GOALS, CHALLENGES AND FUN

DAVID MERREFIELD

BUFFALO, N.Y. -- Robert E. Rich Jr. is in a hurry.

Bob Rich, president of Rich Products Corp. here, was installed as chairman of the Grocery Manufacturers of America during the organization's executive conference at the Greenbrier resort in West Virginia earlier this month. Rich succeeded Arnold G. Langbo, who retired as president and chief executive officer of Kellogg Co. and subsequently relinquished his post at the GMA.

Rich Products is one of the world's largest family-owned frozen-food makers.

Rich is a 15-year veteran of GMA board service, but in an interview with SN acknowledged that his elevation to the GMA chairmanship came as a surprise.

"At the time I went on the board, it would have been hard for me to believe I would have this great opportunity to head the GMA, which I'm extremely excited about," he declared. And, he's excited enough to have put together an agenda for his foreshortened term, an agenda that can be quickly achieved.

"I wanted to be a little careful to choose objectives that are very doable," he said.

And, as it happens, there's one issue that's welling up all over to which he can apply his energies immediately: The Y2K issue, namely the ability of the industry to bridge the upcoming date gap as the new millennium approaches.

"One of the glaring things confronting us is the Y2K question," he said. "There is immediacy to that. I, as steward for the GMA, have to make sure that we're doing everything possible between distributors and our own member community so we don't let our customers down."

Asked how well the industry is doing in quelling the Y2K problem, Rich asserted that "Our industry is in very good shape, but there have been growing consumer concerns regarding availability of product, which gives rise to the potential of hoarding. We're working together to address those concerns, but it's still the great unknown."

One solution to hoarding would be to load the distribution pipelines to ensure that consumer runs on products are met, but Rich said that's not the solution.

"I think those days [of trade loading] are over and we don't need it again," he said. "That's an industry practice that most of us have gotten away from, and we don't need a special event to go back to it. I don't see any desire to go back to those practices."

Indeed, one of Rich's themes is that trade relations are far better now than they were in the past. "I grew up in this industry and saw some very contentious times: when it became distributor against manufacturer. Those are times that I don't want to go through again, and I think we've made huge moves with a better understanding of what we must do for our ultimate customers, the consumers.

"It's such a massive change from 10 years ago when distributors and manufacturers got behind closed doors and tried to place blame for the problems we were all going through as an industry. This is such a more productive time, and an exciting time. It's fun to be part of it."

Rich said it's a happy coincidence that Daniel R. Wegman, president of Wegmans Food Markets, Rochester, N.Y., was appointed chairman of the Food Marketing Institute in May. "It's hard not to look at the parallel situation going on at FMI right now with Danny Wegman. Danny and I grew up together in this industry, and both now head our family businesses. And, he's just 60 miles away on the New York Thruway.

"I think there are a lot of parallels, but more than that Danny and I are now positioned to help make sure trading partners are coordinating their activities. Historically, some of the best things this industry has done for our customers have been done jointly, and I would point to the development of the bar code and scanning as a prime example of that. "Hopefully, we'll be able to turn [our appointments] to our advantage and really move the dialogue along further than it has been before, and work closer together. We've been friends, as well as trading partners, for quite a while," he said.

Rich said that both he and Wegman also share an interest in the importance of achieving and promoting food safety throughout the distribution chain.

"I share, with Danny, a consuming interest in food safety," Rich said. "I think that as we look at the whole offering that we make to customers, safety must be the starting point, followed quickly by value and variety.

"For me, trust in food safety is what everything we do hangs on. When we look at a lot of the issues of trust in the industry, in government and as it concerns consumers, it's not where it should be. We haven't done as much as we should have done to sell the proposition that the food supply is extremely safe; that there's tremendous value here and variety that's greater than ever before in the history of the world.

"But we need to tell that story, because trust is going to be put to the test as we move to biotechnology. There's no question that biotechnology is the next step, and that it offers great opportunities at all levels of trade, from consumer to the farmer. But we have to continue to build that notion of trust so we are able to bring biotechnology to an understanding public, and to everyone's advantage."

Another change-driver Rich sees in the future is the phenomenon of retail consolidation now buffeting the industry.

"Those of us who have lived and prospered in the food-service industry -- which also has seen tremendous consolidation -- understand that [manufacturers] have to deal with, and be successful with, not just the larger players, but also with what we call our street business too.

"Ultimately, from retailers' point of view, a lot won't change: They still will have to be successful at the point of purchase; they still will have to retain customers, and find new ones; they still will have to find their own niches. We as manufacturers have those same challenges. I don't look on consolidation as frightening. It's a fact of life."

Asked if there could be an upside for vendors in retail consolidation, Rich said that "There will be fewer purchase points, but when you add the alternative distribution systems and supply chains that are developing, I think there are many more selling opportunities. Consolidation represents a little change in how we do business, but it will help us broaden our perspective as well."

Finally, Rich said, his elevation to the chairmanship of the GMA offers him a platform from which he can promote the viability of smaller, family-owned manufacturing businesses.

Even though Rich Products is a $1.4 billion business, he said, it pales by comparison with the giant consumer packaged-goods companies from which GMA chairmen are typically drawn.

"I think my election as GMA chairman is a bit of a departure; the chairmen usually come from the large, more readily recognized branded-goods companies. I will represent a lot of the smaller companies in GMA, along with the suppliers to retailers' perimeter departments -- the in-store bakeries and delis -- who may have not gotten the attention the large center-of-the-store people have. I'll challenge GMA to provide food service a seat at the table."

Moreover, he said, the small-business agenda can be advanced in conjunction with Wegman's chairmanship of the FMI: "The fact that Danny and I are in our respective roles puts out the 'time-out' sign and says, 'Listen folks, family businesses are still the backbone of this country and literally every company that registered with the GMA started as a family business.'

"But that doesn't mean you have to start as a family business and go somewhere else. We're satisfied with the equity form that our businesses take. It's a good reminder that there's still a lot of family businesses, and that a lot of them will survive and prosper."

On the other end of the spectrum, he said, business is also going global, a fact that the GMA must continue to recognize.

"We've been swept into a global market, and we've been considering what GMA's role should be in international markets. We've increased our international presence because a lot of the technology issues are international issues." Asked if the "America" in the GMA's name would be fitting if a larger international role were to be assumed, Rich acknowledged that such questions have surfaced.

"You should look at your name every day of the week. It's one of the things we've questioned. GMA is a wonderful brand that represents a lot of great brands. But we have to continually question what we're doing, and for whose benefit," he concluded.