CIES RALLIES THE NEXT GENERATION OF MANAGEMENT

RUSSELL REDMAN

PARIS -- To grasp changes shaping the food industry's future, CIES, The Food Business Forum here, is urging retail chief executive officers to look to the next generation of management.

The international trade group's Annual Executive Congress here next week, whose theme is "Creating a New Future for the Food Business," centers on how incumbent and upcoming executives can team up to identify change and map out a corresponding business strategy for the coming decades.

Etienne Laurent, president and chief executive of Paris-based CIES, and Richard Fedigan, CIES vice president of strategic management programs and marketing services, discussed the June 2 to 4 conference and global developments in food retailing in an interview with SN.

"The upcoming congress is a direct reflection of what we want to achieve in addressing the future," Laurent said. The kernel of the CIES mission, he noted, is encouraging retailers to anticipate change, identify future trends, and advance best practices and techniques. "We came up with this year's theme on the basis that the past vision the current CEOs had of the future was not good enough for what had actually arrived," Fedigan explained. "We're shifting our emphasis in the annual congress from what the CEOs say to what the next generation is saying about tomorrow."

Laurent and Fedigan pointed to electronic polling at CIES conferences in Madrid, Spain, and Vancouver, British Columbia, last year, which revealed striking differences in outlook between CEOs and young executives:

CEOs ranked trust, convenience and quality as the top reasons shoppers will choose supermarkets in 2005. Young executives said convenience, entertainment and one-stop shopping. CEOs ranked entertainment eighth.

"What the young executives are referring to is a new form of product presentation, selection and assortment that will actually be entertaining for the consumer. I definitely see a trend in that direction, not only in America but also in Europe," Laurent said.

Sixty-one percent of CEOs, compared with 73% of young executives, said less than half of today's food retailers will be around in 2005. Also, 40% of CEOs and 24% of young executives said discounters, multinationals or companies other than today's food retailers will own most of the food stores by 2005.

A total of 41% of CEOs and 45% of young executives said home delivery will be 20% or more of food retail volume by 2005; 73% of CEOs and 87% of young executives think that will be the case by 2010.

"In some senses, the next generation was much more optimistic; maybe they think they can do something about the challenges facing the business," Fedigan said. "In other senses, they see change happening a lot faster and a lot more constantly than the current CEOs."

The need for a forward-looking perspective has intensified as supermarkets begin to transform into meal outlets and shoppers increasingly weigh value more heavily than price, Laurent and Fedigan said.

"Retailers have become conscious that their organizations need more elaborate thinking in terms of management methods and also management style," Laurent said, adding, "The recognition of the role of leadership is actually coming through our young executives."

Also fueling the need for a fresh strategic vision are the proliferation of alternate food formats, a surge in technology use, the blurring of retail job functions, industry consolidation and a greater focus on the environment, Laurent and Fedigan said.

"The key for retailers in the future is getting the right people on board -- the people who know how to think outside the box so they can anticipate change," Fedigan said. "We will be looking more at people who come up with new, inventive formats that attack stomach share and mind share, meal replacement-type companies."

CIES is preparing for the future by offering more training and educational programs; diversifying its membership by including more supplier, restaurant and service firms, and building up a marketing research data base, according to Laurent and Fedigan. Fedigan said CIES is "working with a major technological solutions supplier" to develop a "worldwide electronic community in the food business," which would be used to bolster information gathering and member communication.

In addition, CIES is expanding geographically, notably to emerging markets in Southeast Asia. CIES opened a Singapore office last May and has since seen its Asian membership grow to about 25 companies, Laurent said.

"A number of European operators are moving increasingly to that part of the world as well as to [North] America and South America," he said. Rising membership in Hong Kong could help open the door to China, he added.

In Europe, strides are being made in Efficient Consumer Response, Laurent said. A poll taken in January at the ECR Europe conference in Geneva showed that ECR implementation was more advanced than expected. "That was a major revelation," he said. However, coordination of ECR on European and national levels has been difficult, he noted.