GMA TO VENDORS: INVEST IN BRANDS, TACTICS

JOHN KAROLEFSKI

WHITE SULPHUR SPRINGS, W.Va. -- New reports from the Grocery Manufacturers of America assert that food and beverage manufacturers can improve profits and distance themselves from competitors by investing in both their brands and in their sales and distribution tactics.

The information, released at the GMA's 90th annual Executive Conference here, was contained in three reports: Financial Performance of the Grocery Manufacturing Industry; Solution Selling II: Delivering the New Shopping Experience; and Growth Quest: New Product Success.

The financial performance report included food, beverage and household product manufacturing. Swander Pace & Co., a San Francisco-based consultancy, prepared the report for the GMA, Washington, whose members account for U.S. sales of more than $430 billion.

"The grocery-manufacturing industry has experienced a decline in sales growth since 1996, while operating profit growth, return on sales, and return on assets increased for all performance groups," the reported stated.

"Although manufacturers found it difficult to generate increased top-line growth, they found ways to improve the bottom line. Top performers are driving improvements by investing both in their brands, and in the capabilities -- such as streamlined supply chains and cohesive, coordinated go-to-market strategies.

"The leaders are seeking out and exploring new avenues of growth, including channels, products and regions," according to the report.

One of the ways that leading grocery manufacturers succeed is through brands, which the report called "the most significant source of competitive advantage, generating superior profit growth and returns."

Solution Selling II, prepared with Chicago-based Andersen Consulting, presents 11 studies from manufacturers, retailers and a broker. The report -- in effect, a how-to guide -- describes solution selling as a four-step process: using consumer data, in-store execution, measurement and program development. The bottom line for trading partners: selling more products to satisfy consumer needs for simple meal solutions.

The retailers listed in the case studies were Ukrop's Super Markets, Richmond, Va., and Hy-Vee, West Des Moines, Iowa. The manufacturers were Nabisco/Lifesavers Co., Pillsbury Co., Tyson Foods, Gillette Co., Hallmark Cards, Warner-Lambert Co. and Kraft Foods.

At the GMA conference, solution selling in the form of a No Oven Summer Backyard BBQ was presented by Ronald Pearson, chairman, president and chief executive officer of Hy-Vee, and Mary Kay Haben, executive vice president of Kraft.

Growth Quest: New Product Success, a report presented at one of the educational sessions here, is a summary of the output of a two-day brain-storming session held in Chicago in May. This "work in progress" is scheduled to be completed in the summer months.