12 WHO MATTERED

DAVID ORGEL

The Food Marketing Institute's ability to maintain clout over the years has often been heavily attributed to the influence and commitment of its chairmen. So far 12 industry leaders have assumed this top elected position. The role is rotated among independent operators, chain store executives and wholesalers. Eleven of the executives who have held the chairman's post were interviewed by SN for this anniversary feature (the exception was Donald Schnuck, who passed away in 1991). They provided recollections of their roles and unique observations about the FMI's history.

CUTTING THE DEAL

Irving W. Rabb 1977 Stop & Shop Cos., Quincy, Mass.

"I missed a meeting, and it was the one in which they decided to merge, and they decided I was the one to do the merger. I learned that you don't miss meetings."

That's the recollection of Irving Rabb, who was referring to a gathering in which industry leaders agreed he would be the one to lead the merger of the Chicago-based Super Market Institute and the Washington-based National Association of Food Chains, which would eventually become the Food Marketing Institute.

Rabb was tapped in 1975 as interim chairman of the Joint Advisory Board (comprised of members of the NAFC and the SMI) that would lead the merger effort. Rabb, who was vice chairman of Stop & Shop and had previously been president, was 64 years old and his reduced duties at Stop & Shop enabled him to "devote most of my time to the merger activities."

Observers credited Rabb's patient negotiating with making the thorny melding process seem almost smooth. Rabb had to satisfy small and large operators to make sure both groups remained committed to the complicated process.

"I lived this for a year and a half," Rabb said. "I kept the thing together. It took about a year and a half to work out the issues. Among the things we focused on were getting balanced representation in the organization, how officers were to be selected and dues. We tried to get a balance for the FMI board structure based on the size of companies. The rivalries between NAFC and SMI washed themselves away very fast."

Picking a candidate to run the new entity was a key decision. The heads of the predecessor groups were close to retirement. Finding Bob Aders, a lawyer who was ending his tenure as acting secretary of labor and who had been a chairman of Kroger Co., was a major turning point, Rabb recalled. Aders was first a consultant to the JAB before heading the FMI. "That eliminated our search, because Bob had a background in government, the food business and associations. So it was what we were looking for. Bob Aders put us years ahead of the game because of his understanding of organizations and government."

Rabb's work paid off when the boards of the NAFC and the SMI approved the merger at a meeting in St. Louis in September of 1976, which was followed by membership approvals. The FMI opened its doors Jan. 3, 1977.

Rabb then served as FMI chairman for a few months until the 1977 May convention. He left satisfied the groundwork had been laid. "Very little has changed structurally about FMI over the years," concluded Rabb. "So it means a very good job was done."

QUELLING UNREST

Jack J. Crocker 1977-1979 Super Valu Stores, Minneapolis

Jack Crocker, the first chairman elected by the membership, was instrumental in holding the factions of the FMI together during arguments in the earliest days.

He hung a banner in the front of the room during board meetings with a quote from Benjamin Franklin that read: "We must hang together, gentlemen, or most certainly we will hang separately." And Crocker would help mend disagreements by bringing the attention of the board to that message.

Crocker was in many ways the ideal person for the job. "FMI needed a first chairman who was acceptable to both chains and independents," Crocker said. "I was acceptable because I'd been president of Fred Meyer, an NAFC chain, and was at the time chairman and CEO of Super Valu, which worked with independents."

Crocker shies away from taking credit for much of the work accomplished during his tenure, preferring to toast his colleagues. His term was marked by the FMI's reaching out to consumers, the media, government and other entities to begin improving the industry's image. Crocker also helped promote better relations for the young organization with other trade groups. A particularly important area was in discussions about technology.

"We recognized that the pace of technology change necessitated that all partners had to work together to take advantage of it," he said. "So when I was FMI chairman, I contacted the chairman of the GMA and soon after discussions were held between the executive committees of both organizations. They included scanning and other areas of technology. Such discussions became an annual event and helped open communications even as the issues themselves changed."

BUILDING TRADE RELATIONS

Donald O. Schnuck 1979-1981 Schnuck Markets, St. Louis

"If Don were alive today he would recount his strong leadership in trying to bring about industry-relations efforts at FMI," said Robert Aders, the founding president and chief executive officer of the FMI.

"Trade associations in the 1970s were territorial and there was scuffling," Aders recalled.

Schnuck came to office shortly after the first efforts to form an industry-relations conference failed. But Schnuck re-energized the effort.

His moves were instrumental in the development of the Industry Relations Committee and the annual Industry Relations Conference, which led to more positive interactions between trading partners and associations.

"That began the meetings that brought together trade associations and their chairmen and presidents, including the Grocery Manufacturers of America, the food broker organization, the National-American Wholesale Grocers Association, the National Grocers Association and other groups," Aders said. "It would eventually enable progress on public policy issues and topics ranging from category management to ECR."

Schnuck was also known for defending the industry, Aders said.

"He was chairman when President Jimmy Carter called in the industry for a dressing down. Carter was enacting voluntary wage and price controls and was trying to jawbone down the price of meat. But his data was wrong. Don led us in defending us on that issue."

STRATEGIC SAVVY

Stephen I. D'Agostino 1981-1982 D'Agostino

Supermarkets, Larchmont, N.Y.

Stephen D'Agostino was the chairman who got the FMI into some deeper thinking.

"One of my biggest achievements was to begin the discipline of having FMI set strategic plans," he said. "They hadn't been doing it up to that point."

The goal was to think about various scenarios for the future and then regularly update that process every two years.

"I wanted it to focus on the long-range direction in all areas: people, money, education and other things. The discipline is even more important than what the plan says."

These two-year strategic plans were renamed action plans in the early 1990s when the FMI launched an additional process of developing longer-range strategic plans that analyzed future trends using a wider time horizon.

D'Agostino said he was proud to be the youngest FMI chairman up to that time and to have represented a relatively small supermarket operation.

PLACING STOCK IN BONDING

Byron Allumbaugh 1982-1985

Ralphs Grocery Co., Compton, Calif.

Byron Allumbaugh thinks of trade relations when recounting the FMI's biggest achievements. The FMI's ability to forge strong bonds with other trade groups was a process that dates from the earliest days of the association. Allumbaugh was involved in those efforts over the years, including during his tenure as chairman.

"There used to be the feeling of competition between retailers and manufacturers," he recalled. "It was a hostile situation. Through industry-relations conferences and other means we worked on this situation."

Allumbaugh cited a plethora of examples to show how the FMI helped spur good relations. There was the agreement to place Universal Product Codes on packages years before they were really needed. There was the work on Uniform Communications Standards through an industry-relations group. A big accomplishment was working with manufacturers to get them to put codes on coupons for scannability at the checkout, he said.

One struggle that particularly stands out for Allumbaugh involved the negotiations over backhaul allowances.

"It was a big battle between retailers and manufacturers in the 1970s," he said. "We worked it out. Today it's just a matter of course. In the old days, a retailer couldn't pick up at the manufacturer's warehouse and receive any credit off his freight bill. And our trucks were going empty by the manufacturers all the time. And now we have a backhaul program in place."

Allumbaugh also pointed to the FMI's focus on operators of all size and its training programs as two of its greatest attributes.

FINANCIAL FINESSE

James L. Moody Jr.

1985-1987

Hannaford Bros., Scarborough, Maine

Long before becoming the FMI's chairman in 1985, James Moody helped steer the newly formed organization as the first vice-chairman of finance in the late 1970s. "We were worried about whether FMI could sustain itself and there were questions about whether the SMI/NAFC combination would take," recalled Moody, who helped direct the association into sound decisions.

"We made the decision to move the Chicago office to Washington, and that cost a fair amount of money," he remembered. "We didn't have much. It was a significant amount relative to resources. But it was the right thing to do." Moody also recalled the early decision to limit the amount of dues any one member could contribute. While that move may have cut into funding, it had the purpose of maintaining the viability of the smaller companies who couldn't afford as much. Eventually, these moves helped the health of the organization, which was able to build financial reserves from conventions and other projects, Moody said.

As chairman of the FMI, Moody was instrumental in advocating the position of distributors in the face of a congressional attempt to enact tax changes more favorable to manufacturers. "I testified before the House Ways and Means Committee and we were able to help level the playing field," he said.

SOCIETY-CENTERED

Allen I. Bildner

1987-1989 Kings Super Markets, West Caldwell, N.J.

Allen Bildner, who worked in various FMI roles from the early 1980s into the 1990s, points to the handling of societal problems as an important accomplishment for himself and the organization.

"Supermarkets had abandoned the cities by moving to the suburbs," Bildner said. "FMI started early in the game to help the inner cities. We had an enlightened group of directors and leaders. We understood societal problems since we were in the stores every day. So one of FMI's activities was to begin to focus on urban initiatives."

Bildner was founding chairman of the Urban Initiatives Task Force, a board-level committee.

"We made recommendations and visited stores all over the country," he said. "FMI began to provide education and understanding on this issue for member companies. Now supermarkets are moving into the inner cities with increased speed."

Bildner also highlighted the FMI's effort to promote diversity in the industry. There was a need to "build cultures that fostered diversity within supermarket companies" in the face of sharp growth in minority populations. Bildner said the FMI stepped up to the plate with efforts in this area, including the formation of a committee on diversity.

WEIGHTY ISSUES E.

Dean Werries

1989-1991 Fleming Cos., Oklahoma City

E. Dean Werries believes the FMI and its members have mastered the fine art of problem solving.

"At FMI the way to solve problems is to get the most important people involved into a committee to come to grips with the issue," he said. "During my tenure as chairman, there were issues existing in the industry that were particularly conducive to problem solving."

One of these was the shipping container issue. There was a growing problem with product damage in warehouses and employee safety hazards. The problem was rooted in case loads that were too heavy, Werries explained. With many cases weighing well beyond 50 pounds and 80-pound loads not uncommon, the industry recognized the need to reduce the weights. The recommendation was that weights should be no more than 40 pounds.

Werries call this decision an example "of how industry players -- manufacturers, retailers and wholesalers -- came together and said, 'we've got a system run amok.' I'm pleased I had a small part to play in the process."

The FMI also faced challenges on the food-safety front during Werries' tenure in office. Werries took the chairman's job in the wake of food-safety scares over Chilean grapes and Alar in apples. Recalling the Alar incident, Werries said, "FMI acted responsibly to educate lawmakers and consumers about apples and other issues of food safety. FMI prepared booklets and got the facts out."

WORLD-CLASS ASPIRATIONS

Richard J. Currie

1991-1993

Loblaw Cos., Toronto

As the first non-U.S. chairman of the FMI, Richard Currie felt a heavy burden upon assuming the role. "I knew that one day another non-American would be a chairman candidate and I wanted FMI to remember that a non-American had done a first-class job."

Currie got to prove his mettle because his term included a groundbreaking study on alternative retail formats, a first-ever long-range strategic plan and the selection process for the FMI's successor to its founding president.

The FMI's Alternative Format Study was an intricate document and probably its most expensive research to date. And it was extremely well received. It laid out a picture of how these operators, including warehouse clubs, managed to achieve great economies, partly through systems and logistics advances. "We needed to know the facts about this," Currie said. "We needed to learn from them. ECR was the outgrowth of that study."

The FMI's first long-range strategic plan, called FMI 2000, was the organization's attempt to peer out a decade into the future to predict trends and prepare itself. "It was an exhaustive piece of work," he recalled. "It helped us to better respond."

One of Currie's lasting legacies was his deep involvement in the process of picking Tim Hammonds as successor to the FMI founding president, Robert Aders.

SUCCESS WITH THE SUCCESSOR

Roger Stangeland

1993-1995 Vons Cos., Arcadia, Calif.

Roger Stangeland was a key player in the decision to elevate Tim Hammonds to head the FMI as successor to founding-president20Robert Aders. Stangeland was on the selection committee and became chairman in 1993, just a couple of months before the leadership transition occurred.

"We had been so long dependent on one leader, so after 17 years the decision to pick a new one needed a lot of care," Stangeland said. "We were trying to find a very knowledgeable leader who understood the organization."

The nine-month selection process -- which came just before Stangeland took the chairman's reins -- included some outside search help. It was crucial that the transfer of power would be seamless for the members, Stangeland stressed.

Finally, after much thought, the committee realized the best candidate was already in-house. They chose FMI veteran Tim Hammonds as the person best suited to accomplish the organization's goals.

"The results of the last four to five years have justified that," Stangeland said.

Stangeland became chairman just as Hammonds was preparing to take over the roles of president and CEO.

"My early chairman's role was to make sure the transfer went smoothly," Stangeland said. "I spent a lot of time with Tim to help the transition. It was easy because Tim was very professional."

Other focuses during Stangeland's time as chairman included raising the status of independent operators by making the independent operator committee into a board-level committee; stressing food-safety issues; and improving the FMI's diversity message by bringing on board the first woman vice chairman (Carol Bitter) and the first Latin-American on the executive committee (Henry Davis of Cifra).

INDEPENDENT THOUGHTS

Robert Bartels

1995-1997 Martin's Super Markets South Bend, Ind.

"We were able to give independent operators a higher profile," said Robert Bartles about his tenure as chairman and the FMI's efforts in general.

As head of a small operator, Bartles hoped his FMI role would help keep the independents' agenda on the front burner.

"These are challenging times for independents," he stressed. But since its founding the FMI has aimed to balance the interests of large and small companies, and the small ones aren't being overshadowed, Bartles said.

"The independent operator committee gives these companies representation on a board-level FMI committee," Bartles said. "We formed a number of self-directed share groups for independents. We were also able to bring some good independents on the board. Putting smaller companies on the board enables FMI to have a store-focused entrepreneurial viewpoint, which is especially important at a time of industry consolidation."

During his time as chairman Bartles also focued on merchandising-improvement programs such as meal solutions and category management, diversity-building efforts for the industry and other areas.

SAFETY FIRST

Mike Wright

1997-(term ends 1999) Supervalu, Minneapolis

Mike Wright's term as the FMI chairman is barely eight months old, but during this period food safety has been on the front burner.

The food industry has experienced a string of recent food-contamination scares affecting hamburgers, apple juice, cantaloupes and raspberries, among other products.

Wright points out that the FMI was a leader in the October unveiling of a $1 million consumer-education initiative. Its central feature is Bac, a bacteria-like cartoon character, whose image in electronic and print media campaigns and on supermarket posters is meant to raise the public's consciousness about safe handling, refrigeration and cooking practices. The FMI and the American Meat Institute began the effort last year and were eventually joined by government agencies and a wide range of industry groups.

"To get the government, consumer groups and associations under one umbrella is a major accomplishment," Wright said.

Wright also noted that the FMI and other groups have been pushing the government to approve irradiation for ground beef to make the food supply safer.

On other fronts, the FMI will shortly launch its second long-range strategic plan, which will attempt to gauge trends to the year 2010, Wright said.