40
GARY CHARTRAND
Chairman and CEO,
Acosta Sales and Marketing Co.
KEY DEVELOPMENTS: Fresh food acquisitions, development of the Acosta Center for Excellence.
WHAT'S NEXT: Moving into new channels of business; will play an expanded role with current clients and clients that currently in-source.
Celebrating its 80th anniversary this year, Acosta is going strong with plans for even more growth and expansion into new channels of business, expanding the company's departmental and geographical reach.
“The company was founded in 1927 by two brothers, Lou and Dan Acosta,” said Gary Chartrand, chairman and chief executive officer of the Jacksonville, Fla., company.
“Today, we provide services to over 1,000 clients, operate 63 offices throughout the U.S. and Canada and employ over 11,000 associates, who help generate $45 billion in wholesale sales. I am certain that in 1927 Lou and Dan could not have imagined this growth.”
Indeed, this year has been one of continual expansion through the acquisitions of five companies specializing in various categories that fit strategically with Acosta's future plans.
Beginning in February 2007, Acosta acquired Meyer & Associates, a Warwick, R.I.-based deli sales and marketing agent serving the New England market.
“By joining forces with Meyer & Associates, we will strengthen our deli business in this important geographic area as we build our presence in the perimeter of the store,” said Chartrand in a company release at the time.
The acquisitions of Crawford and Company Brokerage, Impact Food Sales and Amalgamated Brokerage Corp. continued expansion of the company's fresh foods platform in March. And last month, Acosta acquired Cincinnati-based A&J Busemeyer, giving Acosta a role in the general merchandise and pet supply products categories.
All of these acquisitions have deepened the company's relationship with Kroger. Wichita, Kan.-based Crawford and Company serves Dillon's, a Hutchinson, Kan.-based Kroger subsidiary, while Amalgamated Brokerage works closely with Kroger's Fry's and Ralphs divisions in the Southwest. In addition to its offices near Kroger's headquarters in Cincinnati, A&J Busemeyer also has a presence in Portland, Ore., has a long-established relationship with Kroger and is positioned to service major Kroger banners on the West Coast.
The implementation of world-class technology throughout the company's functional area has enhanced the level of service Acosta provides to clients and customers, Chartrand told SN.
“We believe this has been a critical factor in the development of new business for our firm. Our data warehouse, iQubed, gives us the ability to combine multiple data sources to get a deeper analysis. At retail, our handheld devices are powered by our proprietary North American Retail System, which provides associates with store-specific priorities. We also recently automated our sales administration process to standardize and simplify the activities in this area.”
The sales agency also rolled out the Acosta Center for Excellence (ACE), a Web-based and classroom-based learning and training curriculum for associates.
The company is also moving into new channels of business that will benefit from its core competencies.
“I think Acosta plays a critical role in the distribution of CPG products to the consumer,” Chartrand said.
“Our size and the scope of the sales and marketing function have been validated in the industry as a strategic benefit. We have built something very special that is not easily replicated.”
— AMY SUNG
41
RACHAEL RAY
Celebrity Cook
KEY DEVELOPMENTS: Empowering American consumers to enjoy cooking.
WHAT'S NEXT: Launching a cooking education and scholarship program.
Rachael Ray has her share of critics. They complain about the TV cook's lack of formal culinary training, her preference for middlebrow dishes and her propensity for coining words like “EVOO” (acronym for extra virgin olive oil) or “Yum-o.”
Yet, the 38-year-old star has built a media empire by connecting with the constituency that really counts: consumers. She understands they are time-pressed but still want to prepare quick meals without feeling intimidated. Her following is broad and loyal, and the food industry has taken notice.
“Her 30-minute meals program speaks to America's need for quick, convenient ways to prepare healthy meals,” said Mona Golub, vice president of public relations and consumer services for Schenectady, N.Y.-based Price Chopper Supermarkets, which has had a long-time affiliation with Ray. “She makes it clear that she's not a five-star executive chef. She's a cook who loves to cook, but without formal training. She believes people shouldn't be intimidated by the prospect of putting together meals.”
Mona Doyle, president of Consumer Network, said Ray has empowered a new generation of consumers just as Julia Child played that role in earlier years. “Julia empowered women to understand how recipes worked and gave them the freedom to depart from them and still turn out wonderful foods. Rachael Ray communicates the pleasure of cooking from your head and your stores, fridge, and pantry. Many stores are playing into this.”
Ray was born into a family that owned restaurants, and she worked in gourmet food retailing in her early 20s. After moving to Albany, N.Y., she launched a series of cooking classes for a gourmet market where she was employed as food buyer and chef, according to an online biography posted by her namesake magazine.
Ray's efforts were noticed by the local CBS television affiliate, which hired her for a weekly “30-minute meals” segment. During that period, Ray further honed her concepts at some Price Chopper supercenters by running cooking classes. Her television role was joined by a cookbook deal and soon an arrangement with the Food Network, which would lead to Emmy nominations.
The list of cookbooks multiplied over the years, and her message was further spread through a lifestyle magazine, Every Day with Rachael Ray, launched in 2005 by the Readers Digest Association. Last September, Ray launched an hour-long syndicated talk show produced by King World and Oprah Winfrey's Harpo Productions. Her food-industry tie-ins include a program with Nabisco Crackers in which her image appears on packages that promote her recipes.
Ray recently launched a nonprofit organization called Yum-o!, which “empowers kids and their families to develop healthy relationships with food and cooking.” The organization plans to achieve these goals through promoting education, funding scholarships and helping to lead the fight against hunger.
Ray's legions of fans are drawn to her energy, confidence and everywoman style. Perhaps her most important contribution is spreading the conviction that a meal should not be a big deal to prepare. Ray's TV segments show lightning-fast cooking, and her books come with names like “Rachael Ray's Express-Lane Meals.”
That approach has hit home for supermarkets, which are retooling perimeter and grocery aisles in hopes of being the preferred venue for meal solutions.
— DAVID ORGEL
42
CHARLES LLOYD
Chief Operating Officer,
GS1 US
KEY DEVELOPMENTS: Became the face of U.S. standards development last month.
WHAT'S NEXT: Supporting adoption of the DataBar, data synchronization and RFID/EPC.
Bar codes, data synchronization, RFID and electronic data interchange are the building blocks of commerce that allow food retailers and CPG manufacturers to run their businesses far more efficiently than they did 40 years ago when none of these technology standards existed.
In the United States, the organization that manages and commercializes these standards is GS1 US, Lawrenceville, N.J., formerly known as the Uniform Code Council. GS1 US is one of 110 similar organizations in countries around the world, all of which fall under the umbrella of GS1, based in Brussels.
Miguel Lopera, the chief executive officer of GS1, is also the CEO of GS1 US. However, since Lopera is based in Belgium, the chief operating officer of GS1 US is the person with the greatest day-to-day oversight of the organization. That person is now Charles “Chip” Lloyd, who just joined GS1 US last month.
Lloyd replaces Michael Di Yeso, president and COO, who left earlier in the year. Di Yeso made SN's Power 50 list in 2005.
Lloyd comes to GS1 US after 16 years with Unilever Foods (and Best Foods, which was acquired by Unilever), most of which was spent in senior executive positions in overseas markets including the United Kingdom and, more recently, Asia.
“My first exposure to GS1 was in Hong Kong,” Lloyd said. “The Hong Kong government used GS1 to drive major supply chain initiatives” in companies based there. He was intrigued by the key role GS1 played in the globalization of commerce, “creating a global network that enables companies to elevate their game and take disruption out of the business.”
As head of GS1 US, Lloyd oversees several divisions within the organization, three of which have a significant impact on food retailing: BarCodes and eCom (ecommerce); 1Sync, a data pool supporting data synchronization; and EPCglobal North America, which oversees the standards supporting RFID implementations using the EPC (electronic product code).
GS1 US has recently hired a chief marketing officer, Sabina Saksena. “She will try to connect the dots between the business units and identify untapped white space in underserved markets,” Lloyd noted.
One of the emerging technology standards that GS1 US is spearheading is the DataBar, a 14-digit bar code (in contrast to the 12-digit UPC code used on products in North America). The DataBar, which comes in different versions, is being groomed for use on everything from loose produce and fresh meat to coupons. Loblaw, Brampton, Ontario, is already scanning the DataBar on produce in 15 stores and plans to expand to other stores this fall.
“We need to have [perishables departments] participate fully in what technology can do to streamline retail operations,” said Lloyd. The DataBar will also help address the growing problem of product recalls in the produce department. “It will significantly improve [retailers'] grip on the supply chain,” he said.
Lloyd sees as part of his mission making technology and standards adoption easier for companies of any size. For example, he would like to add other GS1 standards to the GS1 US Data Driver, a computer-based interface designed to enable smaller vendors to easily create and manage bar codes for their products.
Perhaps Lloyd's biggest challenge will be to drive adoption of GS1 US's more recent technology standards — data synchronization and RFID (based on the EPC).
Data synchronization has made considerable progress in the past few years through the development of the Global Data Synchronization Network (GDSN), a division of GS1. As of last month, 11,356 manufacturers worldwide were synchronizing data through the GDSN. However, only 141 retailers/distributors were synchronizing data with manufacturers — a number 1Sync and other data pools are trying to expand.
RFID/EPC has been a thornier challenge. While Wal-Mart and its suppliers have been pioneering much of the RFID implementation in the supply chain, and European retailers like Metro Group have been pursuing a rollout, many U.S. food retailers have relegated RFID to modest pilots at best.
Lloyd counsels patience for both data sync and RFID. “Any significant technology takes a while to percolate into the system allowing users to feel comfortable and have a sense of readiness,” he said. “We're trying to remove the near-term barriers.” Even bar codes, he observed, “didn't happen overnight.”
— MICHAEL GARRY
43
JOE HANSEN
President,
United Food and Commercial Workers
KEY DEVELOPMENTS: Strengthening of local unions, while coordinating their efforts better at the national level.
WHAT'S NEXT: After Southern California, more negotiations on the West Coast.
Joe Hansen, president of the 1.3-million-member United Food and Commercial Workers, Washington, knew well in advance that 2007 would be a tough bargaining year.
“About 400,000 of our members in retail are having contracts expire,” he said, adding that negotiations “just seem to get tougher and tougher.”
Now, after tough 11th-hour bargaining sessions with Ahold in New England and with Kroger in Texas and Ohio, among others, the UFCW just completed a six-month marathon negotiation in Southern California. The terms, expected to be disclosed this week, will “set a tone and could set some guidelines” for what will happen in other contracts this year, notably in Seattle, Oregon and Northern California, Hansen said. “It's kind of resting now on Southern California, because you've got the rest of the West Coast hanging in the balance.”
Key to the UFCW's negotiating position this year is its new focus. After a breakaway from the AFL-CIO in 2005, Hansen and his team have moved to strengthen local unions in the food retail and processing industries, while at the same time helping to coordinate the locals on a national scale.
Three and a half years ago, a difficult strike in Southern California taught the UFCW a few things, according to Hansen. “We were slow to recognize it then,” he said, but “these companies are different now. They're national companies, they have a national strategy, and they look at the bottom line, and they get more involved in local bargaining. It's still bottom-line-driven, and that makes it hard to get settlements sometimes.”
The effort to counter this with a national bargaining strategy for the union was led by Pat O'Neill, the UFCW's collective bargaining director. Hansen said O'Neill “has done very well, where locals in Atlanta understand what's going on in Cincinnati, what's going on in California, and that it all impacts them, and that they can help each other.”
Hansen believes employers and unions are both beginning to realize that health care issues may best be solved in the long run by some kind of national approach. At a meeting this spring of a joint labor-management committee, Hansen recalled, “I said that shifting all the costs from the employer to the employee doesn't work, and Steve Burd [chairman, president and CEO of Safeway] was sitting right by me when I said it, and he agreed. Steve said that hopefully there has to be a national solution, and everybody was sitting there nodding their heads.”
Hansen said that strengthening of the locals has been the UFCW's biggest ongoing project this year. “They have to find a way to devote more resources to growth,” he said.
Earlier this month, Congress narrowly defeated legislation that would have given “card check” rights to those seeking to unionize workplaces. Hansen finds optimism, however, in how far the measure got this year, saying that the narrow defeat “lays the groundwork for future progress on the issue. I look at it as a stepping-stone.”
Hansen views the UFCW as a partner with employers in finding good solutions and building a better industry, even a better America. “I hate to see what's happening in this country — it's not the same country as when I grew up,” he told SN. “The opportunities are not there to get jobs and have a middle class and raise a family.”
“Working in a supermarket can be a great career,” said the former Milwaukee meatcutter. “If you've got a decent contract, decent wages and benefits, you know, these are the people who should end up running the stores, and eventually running the companies.”
— GEORGE ELLIS
44
THE AMERICAN FARMER
KEY DEVELOPMENTS: Adopting new practices in food safety.
WHAT'S NEXT: Promoting U.S.- and local-grown products.
As a group, American farmers have never been named to SN's Power 50 list, though their influence over consumers is immeasurable. Few groups get the level of attention — or scrutiny — from the federal government as farmers. They have a federal agency just for them, and, every five years, are subject to the terms of a giant, multibillion-dollar farm bill. Agriculture remains a foundation of the nation's identity.
“People are returning to the traditional foodways, and they're going to farmer's markets and to organic,” said Courtney Davis, spokeswoman for Oldways Preservation Trust, a food and culture organization in Boston. She added that those who work the land are regaining a profile that has been diminished by years of faceless industrial farming that has been the norm since World War II.
Farming in the 21st century is more technologically advanced, but the stakes are as high as ever, with fewer farmers feeding a greater number of people. Critics of such large-scale practices point to last year's E. coli outbreak in fresh spinach as an example of what can go wrong when agribusiness gets too big. The incident cleared shelves of the fresh leafy green, frightened consumers and compelled the industry to accelerate adoption of food safety programs.
“Ultimately, the only thing that people can do is be more responsible about how they shop and what they buy,” Davis said, noting that this attitude raises the farmer's profile as a result.
Indeed, one of the biggest changes farmers have seen in the past few years isn't fear, but a wave of consumer nostalgia, a reawakened desire to know not just what they grow, but who they are and what practices they follow.
“Obviously, ‘local' has become an important buzzword, and supermarkets would like to be a part of that trend,” observed Jerusha Klemperer, spokesperson for Slow Food USA, a nonprofit group devoted to American eating traditions. “Hopefully they will see that consumers enjoy eating food that is fresher — which it will certainly be, since it has traveled a shorter distance to get to the shelves — and enjoy supporting their local economy.”
As an outlet for food sales, as well as a direct link to consumers, supermarkets have emerged as ideal platforms for farmers, who speak through a language of variety, abundance and consistency. Retailers celebrate the farmer today by highlighting seasonal produce or even bringing farmers right into stores to tell their own stories. Every year, chains like Food Lion, Salisbury, N.C., create whole merchandising schemes around in-season, locally sourced fruits, vegetables and proteins. The retailer's “Got to Be NC Products“ campaign, now in its second year, includes not only products, but also brochures profiling the farmers and their operations.
Though agriculture has become highly industrialized, and is subject to the problems that come with that kind of size and scale, the image of the American farmer as a provider of sustenance and essential goodness is no myth.
— ROBERT VOSBURGH
45
JOHN PARTRIDGE
Interim President,
Visa USA
KEY DEVELOPMENTS: Retailer lawsuit; greater Congressional scrutiny; company reorganization.
WHAT'S NEXT: A new corporate structure; possible legislation regulating interchange fees.
John Motley believes that John Partridge, interim president of Visa USA, is an excellent choice to be on SN's Power 50 list.
“That gentleman and his organization have a tremendous influence on how food retailers go to market and conduct business,” said Motley, senior vice president of government and public affairs for the Food Marketing Institute, Arlington, Va.
The influence that Visa — and to a lesser degree MasterCard and other credit card associations — have on food retailers stems largely from the ever-rising interchange fees that retailers are required to pay for every credit and debit transaction that goes through their POS systems.
Interchange fees now average 2.16% of the transaction amount, compared with 1.10% a decade ago, according to Motley. That's a huge burden to bear for food retailers, whose profit margin only averages 1.46% of the transaction amount. Credit and debit transactions now comprise slightly more than 60% of sales, said Motley.
FMI argues that only 13% of interchange fees go toward securely processing transactions. A large part of the fees is used to finance massive marketing campaigns and generous rewards programs, which “retailers don't believe they should have to pay for,” said Motley. Moreover, FMI charges that Visa and MasterCard are “anticompetitive and hidden” in their interchange practices.
Visa and MasterCard counter that plastic payment drives business for retailers, as well as checkout line efficiency. Retailers, they say, appreciate the benefits of plastic cards but balk at paying for them.
Formerly president of Inovant, Visa's transaction processing subsidiary, Partridge only became interim president at Visa USA, San Francisco, late last month; it is unclear how long he will hold the position. He replaced John Coghlan, who was Visa USA's president and chief executive officer. Visa has not named a new CEO.
Partridge also served as a member of Visa USA's executive management committee for the past eight years, “giving him a thorough knowledge of the U.S payments business,” according to a Visa statement.
The shake-up at Visa USA comes as Visa Inc., the parent organization, also based in San Francisco, continues a 12- to 18-month reorganization announced last October. Under the reorganization, which will be followed by an initial public offering, all of Visa's regional units, including Visa USA, will be folded into Visa Inc.; only Visa Europe will remain a bank-owned regional organization.
Visa's reorganization follows one already executed by MasterCard, which is now publicly owned.
FMI's belief is that the changes at MasterCard and Visa are not likely to have any effect on the interchange issue. “[Visa and MasterCard] believe that if they change into a business form with transparency, they will protect themselves going forward,” said Motley. “But our lawyers don't believe that's the case.”
Visa has quite a bit to protect over the next few years. For one thing, it is defending itself in another major lawsuit that represents the consolidation of more than 50 suits brought by a wide array of food and other retailers. The suit, brought in the Federal Eastern District Court in Brooklyn, is in the discovery stage.
On top of that, the Merchants Payment Coalition, Washington, which represents several retail trade associations, including FMI, has been leading an effective effort to get the interchange issue in front of Congress.
The latest example occurred just last week, on July 19, when the House Judiciary Committee's Antitrust Task Force held a hearing on the practices of Visa and MasterCard.
“We're reaching critical mass on this issue,” said Motley. “At some point a bill will emerge — this year, we hope, though it may not pass until next year.” He is hopeful that President Bush would sign a bill that has bipartisan backing.
— MICHAEL GARRY
