FLEMING MARKETING FOOD-SERVICE DISTRIBUTION

MINA WILLIAMS

OKLAHOMA CITY (FNS) -- Fleming Cos. is one traditional supermarket wholesaler that does not intend to cede the fresh meals business to food-service distributors.

The company is marketing its own brand of food-service distribution, which it says is tailored to the supermarket industry and particularly to grocers who lack the knowledge of products and systems required to make a fresh meals program work.

However, this proactive stance as a provider of food-service distribution expertise represents a turnaround of sorts for Fleming, which at one point had turned its back on the business. Several years ago, it had left its retail customers high and dry when it came to food-service items, prompting retailers to turn to other sources such as food-service distributors.

"We had made a shift off of food-service distribution," said Phil Gass, group vice president, bakery/deli operations for Fleming, based here. "Now, we are offering products that our members want. It may take two to three years, but we stand to gain $50 to $60 million."

Gass said the wholesaler awakened to the fact that its retail customers needed meals solutions whether or not Fleming was going to be the one to provide them.

It set about fashioning a new food-service distribution system coupled with an educational program for its retailers to tap into. This system, Gass said, will be the bulwark protecting Fleming from the incursions of food-service distributors eyeing supermarkets as a new opportunity.

"We made a strategic decision to upscale our product supply centers to fit today's shopping environment," Gass said. "We wanted to regain lost business, which prior to the upgrade had been served by the food-service distribution network."

Fleming's food-service program, he said, is better suited to the industry it has served for so long. "We can offer a better value than the food-service competition," Gass said, pointing to the wholesaler's long-established network for grocery distribution and its years of experience going to stores.

Fleming now offers its retailers a package of food-service items ranging from 70 to 600 stockkeeping units, depending upon the needs of each retailer.

Gass predicted that by the end of the third quarter of this year, the wholesaler will have built up a comprehensive offering in each of the marketplaces in which it does business, through all 34 of its distribution centers.

"There is a certain mindset in servicing retailers in a comprehensive fashion," said Gass. "First, we realize that we cannot be all things to all people, yet we have to be a viable source of products and services to ensure our member's growth in the future."

To focus on the future, Fleming developed a food-service "university" to train its own representatives and retailers in the intricacies of food-service operations.

The three-day course regimen includes how to develop a business plan and how to make the transition from a perishables operation to a full-fledged food-service operation. To date, the program, run at Fleming's corporate headquarters, has graduated four classes of 50 retailers and 50 Fleming associates. Next, the wholesaler intends to take the "university" course of education on the road.

"Food-service skill levels are dramatically lacking on the grocery side of the business," Gass said. "Product handling, food preparation and safety information needs to be brought to the retailer."

This renewed dedication to food-service distribution comes on the heels of the creation and roll out of Fleming's modular in-store food-service merchandising program, called Chef's Cupboard. The program includes licensed departments with specific themes, such as Italian and chicken, which are offered as modular, turnkey operations.

At present, 160 of these concepts are in operation at retailers supplied by Fleming. By the end of the year, Gass said, the wholesaler expects more than 220 to be up and running.

"We are developing food-service concepts with proven capabilities so that our members can get into food service in a fashion which is financially stable and in keeping with the marketplace," he said.

Still, like many retailers, Fleming continues to struggle with the task of fleshing out its meals programs with the right food.

"We're just not seeing product," he said. "Basically, manufacturers operate with two silos, with grocery and food-service operations as two parallel companies using separate broker networks. As a result, the support function is not going to be there, along with the expertise and skills of the food-service side. Manufacturers need to take advantage of all their strengths."