LAS VEGAS — Independent food brokers were given high marks for service by an internal survey of about 200 Unified Grocers buyers, category managers and advertising specialists.
More than 80% of the Unified workers who were polled rated independent brokers as good, very good or excellent, according to Phil Smith, executive vice president and chief procurement officer for Los Angeles-based Unified, who presented the data at the Independent Food Brokers of America Top to Top Executive Business Conference here last month.
“We're seeing a renaissance for independents,” Smith told attendees, referring to the independent retailers that jointly own the cooperative wholesaler. “Our customers are agile, just as you are agile as independents. We think independent brokers will be successful as well.”
The Unified employees also rated independent brokers highly on the quality of their local-market expertise and their ability to conduct category-management functions at headquarters, but they gave the independents less credit than their national-broker counterparts in one area: their presentation of fact-based solutions.
Only a little more than half of the Unified personnel who voted gave the independent brokers a rating of “good” or better on their presentation of sales data, vs. about 76% who rated national brokers as being “good” or better in that area.
“That may be an opportunity for you,” said Smith.
As he presented the results of the survey, independent brokers in the audience used electronic polling devices to predict the survey results themselves.
Smith also gave an update on Unified's business and the status of its ongoing integration of last year's acquisition of Associated Grocers of Seattle.
The biggest challenge of the acquisition, he said, was in converting technologies.
“It comes down to systems integration,” he said. “That's the hardest part — we're running parallel systems now, and we are going to take it slow, and not make some of the mistakes we made in the past.”
Smith said the acquisition — in which Unified, then still known as United Western Grocers, paid $40 million for a business that generates about $900 million in sales a year — worked well for both companies, noting that Unified hired most of the personnel at AG, did not assume any existing store leases, and paid for the deal with its existing credit line.
Excluding the AG acquisition, Unified had 6% top-line growth in 2007, Smith said, or about $180 million, $30 million of which was from net new-customer growth. He said the cooperative expects to add some 50 to 55 new stores this year as well.
“We are getting bigger, but we still think of ourselves as a regional company,” Smith said, noting that Unified divides its operations into three regions: the Pacific Northwest, which includes the business acquired with AG; Northern California; and Southern California.
Operating regionally allows the company to provide services closer to retailers in each market, he said.
“We have a lot of member support services in each region — we don't roll it all up centrally,” he said. “We like to have that local expertise.”
Although Smith said the outlook is very positive for Unified in the year ahead, attendees had a much less than optimistic view of the economy overall in the U.S.
Using the interactive tool that allowed audience members to vote electronically on questions at the presentation, Smith asked attendees to predict the direction of the economy. Sixty-three percent said they thought “it will get worse before it gets better.”
