GROUPS PREPARE ECR TO SERVE FOOD SERVICE

STEPHEN DOWDELL

The food-service industry is piecing together its own version of Efficient Consumer Response, hoping to build on the foundation laid by grocery -- and to kick in new knowledge that supermarkets may apply to their in-store food-service operations.

"We have already put together a consortium of industry leaders. We have a name and a logo. We've got a consultant on the case already, so we are moving ahead," said John Gray, executive director of the International Foodservice Distributors Association, Falls Church, Va.

IFDA is the sister association of the National-American Wholesale Grocers' Association and one of the primary backers of the fledgling project. Similar to ECR, the new initiative will be dubbed Efficient Foodservice Response, or EFR.

Its stated goal also has a familiar ring. According to Gray and other sources involved in its inception, EFR is intended to offer a comprehensive strategy to cut operating costs and increase efficiencies for the entire food-service distribution chain, from the manufacturing end to the consuming end.

The analogy between ECR and EFR will go even deeper. One of the first steps in forging the EFR initiative will be to pore through the volumes of data and case-study experience gathered by the grocery industry for the ECR movement, and to cull anything that would prove useful to distributors and other food-service industry players.

"There is a lot that would apply to both sides of the house," said Gray. He added that the food-service industry will seek to avoid the potholes encountered by grocery, such as controversy over the

likely role of wholesalers and the disposition of trade promotions in an ECR world.

Gray said three trade groups so far are spearheading EFR by providing leadership and the lion's share of funding: IFDA, the International Foodservice Manufacturers Association and the Uniform Code Council.

He said that additional participants include the International Foodservice Brokers Association, Grocery Manufacturers of America and the Produce Marketing Association. "Also, the National Restaurant Association has had a presence at every one of our meetings so far," he added.

Bob Rich Jr., president of Rich Products, Buffalo, N.Y., and chairman of the UCC, was prominent in getting it off the ground.

"It's a great start, anyway," Rich told SN. "Several important people had been lending their voices in different forms, looking for a way to get some of the elements of ECR working for the food-service business.

A consortium was drawn from their staffs and members, and it has met several times to plot out strategy. The consortium will meet again Aug. 11, Gray said.

"Importantly, we already have a full-time project manager for this, in the form of Bill Hale from the Hale Group," Gray said, referring to the president of the consultancy based in Danvers, Mass., that was hired on. "It will help tremendously to have one central manager to keep the thing moving. It avoids the problems with pecking order and politics that were a factor in the early stages of the ECR project."

EFR will move forward on two fronts, both of which are expected to bear fruit by next March. The UCC will head a review of "the large archive of grocery ECR research, data and reports," Gray explained. At the same time, the consortium will interview a handful of research firms and choose one to do original research into the state of the food-service industry.

"It would be a KSA-type document," Gray said, alluding to the seminal ECR study conducted for the grocery industry by Kurt Salmon Associates, "except that this time we will have the 'why' that brings the industry to this point in its development, as well as what the initiative will mean in terms of a real breakdown of costs and roles for the different parts of the supply chain."

Gray, who was involved in the development of ECR as an executive at GMA, before he moved to IFDA in July 1994, said many of the fundamental issues that pushed the grocery industry into ECR will drive the food-service project as well.

He said these include the need for trust and a level playing field between industry segments, problems with invoice deductions, deals becoming too complex, too many new items and high failure rates, scant electronic data interchange capability and almost no use of uniform codes to facilitate shipping.

Rich emphasized that "EFR will not be a rehash of ECR. There are important differences. At the same time, however, Gray said, "The opportunity for crossover to the supermarket food-service business is tremendous, and EFR will point to that."

Gray said he has already had discussions with Tim Hammonds, president of the Food Marketing Institute, Washington, about such prospects for crossover.

"There is the opportunity for partnering among food-service distributors and chains, even to the extent of distributors coming in and helping design and run the stores' food-service programs. "

FMI officials were not available for comment.