Change Agent

MARK HAMSTRA

Ric Jurgens, the chief executive officer of West Des Moines, Iowa-based Hy-Vee, has worked at that same company for 40 years. And during the company's 78-year history, he is only the third person to hold the title of CEO.

Ric Jurgens

He brings this background of stability to his new role as chairman of Arlington, Va.-based Food Marketing Institute, which by contrast has been undergoing some drastic changes and is seeking to find a more stable course.

This marks the first year in decades without a traditional FMI Show packed with vendor booths, and it also marks the debut of the association's new educational format, FutureConnect, billed as the new “FMI Leadership Institute” for developing the executives of tomorrow for retailers, wholesalers and CPG companies. Jurgens is slated to begin his two-year stint at the FutureConnect conference this week in Dallas. (After this story was written, FMI indefinitely postponed FutureConnect out of concerns for the flu outbreak.)

In addition, the association is working under the direction of a new president and CEO, Leslie G. Sarasin, who is expected to lead further changes in the way FMI does business.

“My No. 1 priority will be to help Leslie Sarasin through her first year as the leader of FMI,” Jurgens told SN. “She is off to a great start, but she still has many challenges ahead and she will need my full support. Together, we will work together to make sure that FMI meets its members' changing needs.”

As chairman of FMI, Jurgens succeeds Steve Smith, the CEO of K-VA-T Food Stores, Abingdon, Va., who presided over the transition in trade-show formats at FMI and over the change in leadership, with Sarasin replacing longtime FMI President and CEO Tim Hammonds. Hammonds left the association about a year ago, and the group spent about six months searching for a successor.

Interestingly, the search committee was headed by former FMI Chairman Ron Pearson, who was Jurgens' predecessor as CEO of Hy-Vee.

Jurgens said he also sees the need to focus on strengthening FMI's financial position. The association has streamlined itself to some degree and relocated to Arlington, Va., from Washington, D.C., in a cost-saving move, but, as Sarasin previously explained to SN, the financial model of the organization going forward will depend upon its redefined mission as an association.

Jurgens is part of the revived Strategic Thinking Committee at FMI that begins meeting this spring to reevaluate what services FMI should be providing for its members and then how to fund those services.

“Leslie has already proven that she is a strong fiscal leader, and I have every confidence that she will help us manage our way through any changes as we move to the future,” he told SN.

Jurgens agrees that FMI will need to work closely with other associations as part of that effort.

“I see partnering with other trade associations as an absolute must,” he said. “Many other associations' reserves have been hit by the stock market, and they are looking for ways to save money. Eliminating duplication of services can be an excellent way for all associations to improve their bottom lines.

“Having said that, I think we can make the events better because of their multidimensional approach and perspectives to the development of our conventions and meetings.”

Among the recently announced partnerships are the co-location of the FMI Pharmacy Conference with the Global Market Development Center health and beauty care trade show later this year, and the pairing of the Grocery Manufacturers Association Executive Conference with the FMI Midwinter Meeting beginning in 2011.

Sarasin recently told SN she sees more opportunities for such collaboration in the future, although she said FMI is not heading down the path toward any larger-scale mergers with other associations, such as the recently announced agreement between the National Retail Federation and the Retail Industry Leaders Association.

FutureConnect

Although the inaugural FMI FutureConnect educational conference debuts this week in Dallas amid a severe economic downturn, Jurgens said attendance at the event is projected to exceed expectations, with nearly 2,000 people registered.

“Our attendance for FutureConnect is strong and growing,” he said. “We believe this is the perfect time for companies to invest in their people — not only retailers and wholesalers, but also manufacturers and brokers.

“All indications are we will be staring in the face of an employment crisis in the not-too-distant future, and we need the most talented people possible trained and ready to confront any challenges sent our way. If the current economic situation has taught us anything, it should be that preparedness is key.”

Jurgens pointed out that Hy-Vee itself plans to send 160 employees to FutureConnect, from both the store and corporate level.

The format for the FutureConnect concept was unveiled last year, a year after FMI first said it planned to rotate the traditional booth show to an alternate-year schedule and move it out of Chicago. The show will now rotate to Las Vegas again in 2010, while FutureConnect will return to Dallas in 2011. In addition, FMI plans a series of ongoing training and educational sessions following this year's event that will tie into FutureConnect.

Despite the weak economy as the backdrop to its launch, the viability of FutureConnect is not in question, Jurgens told SN.

“Our members and the Strategic Planning Committee have told us that [the FutureConnect conference] is imperative for the Food Marketing Institute,” Jurgens said. “The event will continue to grow, and our challenge will be to be responsive to attendees' feedback so we can make the event even better in the future.”

Legislative Agenda

In addition to the changes taking place at FMI, the association is also facing a new legislative era in Washington, with a Democratic administration and strengthened Democratic majorities in both houses of Congress.

“The new administration will have no impact at all on FMI's [legislative] agenda,” Jurgens said. “However, it may have an impact on our approach, and we certainly will be talking to a different set of leaders than in the past.”

He pointed out that one of the new members of President Obama's administration, U.S. Department of Agriculture Secretary Tom Vilsack, is the former governor of Hy-Vee's home state, Iowa.

“One benefit we have is a firsthand acquaintance with the new secretary of agriculture, Tom Vilsack,” Jurgens said. “We not only know him personally, but we also know of his abilities, talents and open-mindedness.”

Some of the key priorities for Food Marketing Institute as Jurgens steps in as chairman include food safety legislation, the Employee Free Choice Act — known as “card check” — and the issue of credit card interchange fees.

“While we have very challenging issues and are dealing with a new administration, we also have a great staff that is headed by [FMI Group Vice President of Government Relations] Jennifer Hatcher,” Jurgens explained. “They will help us do the best job we can to keep the dialogue open with our legislators about how their actions could affect the industry.”

The association is making some progress on its key legislative issues.

The Employee Free Choice Act appears to be losing steam as some key senators have withdrawn their support, although there has been increasing discussion of some sort of compromise bill.

And FMI is hopeful that the Democratic administration will pay closer attention to credit card interchange fees, especially after Obama last month met with credit card company executives and expressed concern about their practices with regard to consumers. Sarasin sent a letter to the administration calling attention to the cost of interchange fees.

The fees in question — some of which were increased last month — involve charges that retailers pay per transaction, and they have been rising as a percentage of retailers' costs, according to FMI. The association and other members of the Merchants Payments Coalition have been supportive of the Credit Card Fair Fee Act, which would allow retailers to negotiate transaction fees with credit card companies, among other provisions.

Food Safety

Perhaps the most visible issue facing food retailers since the new administration took office has been food safety. In the wake of this year's salmonella-related peanut-product recalls and the string of other scares in recent years, FMI has called for systemic changes in the nation's testing system and for more funds for the Food and Drug Administration to better conduct that testing. It also created a recall portal in an effort to coordinate supplier communication of product-recall information.

“I am particularly proud of what FMI has done to address food safety,” Jurgens told SN. “People talk a lot about the health crisis in America, and to me food safety is one of the most important elements of health care. FMI has created the recall portal and the Safe Quality Foods program.

“Our leadership wants FMI to be proactive in creating a safer food supply as opposed to being reactive in response to government concerns, so we are going to continue to push to find ways to make the food supply safer, to make sure Americans have total confidence in the foods they eat.”

In addition to food safety, Jurgens cited as one of his top priorities the obesity problem in America and the need to focus on helping to “make America a healthier country.”

He also credited his predecessor with helping to steer the agenda for the association.

“I have the good fortune of following Steve Smith as chairman of FMI, and if we keep our eyes pointed in the direction he set us on, we'll be fine,” Jurgens said.