Harris Teeter Leader Sees Opportunities for Small Brokers

MARK HAMSTRA

CHICAGO — Small, regional food brokers can succeed if they focus on the nuances of their markets and the needs of their individual customers, Harris Teeter President Fred Morganthall told a gathering of independent sales agencies here.

Speaking at the Independent Food Brokers Association Top-to-Top Conference at the Wyndam Hotel, Morganthall said consolidation among food brokers has been a necessary process driven by the need for efficiencies, and that the industry overall might be better served by having three national sales agencies than when it was more fragmented.

“For us, it's not a bad thing,” he said. “In many cases, we are dealing with the same people, who now have better technology as part of these larger companies.”

However, he said that just as regional food retailers have succeeded by knowing their local customers better than the national chains do, regional food brokers also can thrive.

“The independent brokerhas a great opportunity today,” he said. “The reason regional brokers are going to survive is, you are going to fight a lot harder to find those niche products than one of the big guys. You know your market better, and you know your customer better, than the other guys.”

Morganthall said he asked one of his buyers about his use of the national brokers, and the buyer said he tends to use the national brokers in all but a handful of markets — “but in those two or three markets, the small broker knows the market better,” Morganthall said.

On the downside, Morganthall said small brokers do not appear to have embraced technology as thoroughly as the larger brokers. Out of the 87 small-broker attendees at the conference, Morganthall said he could only find websites for 12 by searching the National Association of Retail Marketing Services website.

Morganthall also gave a brief overview of Harris Teeter, the 157-store chain of supermarkets owned by Ruddick Corp.

“We are a perishable retailer first,” he said, noting that the stores carry about 700 produce items. It is adding about 80 to 100 organic items in that department, he said.

Asked by an audience member about whether the chain is really seeing demand for organic products, Morganthall said that in 2006 Harris Teeter carried about 20% more organic turkeys for Thanksgiving than the year before — and still ran out the weekend before the holiday.

“That was our ‘Whoops!’ wake-up call,” he said.