TRADE GROUPS REFLECT INDUSTRY CHANGES

David Merrefeild

Trade associations exist to provide various services to their industry members, so if an industry changes, it's axiomatic that trade associations must change too.

This is a fact of considerable interest to those who work at trade associations, but should also be of interest to all of us since the methods of adaptation are both a mirror held to the industry and an indication of the culmination of a suite of industry changes.

Here, in practical terms, is the challenge in front of trade associations at the moment: Since retailers and manufacturers are merging at a dizzying rate, associations are compelled to take action. Every merger of their members equals less revenue for associations and, for those with booth shows, one less exhibitor. Moreover, a contracting industry tends to make every business concern a direct competitor to all others.

So there's ample reason for change, and it's happening: Tom Zaucha, National Grocers Association president and chief executive officer, told SN last week that NGA's exhibit hall is being replaced with a group of pavilions intended to show marketing and operational concepts. The change will be effective at NGA's convention next February. The convention will also feature the chance for manufacturers and retailers to get together for one-on-one meetings. (See Page 1.) The personal-meeting format is used by the General Merchandise Distributors Council, which met earlier this month, and by Food Distributors International, which abandoned its booth-show format several years ago.

Why did NGA change? "As companies have consolidated and become more cost-conscious, they have indicated they are looking for a change," Tom told SN. "Most have been clear and direct in telling us that the money they spend on building, shipping and manning booths could be invested better in getting more interface activity."

And that's about as clear and direct an explanation of how industry leaders are thinking about this as is likely to be articulated.

There are further indications of this. At the weekend, much of the consumer-packaged-goods side of the industry gathered at the Greenbrier resort in White Sulphur Springs, W.Va., for the annual meeting of the Grocery Manufacturers of America. Although the resort seems frozen in time, GMA is not. C. Manly Molpus, GMA president and CEO, told SN in a preconvention interview that "there should be mergers among associations. We can make a compelling argument for more consolidation of trade associations." (See Page 14.) GMA practices what it preaches. Late last year, GMA and the Association of Sales and Marketing Companies merged. This is another way to cater to industry players' inclination to spend time and money wisely and efficiently.

Finally, what about the Food Marketing Institute, the association that is far and away the largest in the industry? FMI attracts vast numbers of attendees to its shows, and has a large offering of member services. But that hasn't prevented FMI from training an eye on the future and to contemplate what it must do to adapt. Ron Pearson, FMI chairman, told SN that FMI has commissioned a strategic-planning study that is being conducted by Deloitte Consulting. The idea is to study industry issues and help ensure that FMI's programs are atuned to helping members meet a changing future. Results are expected in the Fall. (SN May 7.)