FLEMING STEPS UP ITS EXPORT THRUST

DAVID ORGEL

OKLAHOMA CITY -- Fleming Cos. here is shifting its export venture into high gear.

The giant U.S. wholesale-retail company could triple its export volume within the next two or three years and has targeted a wide range of countries for that growth. The level of success will rest on Fleming International, a recently formed unit, which also handles imports.

"Fleming International will continue to grow with full thrust," stressed Robert Stauth, the corporation's newly named chief executive officer, in an interview with SN Global. "It will continue to grow double-digit sales and earnings for many years to come." This international unit currently draws most of its volume from brand and private-label exports, dealing in everything from beef to paper goods. And 1994 is a big year for the Miami-based unit, according to J. Steven Moll, president of Fleming International.

"Recently we've been putting a lot of emphasis on setting up the infrastructure of the organization, but with the new year we'll be focusing on the sales and marketing side for our program," Moll said in an interview.

If all goes as planned, the export side will hit a very fast stride. "We're currently doing about $200 million to $225 million in exports, and we expect that to reach $500 million to $600 million within two or three years. "Central and South America and the Caribbean will be the fastest growing export markets for us. We find that Central and South America have really opened up and let our business in," he said.

Mexico is another strong country for the export business, he added.

Fleming's top future prospects south of the U.S. border include Argentina, Chile, Panama, Costa Rica, Honduras, Bolivia, Ecuador, Colombia and Venezuela. Fleming has also set its sights on Asia for strong growth. In particular it will build export programs for Taiwan, Hong Kong, Singapore, Malaysia, Korea and to some extent Japan. Fleming has geared a wide mix of items for its venture because no two countries will require the same assortment, Moll stressed. "For example, it's easier to sell paper goods in some countries and beef in others. It depends on what they already internally produce. We try to go across a full range of products."

The company is exporting both brand and private-label items. "We'll be enhancing the existing channels for brands, our labels and second- and third-tier vendors," Moll said. "We work with whichever national brands are able to work with us, but we don't represent every company everywhere," he continued.

Most of the exports will involve Fleming's private labels, including Hyde Park, Rainbow, Bonnie Hubbard, TV (True Value) and Marquee.

Fleming is hopeful the program will gain some fuel from cooperative efforts with lesser-known manufacturers. "Some second- and third-tier manufacturers don't have capabilities for international programs on their own, but there's still a big demand in Latin America and Asia for U.S.-produced goods, so we can work with them. In Latin America, it doesn't have to say Del Monte; it can say Hyde Park."

One unknown is how the newly enacted North American Free Trade Agreement will help Fleming's program. "We haven't yet determined how it will help," Moll said. "We're studying that right now, but we'd be in Mexico even if NAFTA didn't pass."

Moll had been president of Fleming's Miami division before the formation of the international operation last year. His recent marketing efforts for the new unit included a trip to Germany last October to exhibit at the giant ANUGA trade show, an international food forum.

Fleming's other international programs include a joint venture with Grupo Gigante of Mexico, which has been opening price-impact stores in that country. Fleming insists on having a local partner before attempting to launch retail stores abroad, stressed Stauth. "We insist we do it with a partner who already has a business in place and already understands the customs and the culture in that particular country," he said.

"Then we can bring either financial resources and-or technology to that existing base and we will let them determine how to grow the business because they are already on the inside of the infrastructure."