Viewpoints

How Distributors Excel by Overcoming Size Challenges

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By David Orgel
Editor-in-Chief

Size is everything.

At least that was the mantra of the late 1990s, when food distributors sought to grow at all costs, often to their detriment. Now companies have a more realistic picture of the pluses and minuses of scale.

This week SN spotlights the industry’s largest retailers and wholesalers with the annual Top 75 report, a pullout section appearing after Page 32. It turns out the largest operators are getting larger. Each of the top 10 companies grew in volume last year, some of them by surprisingly big amounts.

That’s good news for those firms, but there are clear downsides too. One of those is the difficulty of executing. It’s hard enough to excel at something, but harder still to replicate it across a far-flung organization. However, there are giant companies that have managed to do just that.

Three of those are cited in this week’s SN as part of our annual industry awards report, which begins on Page 14. SN’s 2007 Community Service Award goes to C&S Wholesale Grocers, our Champion of Diversity Award winner is Supervalu, and the Marketer of the Year Award recipient is Mike Haaf, Food Lion’s senior vice president of sales, marketing and business strategy. The winners were chosen by SN editors based partly on industry nominations.

All three of the companies mentioned are large. How large? Supervalu and C&S are among the top 10 in SN’s rankings, while Food Lion’s parent, Delhaize America, is also in the top 10. So why wasn’t size a roadblock to excellence in these situations?

In the case of Supervalu, our diversity award winner, scale definitely kept things challenging. Supervalu’s $12.4 billion purchase of Albertsons’ top assets last year led to a monumental task of melding two giant organizations and integrating best practices. Fortunately, there were a lot of strong diversity initiatives to pull from on both sides. The result is that Supervalu has a diverse board and impressive program of diversity affinity groups and has named a vice president of diversity and inclusion. It also works to maintain a diverse supplier base.

The story of C&S, who we recognize for community service, is also one of fast growth. As it expands, this company, which now operates in 14 states, has actively sought to be viewed as a leader in its communities. Its practice of approaching community service through multiple layers — including financial contributions, employee volunteerism, disaster relief — has helped spread the effort throughout its organization.

Meanwhile, Food Lion’s Mike Haaf, winner of our marketer award, is proving that large companies can customize stores for shoppers. Haaf has worked for four years to customize the shopping experience across some 1,300 stores. After extensive research, this executive identified eight customer segments and created some 13 store clusters to address those groups. The end result was to make each shopper feel their store was created with them in mind.

Congratulations to all involved for turning corporate mass into a plus for these organizations.

Contributors

David Orgel

David Orgel is executive director, content & user engagement, of Supermarket News (SN) and its website, SupermarketNews.com. Orgel delivers his opinions on industry trends through a bi-weekly...

Jon Springer

Jon Springer has been writing about food, food retailers and food retailing for more than 10 years, and is in his second tour of duty with Supermarket News. His prior experience includes covering the...
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