M-C MCLANE LAUNCHES IMPORT BUSINESS FOR U.S. RETAILERS

ELLIOT ZWIEBACH

HOUSTON - In an effort to put midsized wholesalers and retailers on an equal footing with Wal-Mart Stores, Target, Safeway and Kroger when it comes to imports from China and elsewhere in the Far East, M-C McLane International has gone into the importing business.

Its first customer, Nash Finch Co., Minneapolis, told SN it is satisfied with the quality and price savings on its initial purchases - Christmas trees and porcelain dolls late last year, private-label tuna fish earlier this year - though it is continuing to keep its options open.

"As an industry, a lot of companies have gotten complacent about the quality of imports after working with the same importers for years and assuming the quality would always be the same," John Paul, senior director of marketing and sales for Nash Finch, told SN last week.

"What M-C McLane has done is bring quality back to the forefront," he said. "They were able to make sure we got the quality we wanted and even helped us raise the bar a bit. And there was definitely a savings in the cost of goods, so it's been advantageous for us to go that route."

Nash Finch is exploring options for working with M-C McLane on importing for other private-label categories, including olives, mushrooms, mandarin oranges and pickles, Paul said. On the nonfood side, most orders for this year have already been placed, but the company said it is exploring opportunities for 2007 in softgoods and holiday decor items, "and so far the pricing looks good," he said.

One potential import customer for M-C McLane is Bozzuto's, Cheshire, Conn., which told SN it is considering doing business with the importer "because we're always looking for ways to reduce our cost of goods," Steve Heggelke, senior vice president, merchandising, told SN.

He said Bozzuto's has purchased batteries and light bulbs through the importer, but it is looking at possible buys on Christmas merchandise for the 2007 holidays and also some private-label or controlled-label lines "if we can get them at a better cost," he said.

M-C McLane is a division of the McLane Group, Temple, Texas, headed by entrepreneur Drayton McLane.

According to Michael E. Julian, chief executive officer, M-C McLane had been strictly an exporter before it converted to importing "to help level the playing field for independent grocers, who need just-in-time delivery on imports rather than having to buy full containers.

"It became clear to me we could be a sales company making cold calls all the time or we could carve out a niche in the market with midsized companies where no one else was playing," Julian said. "It came down to an issue of trust - winning over their trust to give us the data on what they had paid previously and what they needed. Then it becomes a matter of getting the lowest price at the quality level they need and saving them money - while we make the same amount of money either way."

For many midsized wholesalers and retailers who engage in consortium buying in imports, the biggest issue is logistics, Julian said. "Once the products get to the U.S., how are they distributed? We are experts in the distribution business. We put a markup on the product and then resell it.

"Now we're trying to build partnerships where we act as their international sourcing agent. We buy what they need in full containers, palletize the loads and then ship them out."

As part of its conversion to importing, M-C McLane relocated its offices to Houston from Oakland, Calif.