Frederick Morganthall II, the new chairman of the Food Marketing Institute, has experience in the CPG industry, the retail industry, and in bridging the gap between the two.
He began his food-industry career in the packaged soap division of Procter & Gamble, working with retail customers in Michigan. He later joined Spartan Stores, in Grand Rapids, Mich., and eventually Harris Teeter, the Matthews, N.C.-based chain considered one of the nation's premier operators, where he now serves as president.
At FMI, Morganthall has worked to forge a better bond between the CPG and retail worlds, repairing relations with the Grocery Manufacturers Association while he was serving as the chairman of the FMI Industry Relations committee from 2007-2009.
“I think FMI and GMA had grown apart a bit at that time, and I think we worked — together with Steve and Ric — to bring the two back closer together,” Morganthall told SN, crediting past FMI Chairmen Steve Smith and Ric Jurgens. “I think as time has gone on, the two associations really have worked better together.”
Morganthall hopes to expand upon that theme of collaboration and inclusiveness during his tenure as FMI chairman, which begins at the FMI Future Connect 2011 conference in Dallas this week.
In an interview with SN, Morganthall said he sees continuing opportunities to further the trading partner alliance, a formal agreement created between FMI and GMA through which the two associations have sought to work together on conferences, legislative issues and other matters.
“It sounds trite, but it really is about sitting down and talking with each other and seeing what each other's needs are,” Morganthall explained.
Although he said he sees GMA as the primary partner for FMI, he said FMI is also open to partnerships with other industry groups as well. He cited the planned partnership among FMI, the American Meat Institute and the United Fresh Produce Association to co-locate their conferences in Dallas in May of 2012.
“I think that's a great move,” Morganthall said of the partnership for the 2012 FMI Show. “It gives our members the opportunity to not only go to the FMI show but to see the produce and the meat folks at the same time. We've done that it the past, and it's worked out very, very well.”
The alliance between GMA and FMI has yielded collaborative trade show efforts, including a supply chain conference, a conference on unsalables and a conference on environmental sustainability. The two groups also worked together on the Nutrition Keys front-of-pack labeling initiative unveiled earlier this year.
Morganthall said FMI is open to other opportunities for joint conferences as well, which can cut down on association costs, providing they meet other association objectives.
“It has to work for all the associations involved, and every association has specific views about what they want to achieve and what they want to share. It's tricky, and it's not as easy as it sounds, but I know FMI is looking at that,” he said.
Morganthall's platform of collaboration and inclusiveness also extends to increasing its efforts on behalf of the independent operator at the association, which historically has been known for representing a broad swath of the supermarket industry.
“We really recognize the importance of the independent operators at FMI, and we have to realize how best to serve them,” he said. “They do a great job of talking to their representatives and senators, they are very much listened to by their local governments, and we have to encourage their participation in all the FMI industry events.”
Inclusion also extends to the makeup of the FMI staff itself, Morganthall explained.
“We are in a very diverse society today, and FMI probably needs to better mirror the world we do business in,” he said.
He credited Leslie Sarasin, FMI's president and chief executive officer since 2009, for putting together a strong FMI staff, however.
He also credited the two past chairmen, Smith of K-VA-T Food Stores and Jurgens of Hy-Vee, with refocusing FMI for the future.
“I think Steve did a fantastic job of reinvigorating FMI, and Ric's done a lot on top of that building the organization by working with Leslie and her team. So, it's kind of a fun role for me to walk into, after those two guys did an excellent job.”
Among the initiatives FMI has debuted in the last two years is the Future Connect conference, which began alternating with the traditional FMI Show in 2009. Even though the first version was delayed for five months due to a flu outbreak, the event was a success in terms of attendance and attendee feedback.
“Future Connect is really a result of our officers in years gone by feeling that we needed to do a better job with education, and that we needed a cornerstone meeting around it, and that's something Future Connect has become, and it is something FMI does well,” Morganthall said.
“There is room for improvement, and we can always keep working on several topics — and new technologies is something we can address, and changes in the economy and the competitive environment are going to cause us to look for ways to work with our retailers without increasing our costs.”
He said FMI has “high expectations” for this year's Future Connect, which was expected to be as well attended as the inaugural version.
“I think it is going to be a multi-year building process,” he said. “I think it will be better this time than it was the last time, and two years from now it will be even better, because we will all know a little more about what our retailers want.”
He said the industry has a need for an event like Future Connect — designed to provide training and development for up-and-coming industry management.
“We as an industry need a place to train future leaders, and I think this is just a great place to do it,” Morganthall said. “I am really committed to this, and our members are too. I really think there is a lot more value to unlock, and even for more manufacturers to bring their people to this event. I think we have a lot of room to grow, and I am looking forward to being there, I am looking to forward to seeing what the folks that Harris Teeter is taking there learn and bring back.”
The chain is sending more people to the conference this year than it did in 2009, “because our folks felt so good about it at Harris Teeter,” Morganthall said.
Government Relations
While FMI's role as a provider of education and research is top of mind this week at Future Connect, Morganthall pointed out that the association's primary strength lies in government relations.
“Government relations is very strong at FMI, and I know it is one of the reasons I have been as closely involved as I have been with FMI — I am not very good at it, but FMI is,” he quipped. “I felt the need from our company's standpoint to be a part of FMI's overall work that they do with government relations, and I think they do a very good job.”
He praised the work Jennifer Hatcher, FMI's senior vice president of government and public affairs, and her team for the work being done on the legislative front on several issues.
Among the most pressing legislative issues for FMI membership:
• Credit- and debit-card interchange fees are “at the top of the list” of legislative priorities, Morganthall said, as financial firms battle to weaken debit-card reforms that were part of last year's financial-services overhaul.
“It's an uncontrollable cost that exceeds our profit margins in most transactions,” he said. “And it's a pretty tough fight between us and the rest of the world. The banks have really spent heavily in their lobbying efforts on this, so it's a tough uphill climb.”
• Loosening restrictions for health coverage mandates involving part-time workers. “We need to make people understand the large role of part-timers in this industry,” Morganthall said.
Health care reforms initially called for monthly evaluations of employee full- and part-time status, but FMI has sought yearly reviews instead. Retailers are also concerned about requirements that accompany providing insurance to part-time workers.
• More-frequent distribution of food benefits for the needy through the Supplemental Nutrition Assistance Program and the Women, Infants and Children service.
Retailers have been pressing for benefits to be distributed more often than once per month, to avoid the binge-buying cycles that accompany the beginning-of-month checks.
“It would make it easier to schedule our workforces, and frankly make it easier to order product and be in stock for those customers when they come in and shop,” Morganthall explained. “It would be very beneficial.”
• National Labor Relations Board issues, both legislative and regulatory.
-
“There is nothing more important to us than our associates, but the mandates envisioned by the NLRB do nothing to empower the associates, and it really makes it burdensome,” Morganthall said.
After the fading of the “card check” legislation that would have made it easier for workers to form unions, retailers said the NLRB has been pursuing legal and regulatory actions to achieve similar results.
Another key area where Morganthall sees FMI excelling is in food safety, an issue that the association has focused on for several years. He credited Danny Wegman, chairman and chief executive officer of Wegmans Food Markets. for leading FMI's efforts.
“FMI has done a great job with [the Safe Quality Food Institute], with Rapid Recall Exchange, with SafeMark and with the Partnership for Food Safety Education,” Morganthall said, naming the certification, product recall, industry training and consumer education programs. “Food safety is a top priority for FMI, from where the food is grown to where it is being consumed by the customer.
“And it is a high priority for every member at every company — we all feel very strongly about that,” he added. “Our customers expect it of us, and we have to continue to deliver.
FMI could also play a role in communicating with the public about rising commodity costs and the pressure that is having on prices, he noted.
“I see the role of myself and our officer team as working with Leslie and her team to focus on what our member needs are, and to address other priority issues on behalf of the industry,” Morganthall concluded. “I think our role is to make sure that all FMI members feel included in what FMI is doing.”
