Delhaize Trims Sales Agencies

MARK HAMSTRA

SALISBURY, N.C. — Delhaize America here has implemented a new “preferred broker” program that it hopes will make its category management and buying functions more efficient.

The company, parent of the Food Lion, Hannaford Bros. and Sweetbay banners, has issued a list of 33 approved sales agencies — down from about 150 it has been working with — that will be permitted to call on the company’s buyers going forward.

“We wanted to be as efficient as possible, and align ourselves with the most powerful group of brokers that we could find that we are already working with,” said Mark Doiron, chief supply officer, Delhaize America, in an interview with SN. “That is what started this very long and rigorous process.”

The effort, he explained, grew out of the company’s consolidation of the category management functions at Delhaize, which was completed in July. Delhaize now has single-category managers responsible for each category for the entire organization — more than 1,600 stores in 17 states — rather than having different buying groups for Hannaford and Food Lion.

To qualify for the Preferred Broker Network, sales agencies were evaluated on a range of criteria, Doiron said, including their knowledge of local markets, their category expertise and their performance as brokers.

“We looked at how responsive they have they been, and whether they have been able to provide us with innovative solutions,” he explained. “We wanted to set ourselves up to be as efficient as possible, and wanted to align ourselves with the group that would help us be more successful and consumer-driven.”

Some sales-agency executives contacted by SN were surprised that Advantage Sales and Marketing, Irvine, Calif., one the “big three” national brokers, was not on the list.

Doiron said Delhaize “knew the process would be difficult” for some involved, but declined to discuss specific details about companies affected. Both Acosta Sales & Marketing and Crossmark, the other two national agencies, are on the list of preferred brokers. In addition, Marketing Management Inc. remains the company’s preferred broker for private label, according to a memo sent to sales agencies and vendors, a copy of which was obtained by SN.

Vendors can also choose to work directly with Delhaize buyers rather than go through a broker, the company said in the memo.

Advantage could not be reached for comment.

“Throughout the process, we were very open with the broker community, and quite frankly, they [sales agencies] helped us shape this,” Doiron said.

He said Delhaize has received “a whole spectrum of feedback, as we fully expected,” on the transition to a streamlined network of brokers.

“Change is very hard, and not everyone will accept change in a positive way,” Doiron said. “Some have embraced it.

“We took a lot of time, energy and care in making these decisions. We knew that these were bold decisions, and we knew these were going to affect some positively and some negatively, but through this whole process, we were thinking about what does Delhaize America need to be more successful.”

The Preferred Broker Network also applies to sales agencies that perform in-store functions such as resets, Doiron explained.

“We want fully integrated partnerships, from field to fork,” he said.

The transition of vendors to the Preferred Broker Network is expected to be “substantially completed” by the end of this year.