How the World Came to IGA

ELLIOT ZWIEBACH

THE GLOBALIZATION OF IGA started more or less as a fluke.

It was 1984, and Ito Chu — a Japanese company that manufactured ultra-suede clothing — had just inherited a group of small warehouses and was looking for a marketing plan for them, Tom Haggai, IGA chairman, recalled.

“They conducted a study, and in the course of that study they learned about IGA. Being in the clothing business, they called one of their American-based suppliers of cotton and asked them to check us out. That's when I got a request for the Japanese to visit us in Chicago about the possibility of getting some help from us.”

At about the same time Davids Holdings, one of Australia's largest wholesalers at the time, was preparing to bring a planeload of its retail customers to the Food Marketing Institute convention and sought the help of Bob Aders, then FMI's president, to arrange for a luncheon speaker. That speaker turned out to be Haggai.

“After my talk, they invited me to come to Australia and talk to them about how to bring IGA to their country,” Haggai said.

“Both the Japanese and the Australians told us American supermarkets were considered the best in the world, so one of our best competitive weapons at the time was that no nation had a food industry as efficient as the U.S. did, and duplicating that efficiency with independent, family-owned businesses could be the right way to operate outside the U.S. as well.

“They also told us they liked the idea that we are an alliance — an alliance of retailers, wholesalers and vendors — and the only organization like that.

“So we did a feasibility study on both Japan and Australia — in part to figure out why they wanted us — and we concluded that we would only expand abroad if it meant something for those countries.

“Having seen how IGA grew when we expanded it to Canada in 1960 made me believe it could work in Australia, and Paul Smucker, then chairman of Smucker's, urged us to expand to Japan and offered to host the first international dinner there,” Haggai said.

IGA also got valuable input from Coca-Cola, he added. “Coke had already expanded globally, and it helped us as we moved forward by telling us how to expand into other parts of the world. We wouldn't have known what to do without Coke.

“What Roberto Goizuetta, Coke's chairman at the time, told us was to go into every country that wants us. He also told us that, if we were not willing to fail, then we would never reach the level we might hope to achieve.”

At IGA's annual convention in 1985, IGA and Coca-Cola executives got together with representatives from Japan and Australia “and asked what we could do to help them,” Haggai said.

The result was the development of the IGA Coca-Cola Institute, which serves as a training arm for IGA. “Our approach was to teach retailers around the world things that worked for us in U.S. that they could repeat in their own countries, which would serve as a platform for the world.”

Haggai may have been the right man in the right place to open the world to IGA because of his background — as a speaker for the military around the world during his early adult years, as a radio commentator, as the son of a Baptist minister and as a minister in his own right.

“My father was a well-regarded scholar, so there were people coming by our home all the time to pick his brain while I was growing up, and my mother would invite them to supper. That meant I had to settle for a wing instead of a drumstick, but what I learned at the table was that all people are equal.

“As a result of those experiences, I was very culturally attuned” — a skill that has served him well as IGA has grown globally, he said.

In China, a one-hour conversation can include a 45-minute discussion about family and just 15 minutes of actual business, he pointed out, “and it may seem like very little of consequence has been accomplished. But while you are talking about family, the Chinese are measuring you to determine if they want to do business with you.”

Haggai said he doesn't use a translator when he goes to China. “How do I know what they're saying?” he asked. “To me, 85% of communication is body language.

“But in Japan it's harder to read the people, so I always use an interpreter there.”

At 80, Haggai believes his age is an asset to IGA when dealing with foreign cultures.

Asked if he might consider retiring, Haggai declined comment, saying, “If my health stays good…” before trailing off without finishing the thought.