandisers in 1992.
Currently, GMDC's membership stands at 705 members, and comprises 95 wholesalers, including service merchandisers as well as wholesale grocers; 30 chain-store retailers, 235 health and beauty care manufacturers, and 345 general merchandise manufacturers.
When asked what has been the most difficult part of his job in his 20 years with GMDC, Tilton said, "The most frustrating is the continual challenge of getting the conservative grocery-oriented executives to realize, understand and commit to the potential sales and profits nonfood offers. That is a continual frustration, objective and challenge."
Under Tilton's leadership, GMDC has achieved a high profile and recognition for the nonfood side of the business. This awareness level has been fostered by the forces at work in the marketplace.
· Changing demographics have forced supermarket executives to look at nonfood in a new light.
· Marketplace pressures have made nonfood an essential part of doing business.
· GMDC, which has achieved recognition within the industry as a credible and financially stable organization, has helped its membership expand the nonfood business by providing valuable services through its annual conferences and through the Educational Foundation, which was formed in 1992 to develop research projects that would help the industry get back nonfood sales lost to other retail formats.
"Yes, it is changing," said Tilton. "Our [industry] is closely looking at the bottom line. Belts have had to be tightened. We don't have built-in inflationary factors, and it's much more competitive. Nonfood is finally beginning to get the recognition it has been due."
Looking ahead to the 21st century, Tilton sees GMDC facing many of the same challenges it does today.
He said there will be continued centralization and slower consolidation. Growth of alternate channels, and changing product offerings within those alternate channels will continue to influence the retailing. The ECR initiative will be carried into the 21st century.
"ECR a complex process," said Tilton. "It's not going to move simultaneously with all size organizations. The bigger ones with larger amounts of resources will move sooner, and by the time it's in place, it will be in 21st century."
Tilton also sees many future educational opportunities ahead for GMDC. "We see opportunities in the future where the industry is going to need an educational spokesman and leader for the nonfood part of the industry."
Finally, as industry consolidation continues, the challenge will be for associations like GMDC to maintain their viability and independence, said Tilton.
In the years past and for those upcoming, Tilton has viewed and will continue to view his role with GMDC as one similar to a director of trade development at a major manufacturer. "Except I am working it as an industry as a whole," he explained.
GMDC's success in the last 25 years has been to a large degree based on the continuity of leadership, purpose and direction that Tilton has been able to bring to the organization. That continuity provides the nonfood association with a solid base and strength to remain independent and grow as it heads into the uncharted seas of the 21st century.
