executive update

2nd Quarter 2015
Executive Update
IN THIS ISSUE:
◗ Mac Pearce Honored
Posthumously by IFDA for
Industry Leadership
GPOs Remain Largely a “Beyond Restaurant” Phenomena
by Mark Allen, President & CEO
◗ Capitol Brief: Ambush Union
Rules Now in Place
Operator Group Purchasing Organizations (GPOs) continue to have an
impact on nearly all foodservice distributors. To provide ongoing clarity and
◗ Syndee Stiles of McLane
Foodservice on Food Safety, GS1
Standards, and the Role of
Operations Support
understanding on an issue that is inherently complex, IFDA, in partnership
with Technomic, is releasing a members-only study on GPOs. The study
contains an assessment of the current GPO landscape and includes
◗ IFDA Members Come to
Washington
significant insights as a result of extensive surveys and discussion with
◗ New Survey Illustrates Value of
Extended Product Data
leading operators, distributors, manufacturers, and with GPOs themselves.
◗ McCain Foods USA Named IFDA
Partner of the Year
and is growing at a 4 percent annual rate. Certain segments continue to be
In terms of operator purchases, the GPO market today totals $31.5 billion
highly penetrated by GPOs (hospitals, nursing homes, colleges, etc.), while
◗ A Discussion Around Price,
Transparency, and Making the
Customer the Hero of the Story
lodging and education enjoy relatively high growth rates in GPO purchases. Commercial restaurants
◗ Case Studies in Miles Reduction
Shared by Eby-Brown
and Merchants Foodservice
market penetration across all operator segments is currently at 21 percent.
◗ How CRM, Mobile Apps, and
Content Can Drive Sales
continue to be a segment of low penetration by GPOs, although it is growing at a slow rate. Total GPO
One of the studies more interesting findings is that “perceived” cost savings remain the driving
factor for GPO usage among operators with total savings estimated to be close to 20 percent versus
buying on their own. Despite the perceived cost savings, there is noticeable erosion in satisfaction
◗ 2015 IFDA Partners Executive
Forum Highlights
with an operator’s primary GPO, with only 68 percent of operators giving their GPO high marks. This
◗ Six New Members Join IFDA in
1st Quarter 2015
have increased their focus on transparency and additional value creation.
◗ IFDA Korea Hosts Meetings with
Dot Foods in Seoul
continues to be a challenge, they generally appear to be managing the situation better by, for example,
comes at a time when foodservice distributors and other sourcing alternatives such as cash & carry
Manufacturers increasingly find GPOs to be “strategic” partners, and although margin compression
developing better processes to handle key issues such as double dipping and price extendibility. Many
manufacturers still feel that GPOs provide them with a means to drive incremental volume in difficultto-reach customer segments.
The study reveals that small GPOs that target independent operators with local deals are not
gaining any additional traction. Manufacturers continue to evaluate local GPOs more intently to ensure
that they mesh with their goals as well as the goals of their distributor partners.
IFDA is the leading trade
association representing
foodservice distributors
throughout the U.S., Canada,
and internationally. IFDA’s
members include broadline,
systems and specialty
foodservice distributors that
supply food and related products
to restaurants, institutions, and
other foodservice operations.
As GPOs mature, distributors generally feel more comfortable incorporating them into their
business. The reality is that leading GPOs are now part of a go-to-market strategy for many
distributors. Distributors have leverage in the relationship, though, as their support is key to overall
GPO success. Distributor shipment data is a critical component of any GPO program as it serves as a
measure of performance for all parties. Additionally, member order guides, price deviation
management, and proprietary warehouse slots provide important support for GPOs. For distributors
working with GPOs, they should recognize they play an important role in the success of GPOs and plan
accordingly.
IFDA’s mission is to help our members succeed and we do that in part by providing insights to help
distributors make informed decisions that, in turn, allow them to run an exceptional business. If GPOs
are of interest to you, I believe you will gain new perspective from this members-only research.
For membership information,
contact Heidi Weiss at
(703) 532-9400 or by email at
hweiss@ifdaonline.org.
Complimentary copies of the new study will be sent to IFDA member key executives including head of
firm and senior sales and marketing contacts. If you have any questions, please don’t hesitate to
contact me. Also, once you have received the study and have had time to digest the findings, I’d be
interested to hear your thoughts.
2nd Quarter 2015
Mac Pearce Honored Posthumously by IFDA for Industry Leadership
William McFall Pearce, known as “Mac” by friends and
colleagues throughout the industry, was posthumously
honored on January 25 during the presentation of the
2015 IFDA Cornerstone Award. Mr. Pearce was president
of Performance Foodservice at the time of his death in
September 2014. His wife Sidney, daughter Sara Ellis, and
son McFall, as well as other family members, attended the
presentation held at the IFDA Partners Executive Forum.
“Mac was a great friend to our industry, a valued
member of the IFDA Board of Directors, and we want to
pay tribute to his memory and recognize his many
contributions,” said IFDA Chairman Tom Zatina, in opening
remarks at the banquet.
“The IFDA Cornerstone Award was established more
than a decade ago to recognize truly exceptional industry
leaders — and Mac was surely of that rank,” said Mark
Allen, IFDA’s president and CEO, who presented the
award. “Mac was an exceptional leader in his community
and in his role as president of Performance Foodservice,
and was held in very high esteem by members of the
IFDA Board of Directors. For me personally — Mac was
always incredibly helpful and generous with his counsel
and time.”
Recollections of a number of colleagues were shared
during the presentation. George Holm, CEO of
Performance Food Group, was responsible for bringing
Mr. Pearce into his role at the company, and described
him as an extraordinary man who was as comfortable in
the boardroom as he was with guys with whom he shared
time riding motorcycles. He was a leader within the
executive team, but was also able to easily connect with
the rank and file at the distribution center.
Within his community, Mr. Pearce served on the Board
of Directors of the Urban League of the Upstate, The Bon
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Secours Health System, the University of South Carolina
School of Hotel, Restaurant and Tourism Management,
and the Board of the Harvest Hope Food Bank in
Greenville, SC.
Denise Holland, the food bank’s CEO, described Mr.
Pearce as a caring friend to the people he knew, but also
as a person with a deep commitment to the fight against
hunger. That commitment touched the lives of many he
didn’t know. Holland said that these were seeds planted
by his family, who have supported Harvest Hope for many
years.
Among his many contributions, Holland said that Mr.
Pearce brought his lifelong food industry skills to the food
bank. “Mac was a pillar of leadership sharing best
practices with Harvest Hope to help meet our distribution
demands,” Holland said. “He saw to it that Harvest Hope
had needed equipment such as fork lifts, pallet jacks, and
floor scrubbers, in addition to a greatly wished for tractor
trailer and another smaller truck. He was also there with
gifts of much needed food and funds.”
In discussing Mr. Pearce’s valuable contributions
through IFDA, Allen remembered him as a strong
advocate for the foodservice distribution industry and for
his company when he came to Washington, DC.
“Mac enjoyed keeping abreast of what was happening
in Washington and the politics of it,” said Allen. “He was
on top of any legislation or regulations that could have an
impact on the business … and took the time to develop
relationships with his lawmakers. That can feel like an
uphill battle at times, but Mac was always there on the
front line making sure the concerns of his company were
being heard.”
In discussing Pearce’s leadership, Allen shared a
memory of the IFDA Board working on a challenging
industry issue over a number of months. “Mac provided a
steady, guiding hand as we worked to formulate our
position and plan of action. In a gentle but firm manner,
Mac was a leader in driving the association to consensus
and did it in a very unassuming way,” said Allen. “He
brought a lot of common sense and historical perspective
to those discussions and we were better off as a result of
his leadership on that issue.”
In concluding, Allen said: “Anyone who knew Mac
understood that he was a true gentleman. I speak for
many when I say we were thankful to have known him,
and thankful that his family and so many of his business
colleagues and friends could be here to honor him. Mac is
missed.”
IFDA EXECUTIVE UPDATE
Capitol Brief: Ambush Union Rules Now in Place
By Jon Eisen
More than 80 senior executives from IFDA member
companies attended the IFDA Washington Insight
Conference in mid-April, where they examined key federal
government policies that impact distributors. That
included the Congressional struggle with the highway bill
and transportation policy, as well as a labor policy already
in place for which distributors need to prepare. The
National Labor Relations Board’s (NLRB) ambush election
rule took effect on April 14, bringing with it an almost
complete revision of the procedures for a union election
campaign. With the dramatically shortened time frame,
companies will need to have plans in place in advance so
they are prepared for a potential union campaign.
At the macro level, unions have not received very much
from the Obama Administration. While the Employee Free
Choice Act was their key political goal at the beginning of
his term when there were 60 Democratic votes in the
Senate, the President chose to put healthcare reform front
and center. While unions supported Obamacare, even
there they found themselves in the crosshairs as the socalled Cadillac tax on generous healthplans could impact
union plans when it comes into effect in 2018. In the end,
the heavy political lift required to pass Obamacare,
combined with Scott Brown’s victory in Massachusetts,
meant that when the time came for unions to push for
EFCA, the window was closed. Even today the
Administration continues to disregard labor’s concerns as
the President works to push his Trans-Pacific Partnership
trade deal, which unions strongly oppose.
The NLRB has been the one place where the
Administration has given organized labor carte blanche
and they were even willing to violate the Constitution to
put union supporters in place. Though the Supreme Court
struck down President Obama’s recess appointments, the
President — with the elimination of the filibuster by then
Senate Majority Leader Harry Reid — was eventually able
to get a fully confirmed Board in place. The result has
been a coordinated effort to rewrite the entire organizing
process to make it much easier for unions to prevail.
The ambush election rule is the crown jewel of the
process. It places speed of the election before all other
requirements. Employers now can be notified of a petition
electronically and within two days must post the NLRB
notice. If a hearing is requested, it must be held within
eight days and employers are required to file a statement
at that time on all issues such as the proper bargaining
unit, who should be
considered a supervisor, and
any details around the
election. Any issue not raised
in this statement cannot be
brought up at any later time.
Two days after the hearing,
the employer must provide
unions with the employee list
including cell phone numbers
and email addresses. The rule
then eliminates the previous
requirement for a 25 day
Jon Eisen briefed attendees on
waiting period after the
the Ambush Election Rules at the
hearing, meaning the vote
2015 IFDA Washington Insight
can take place in as little as 14
Conference.
days. Under this lightning fast
scenario, employers will have little time to help their
employees understand the reality of what a union would
mean for them, a handicap that is made even more acute
by the fact that an organizing campaign places no limits
on what a union can say and can take place for an
extended period of time before a petition is filed.
The NLRB pro-union tilt is made even clearer when the
new rules of the Specialty Healthcare case are included. In
that case, the Board overturned years of precedent and
allowed for the formation of very small organizing units.
The first cases under these new rules have been in retail,
where Macy's perfume salespeople were recognized as a
unit. Previously all the salespeople in the store were
considered the unit. Distributors certainly have their own
smaller work groups that could be vulnerable to this type
of organizing.
As a result, we now have an environment where a
much smaller unit can be organized in a matter of weeks
and, all of a sudden, a company is faced with a union at
their facility. Companies that wish to remain union free
will need to increase vigilance and preparation so they are
ready if they are faced with a petition. IFDA is working on
resources to help companies be better prepared for this
possibility. While there are some cases around this new
process still pending in courts, many of these decisions
have already been upheld, and for the time being,
ambush is the law of the land.
Staff Contact: Jon Eisen
3
2nd Quarter 2015
Syndee Stiles of McLane Foodservice on Food Safety,
GS1 Standards, and the Role of Operations Support
This article is the first in a series of IFDA interviews with
women in leadership roles in foodservice distribution. This
interview was conducted by Caroline Perkins of The
Foodservice Content Company.
We recently talked with Syndee Stiles, vice president of
operations support at McLane Foodservice, and who also
serves as a member of the company’s executive
leadership team. Her background includes degrees in
mechanical and industrial engineering from Texas A&M
University and an MBA in finance from the University of
Texas at Dallas. In this interview, she discussed her role at
McLane, the regulatory environment surrounding food
safety, the GS1 US Standards Initiative, and more.
Q: What is the role you play at McLane Foodservice and
what are your responsibilities as a member of the
executive leadership team?
Stiles: I have a great role at McLane, but it’s always
difficult for me to explain. My team manages initial
orders, so that the customer service teams can focus on
assisting customers and resolving issues. I also manage
the Operations Support team. They determine
requirements and create layouts for our distribution
centers. They recommend equipment for material
handling and fleet. They work closely with our operations
to develop best practices and look for opportunities to
improve performance and/or reduce costs. My team is
also involved in food safety, in disaster recovery, and in
the selection and support of the systems that our
distribution centers use to manage warehouse and
transportation operations.
In my opinion, it’s the most interesting job you can have.
Q: Who is on your team? Is it organized by function or does
the group address multiple issues?
Stiles: There is a lot of cross training on my team. I have
an order collection department that takes all of the
customer orders and then I have operations support. That
group is loosely divided into transportation, facilities,
engineered labor standards, food safety, and general
support. But the lines get blurred because I have very
experienced and dedicated people who work wherever
they’re needed.
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Q: How did you come into foodservice distribution? What
were you doing before and how long have you been at
McLane?
Stiles: I started my career at Frito-Lay, a division of
PepsiCo. In the early 1990s, PepsiCo also owned
restaurants and decided to create a single captive
distribution company to serve them. The management
team was largely pulled from other PepsiCo divisions. As
an industrial engineer, I had previously worked with one
of the new executives and was recruited to join the new
foodservice distribution division. That distribution
company was eventually acquired by McLane. It was
really a fortunate connection that led me to foodservice
distribution.
Q: What drew you to the practice of mechanical and
industrial engineering?
Stiles: My dad was an engineer by trade and I can
remember being a little kid and lying on the floor in front
of the TV with blueprints. Checking dimensions and
circling them in red when they were wrong. Those were
my coloring books. I grew up around that kind of thing –
my dad would take us to work, show us what he did, I
loved math, I loved physics, and it never occurred to me
that it was an unusual career for a woman. That just never
entered my mind.
Q: You’re a part of IFDA’s Food Safety Committee, which
over the past few years has been tasked with providing
comments to the FDA on rulemakings for the Food Safety
Modernization Act. Can you talk about some of the work
the committee does on behalf of the industry?
Stiles: The food safety committee has been very active as
the FDA develops the rules to implement the Food Safety
Modernization Act. That legislation has the potential to
really change our industry, in the way we handle product,
the way we store it, the way we ship it, and the way we
track it — virtually everything that’s done through the
supply chain. This is a great committee; it’s got some
pretty amazing people on it. I understand operations and I
understand basic food safety but I do not have the level of
technical expertise of some of these people. It’s really a
good mix.
IFDA EXECUTIVE UPDATE
During a discussion on progress of GS1
Foodservice Standards, Syndee Stiles (center
in blue) made a point about the challenge of
getting to 100 percent accuracy on voluntary
GS1-128 barcodes on cases. The discussion
took place May 28, 2015 at the IFDA Food
Safety Leadership Committee Meeting, of
which Stiles is a member. With final rules to
implement parts of the Food Safety
Modernization Act set to be released in late
summer, the committee began examining
potential implications for distributors.
Our primary role is to make sure the regulators
understand foodservice distribution and our place in that
supply chain. So, we review proposed regulations to
understand how they could impact our members. We
discuss whether and how the underlying food safety
concerns are already being addressed within the industry.
Then we create comments and other communication for
IFDA to help the government entities understand existing
controls that are already in place and how the
requirements that they’re crafting can be modified to meet
their desired objectives without placing an excessive
burden on the industry.
We meet or talk whenever one of the proposed rules is
issued and then through every subsequent revision of
those rules. One of the big ones concerns traceability.
Some of our distributor members actually participated in
the FDA’s pilot, so they could demonstrate the level of
control that already exists — and how we can effectively
track the product.
The regulators don’t really understand our part of the
industry. We’re primarily handling closed cases — we’re
concerned more with maintaining the cold chain,
maintaining product integrity and product security. The
Food Safety committee works to help improve that
understanding.
Q: What food safety areas has McLane been mostly
focused on?
Stiles: We service restaurant chains. Our customers are
interested in ensuring the integrity and safety of the
supply chain so they can protect their customers, their
brands, and their reputations. To support that effort we
must continuously ensure product integrity, product
security, and preserve the cold chain. Over the last several
years, we’ve also invested heavily in technology and
we’ve worked very closely with our customers to improve
case labeling, especially GS1-128 bar codes because they
enable us to efficiently capture and track information that’s
critical for traceability such as vendor lot numbers and
vendor dates. That’s been a big focus for us.
Q: You mentioned GS1-128 barcodes. How has McLane
Foodservice been involved in shaping those foodservice
standards? Have you been involved in the GS1 US
Standards Initiative since the beginning?
Stiles: Yes, we were at the initial meetings. We were one
of the original founding members. The initiative is so
important because it’s the basis of establishing a single
set of standards for the foodservice industry — one that is
also in sync with related industries like retail grocery
because we share many of the same suppliers.
Q: I know there are many advantages on the sales side for
product data and images, but from your perspective, what
are two important outcomes of standards
implementation?
Stiles: There’s the global data synchronization network —
the GDSN. The core idea is that there should be one
source of information. Historically, when you set up an
item, you have information passed on from a supplier to a
buying group and possibly other entities before it gets to
continued “Syndee Stiles” on page 20
5
2nd Quarter 2015
IFDA Members Come to Washington
TOP: On his way to the Senate floor, first term Sen.Tom Cotton (R-AR) meets with a group of IFDA members including
representatives from Ben. E. Keith Foods, Performance Foodservice, and Sysco Corporation. IFDA’s Mark Allen also attended.
ABOVE LEFT: Economist Anirban Basu gave an economic forecast titled “The Pit and the Pendulum” that addressed the larger
economy, the food economy, and more. ABOVE RIGHT: Harry Johnson, III, a Republican board member of the National Labor
Relations Board, discussed recent actions of the Democratically controlled board.
Steve Stoner (left) of Maines Paper & Food
Service meets with Rep. Richard Hanna
(R-NY) and a congressional staff member
during a Capitol Hill visit on April 22. These
meetings help lawmakers understand the
issues facing distributors, their role in the
foodservice industry, and in their local
economy.
6
IFDA EXECUTIVE UPDATE
AT RIGHT: Senator Cory Gardner (R-CO) spoke to IFDA members about his goal of getting government out of the way of
businesses and discussed Senate priorities including the REINS Act (Regulations From the Executive in Need of Scrutiny Act of
2013), allowing legislators to vote up or down on new regulations in looking at cost vs. benefit. AT LEFT: Paul Saval of Saval
Foodservice asked Sen. Gardner a question following his comments.
ABOVE RIGHT: On the way to the Senate floor, Freshman Senator
Joni Ernst (left) met with Jennifer Meinders of Martin Brothers
Distributing Co. and William Reyes of Reyes Holdings.
ABOVE LEFT: (L-R) Craig Hoskins of Performance Food Group and
Tom Kurz of Sysco Corporation meet with a staff member of Rep.
Andy Harris (R-MD) during a Capitol Hill meeting.
LEFT: The first class of the new IFDA Executive Development
Program participated in the Washington Insight Conference, and
on the following day made presentations on a two-month group
project to identify a solution to a supply chain issue.
7
2nd Quarter 2015
New Survey Illustrates Value of Extended Product Data
By Chris Caldwell
The foodservice industry has changed dramatically over
the past decade and consumer demand for health foods,
allergen-free, vegan and/or vegetarian menu options, and
other filters continues to grow. In response, foodservice
operators are working to meet these trends with new dishes,
different ingredients, and more information. Now more than
ever, operators need product information as do the
distributors who supply them.
A survey based on product data sheets was conducted
with distributors and operators in 2014, and was
spearheaded by an industry workgroup within the GS1 US
Foodservice Initiative. The survey instrument was designed
to quantify and illustrate the value of extended data, and
provide insights on sales support needs that arise when you
provide incomplete product information versus complete
product information. A white paper released in June 2015 by
GS1 US shares survey results including the sample data
sheets that guided reactions.
“The goal was to show the industry the importance of
providing this extended data to the trading partners,” said
David Leppert, director of field support, PepsiCo
Foodservice, and co-chair of the GS1 US Foodservice
marketing workgroup that led the survey work. Jason Gunn,
manager, product information management team at US
Foods, serves as the other co-chair of the workgroup.
Sales sheets were populated for two fictional products:
One a value-added butterfly shrimp filled with Monterey
Jack cheese and coated with a seasoned breading; the
second a commodity product of canned tomato sauce.
For each product, participants were first given a product
data sheet with only transactional data and asked how often
they would need to request a sales call and how often they
would need to request a sample. This data set is referred to
as “incomplete information” in the white paper.
Participants were then given a product data sheet with
extended data (including nutritional and allergen data,
product images, handling, prep and cooking suggestions,
etc.), then asked how often they would need to request a
sales call and how often they would need to request a
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sample. This data set is referred to as “complete information”
in the white paper.
Some key findings of the survey results include:
• With incomplete information, more than 70 percent of
operators are “very likely” to request manufacturer support.
• There is very limited chance of an unassisted operator sale
for value-added products with incomplete information.
• With complete information, the number of operators who
are “very likely” to request a sales call is reduced by more
than 40 percent.
• With complete information, the number of distributors who
are “very likely” to request a sales call is reduced by 46
percent for value-added products and 38 percent for
commodity products.
As mentioned, the survey included responses from
distributors and operators. The distributor contingent included
741 participants, and of that number, 83 percent of
respondents were DSRs, 15 percent Sales Managers, and the
remaining 2 percent came from purchasing and general
manager titles.
When asked if there was a takeaway that really struck him,
Leppert said it was how much this information assists the
DSR. “The sheer value it drove from a DSR perspective just
jumped right out,” said Leppert. “You see a swing from not
having complete information and that creating a need to ask
for a sample or make contact for more information, to having
complete information and being able to move forward to the
sale.”
From a manufacturer perspective, Leppert believes this
drives significant improvement in productivity. Having
immediate access to this level of information allows the
operator or sales representative to eliminate items that are
not a viable solution for what is trying to be resolved. “It
provides the ability to quickly figure out, OK, these are the two
items that are going to fit my needs,” said Leppert.
To access the white paper, select “The Value of Extended
Product Information” on the GS1 US Foodservice “Case
Studies and White Papers” web page.
IFDA EXECUTIVE UPDATE
McCain Foods USA Named IFDA Partner of the Year
McCain Foods USA was named the 2015 IFDA Partner of
the Year after receiving the highest cumulative score in an
annual survey of IFDA distributor members. The survey asks
distributors to rate manufacturer efforts on collaboration,
product innovation, and other issues. IFDA Partners are
graded toward the end of each calendar year and the top
rated company is recognized at the annual IFDA Partners
Executive Forum.
In brief, the five criteria look to measure whether a
manufacturer engages as a strategic partner with distributor
customers, has a progressive approach to the supply chain,
has a strong commitment to local sales and marketing
support, has a clear focus on product innovation, and
consistently works to address issues critical to the success
of the distribution industry.
Jude Renzi, vice president of sales and marketing at
Renzi Foodservice of Watertown, NY, presented the award
on behalf of IFDA members. His company rated McCain
Foods a 10 out of 10 in four of the five criteria. Renzi said
that from his perspective as an independent distributor,
McCain Foods had a number of strengths that he would like
to see emulated by more manufacturers.
“As a customer, we see McCain’s communication with us
as exceptional,” said Renzi. “When we meet, they ask a lot
of questions and work to structure their sales plan
according to our goals as a distributor. It’s not a one-way
agenda. They’ve done a good job listening to our needs and
talking about how they will support our goals throughout
the year. They’re very interested in how they fit into our
business and in developing collaborative strategies for
growth.”
From a marketing and innovation perspective, Renzi said
McCain was at the head of the class — from marketing pull
through and strategy, to innovation and new product
development. “Their sales strategy has always been cutting
edge, and when they get in front of our sales force, they’re
very good at what they do. Their marketing, their
innovation, their enthusiasm to drive volume from the point
of sale, to any marketing materials — has been superior.
That doesn’t end with our sales efforts. They also do a lot of
things that are exciting to bring to the operator, and the
operator is excited to have it,” said Renzi.
“To know that we have earned the respect of the
distributor community means a great deal to all of us at
McCain Foods,” said company president Frank Finn in
receiving the award on behalf of the company. “Not only
Frank Finn, president of McCain Foods USA, accepted the
2015 IFDA Partner of the Year Award on behalf of the company.
The award, presented at the IFDA Partners Executive Forum, is
based on a survey completed by IFDA members and was
presented by Jude Renzi of Renzi Foodservice.
does being named IFDA Partner of the Year validate what
we do, it validates the things we do collaboratively as an
industry.” Ultimately, Finn said, those efforts are about
helping the operator be successful.
In the overall survey results, IFDA members ranked
McCain number 1 for their commitment to strong local
sales and marketing support, including taking the time to
establish strong relationships with distributor sales
management, engaging in joint sales planning and
collaboration, openly sharing consumer and category
information, and developing innovative growth oriented
marketing plans.
McCain also ranked high for engaging as a strategic
partner – taking the time to understand the distributor’s
business and protecting proprietary information that is
shared. IFDA members also rated McCain Foods highly for
their efforts to address issues such as challenges
surrounding third-party price extendibility and
understanding the benefits that distributors provide in the
marketplace.
“While there is always work to do in every relationship
— always things we can find to improve — we see McCain
Foods as a manufacturer that has developed a winning
combination in the foodservice channel,” said Renzi. “They
create a partnership that is a win for the operator, a win for
the distributor, and a win for McCain.”
Staff Contact: Mark Allen
9
2nd Quarter 2015
A Discussion Around Price, Transparency, and Making
the Customer the Hero of the Story
At the upcoming IFDA SMart Conference, a discussion
titled “What’s Your Price? Now What?” will tackle the
current selling paradigm around price. The two featured
speakers — John Paré, business solutions director at Pate
Dawson – Southern Foods, and Rob Keeney, director of
training at F.A.B., Inc. — sat down for a discussion about
price, transparency, DSR/customer interaction, and the
need to make the customer the hero of the story. Whether
you make the conference or not, this subject made for an
interesting discussion. The interview was conducted by
IFDA’s Chris Caldwell.
Question: At the upcoming IFDA Smart Conference, you
guys are doing a back and forth conversation titled “What’s
Your Price? Now What?” That’s an interesting title. What are
you getting at?
John Paré: The art of foodservice selling has completely
evolved over the last 50 years. Customers have changed
the way they buy and caused an evolution that the
distribution industry has got to deal with. We have created
this highly commoditized, price-driven marketplace. Many
of our customer interactions have become more about
transactions.
It seems as though the general foodservice distribution
selling model is based on price, promotion, program —
and things that are based more on pricing manipulation
rather than bringing useful information and inspiration to
the operator.
This, to me, creates a fear factor because the buyer may
feel they are missing out if they don’t object with pricing. It
has almost become instinct for people to say — “what’s
your price” — just to see how low they can get a DSR to
go.
Amazon is a great example of the era of customer control.
Amazon has, in a sense, provided a vehicle and process
that has transformed the customer retail experience.
That is something the distribution business has to
consider. For sales growth and retention, both our leaders
and frontline sales professionals have to reevaluate the
sales process. The sales experience with the customer has
got to be relevant and tailored to that customer’s needs
rather than the needs of the distributor. In the end, I think
10
John Paré
Pate Dawson Company Southern Foods
Rob Keeney
F.A.B., Inc.
this practice will serve both the customer and the seller
better.
So essentially, that is what we are going to tackle on stage
both in a micro and a macro sense.
Question: So you are talking about the DSR and customer
experience together. Does transparency play a role here
from the distributor side?
John Paré: Oh my gosh, yes! Just ask a customer what
they think or step back and observe their behavior. Why do
they have multiple vendors? Why is there constant pricing
pressure?
There is little trust. In many sales instances, every line item
becomes negotiable. After years of little transparency, in
general, the customer feels a bit jaded. If you want to
predict the future of the industry, just look around and see
what’s happening. Cash and Carry is gaining market share
and there are several tech start-ups that are working
diligently to disrupt the established foodservice buying
paradigm by cracking the transparency code and erecting a
model similar to, say, purchasing an airline ticket.
If we continue to operate with these short term strategies
focusing on price, we are going to continue to erode sales
and margin because we seem to have difficulty in
overcoming the price objection at the point of sale.
Defending our share of the business is extremely
inefficient.
Discounting is transactional, so it’s a short term decision
after short term decision and the price posturing does not
breed any kind of loyalty at all. Part of the solution will be
to correct the erosion of trust and transparency that we
have seen.
IFDA EXECUTIVE UPDATE
Question: Rob, a lot of this is about the sales force — the
interaction with the customer. As the director of training at
F.A.B., how do you view this challenge within the sales force
and what do they need to do to succeed?
Rob Keeney: DSRs are kind of caught in the middle. They
are caught in the middle from a number of different
directions. They are caught in between their customer who
they are trying to take care of and yet at the same time
trying to sell to. The other pressure is their management
team may be telling them that “we need you to grow your
sales,” but also at the same time, “we need you to grow
your margin.” That seems counterintuitive. How do I grow
my sales and my margin at the same time?
They are also being taught they need to sell on value, not
on price. That is very confusing to the DSR because they
don’t really know what that means.
Question: If you are working on training and looking at the
sales force versus their management, how do you get them
on the same page?
Rob Keeney: The way I approach it is that I try to teach the
sales people — and whenever I have the opportunity to get
in front of the management team, I do the same thing — I
try to teach them the components that really drive value to
the operator. This is pretty simple, but for some reason it’s
not always well understood. When a manager says to the
DSR — “You’ve got to stop selling on price. You’ve got to
sell on value.” Well what the DSR hears is not to give the
customer the price.
And so they play what I call the price avoidance dance. The
customer says, “What’s your price on these French fries?”
And the DSR says, “Let me tell you about the features and
benefits of this French fry.”
Question: So what you’re saying is to put yourself in the
place of the customer first?
Rob Keeney: Yes, exactly. If you think like your customer
— then you approach it as customer centric pricing.
We teach a module called “customer centric pricing.” So if
you give information to your customer in a way that
makes sense to the customer, including the price, then
that is the definition of transparency.
Now, you brought up the term transparency, and we have
a disagreement in the community about what
transparency means.
Some people are of the opinion that in order for us to be
transparent, our customers need to know everything
about my company — my distribution company — and
how much does it cost me to move a case. I don’t agree
with that.
To me, transparency is what the customer cares about —
which in most cases is whether the cost has come up or
gone down. If that happens, I just want to know about it.
Don’t surprise me when a delivery happens and the price
is $2 more than the last time I bought this, regardless of
when I last bought this. The customer just wants to know if
something on price has changed. To me, that is the
essence of transparency.
The idea that transparency means revealing all my
internals harkens back to what John mentioned about
Amazon. If I go to their website and want to buy a piece of
computer equipment, I don’t care what their operational
costs are to run their warehouse. I just want to know how
much it is and what’s the shipping going to be and what’s
the tax going to be.
In this scenario, the customer gets annoyed because the
DSR won’t just tell them it’s $24.95 a case, which is all the
customer really wants to know.
Lack of transparency is hidden costs that I have to pay that
I did not know about. Transparency is not about the
customer knowing what the operational costs are for the
warehouse.
So the DSR is told by their manager to sell on value, not
price, but what they don’t understand is that price is part of
the value equation. You can’t take price out. You can’t
extract it and say we can have a discussion about value
when we can’t discuss price.
Question: Let me throw a final question to both of you —
and John, you can take this first. From what you are both
saying, it sounds like there is some discipline that might be
put around the discussion of price and value.
So what I teach is understanding the simple value equation
— the relationship between how much something costs
and what are the benefits — what do I get when I pay that
$24.95.
John Paré: I would agree that it is a disciplined approach.
You have strategy and tactics, or put another way you
have micro versus macro. From a strategy sense, you
can’t build sustainable long-term results on this idea of
pricing manipulation.
continued “What’s Your Price?” on last page
11
2nd Quarter 2015
HELPING OPERATIONS PEOPLE WORK SMARTER, FASTER, BETTER.
Case Studies in Miles Reduction Shared by Eby-Brown
and Merchants Foodservice
By Caroline Perkins
Delivery routing has come under scrutiny by distribution
companies as a way to decrease expenses and increase
profitability. A discussion at the 2014 IFDA Distribution
Solutions Conference demonstrates the differences in the
approach to reducing miles and improving profitability
between a convenience store distributor using a technology
solution and a broadline distributor using a spreadsheet
solution. Sean Jones, senior vice president of transportation
for Eby-Brown, and Matthew Granlund, corporate director of
operations and logistics at Merchants Foodservice, were the
speakers.
C-Store Delivery
Jones noted that it has taken six years to bring about
change in Eby-Brown’s routing system. He said that when he
started at the company, the routing room at one of the
distribution centers – like many companies – had maps on
the wall with push pins. Eby-Brown has seven distribution
centers that deliver to 15,500 retail locations and wanted to
optimize its delivery system.
Given the nature of c-store delivery, which is heavily chain
based, Eby-Brown is able to chart fixed routes for each day.
The only exception to this, Jones said, is when a customer
has forgotten to place an order. When the customer calls in,
the order is put into a special delivery log and is guaranteed
to be delivered within 24 hours. This can amount to between
10 and 30 special deliveries a day. Jones describes the mix as
fixed and fixed-plus.
The positive change achieved by the company was
primarily driven by the practice of re-routing, Jones
explained. They first started with large chain customers, like
one customer with 900 stores. Local routing was still done
with local routing knowledge.
In 2010, they began seasonal routing, taking into
consideration hours of service and transportation resources.
Seasonal re-routing now takes place twice a year, for
summer and winter periods. When they go from summer to
winter, Jones said, they save 52 routes and 11,000 miles due
to decreased winter volume.
At first, customers would “freak out” at having to change,
Jones said. He found that chains were the easiest to
reschedule, since they are not as particular about timing as
12
smaller companies. However, even the smaller customers
are now used to adhering to new schedules. Sales people
explain that they can save costs by tweaking the delivery
times. Jones notes that the company’s sales reps have
gotten better at “selling” delivery times in addition to their
portfolio of products. They often tell customers about fuel
savings that can be realized.
The transportation team works with sales on routing
deliveries. The transportation group lets sales know if there
are opportunities to add deliveries in any areas and urges
the sales team to find new customers that will fit the bill.
Until now, only the corporate office can make any
routing changes. Jones reports they are working on
integrating direct routes into the SAP system so the
transportation managers will be able to go in and move
things around when necessary. He says they seldom move
the routes of the big chains once they are optimized even
though they can sometimes be problematic when a chain
runs a promotion and orders significantly more stock.
These “no-fits” have to be handled separately. However,
the transportation managers will be able to customize
routes for smaller independents.
The routing system loads the information into each
driver’s routing software. The driver presses a button for
the route and the system guides him to each stop. All of
the cargo for any given route is also loaded in, whether
dry, cooler, freezer, or cigarette carton items, to confirm
accuracy.
The process is still improving. Jones said that “every
reroute we do, we get better.” He also noted that any miles
reduction process has to have the blessing of the CEO and
it has to be a vision of the company in order to succeed.
Broadline Delivery
Granlund explained that, at Merchants, they have
improved profitability and reduced miles with a simple
spreadsheet system. Even though the data itself is
achieved through technology, the spreadsheet shows the
profitability at a glance. The numbers in the spreadsheet
are pounds, routes, stops, cases, and miles. These, along
with actual gross profit per route, are the only exact
numbers, he says. They have four “game plays” that go
IFDA EXECUTIVE UPDATE
into the routing consideration: Fixed cost per case, variable
mileage costs, backhaul income, and gross profit.
Merchant’s has been able to reduce losses from delivery
by 55.3 percent Granlund said. The key factor behind
reduction was the creation of a miles-reduction and routeprofitability team of six. That team includes the division
president, who heads the team, plus management from
sales, operations, transportation, routing, and backhaul
logistics. The team meets weekly to analyze reports and
plan tactics. As Granlund says, “You can’t just tell the
transportation department to reduce miles. It will
antagonize the customer.” In other words, it is better to
have a team approach that considers all aspects of change.
Merchants has four distribution centers, each of which
has a large delivery range, with drivers traveling many
miles. More than half of the business is made up of street
customers, which as Granlund says, means 3,000
individual customers with individual problems. He gave
the example of one customer that requires deliveries
before 10 a.m., regardless of the day of the week, because
the owner, who checks the truck, has a standard tee time at
noon. In that case, it matters what time the truck gets there.
The miles reduction focus was started in October 2013.
At first, the team found itself to be overwhelmed trying to
manage the 50 to 75 routes per day at each distribution
center. Granlund says that CEO Andy Mercier suggested
they refocus the game plan and take a hard look at the 20
least profitable routes at each facility and work to improve
those. This strategy allowed them to make adjustments to
the routes in an orderly manner, which soon resulted in
miles reduction. Having sales managers on the team
worked well, he said, as they were able to understand the
need to rearrange stops and could counsel their sales reps
to work with their customers to adjust.
The team, as well as district sales managers and
transportation supervisors, also receive bonuses when
profitability improves. Once a route is profitable, another
least-profitable route is added to the 20. They started with
the worst cases first and have had great success. The
Jackson facility now has no losing routes.
Merchants has a hybrid system of fixed routes mixed
with customized. Granlund explained that the first six or
seven stops on a route are “anchor” customers. The rest
can be fitted in to fill the truck. He added that occasionally
sales will create an “investment” route if it looks like one or
more new customers will turn out to have consistent
orders. But, the team tracks these routes to be sure they
are becoming profitable. If not, changes are made.
Matt Granlund of Merchants Foodservice used football
analogies in summing up how his company made the
push to save costs on routes that were losing money.
Delivery routing is different for each distribution center so
the process is not centralized. It is necessary in broadline
distribution to be flexible to address customer issues,
Granlund said. Broadline is also able to take advantage of
key drops, which make routing easier. Jones noted that most
c-stores are open 24/7, so key drops are not an option.
In addition, Merchants’ transportation and logistics
departments started to work together, digging deeper to find
more backhauls. The distribution centers haul goods for their
own warehouse as well as handle private fleet shipping.
Granlund says that the two smaller distribution centers will
often fill a truck with products for all the facilities, then do
interbranch transfers at their docks.
Jones reiterated that the miles reduction process is not
easy, reminding the audience that it took Eby-Brown six years
to see positive change. Granlund agreed, noting that success
comes from a team approach.
For conference info visit www.theIFDAconference.com
13
2nd Quarter 2015
How CRM, Mobile Apps, and Content Can Drive Sales
By Caroline Perkins
The return on an investment in apps that support the
sales effort can be off the charts, according to technology
advocates from two distribution companies and a supplier
who presented case histories in a session called
“Technologies that Drive Sales” at the 2014 IFDA SMart
conference. Bryan Simnitt, regional director of territory
sales at Nicholas & Company, discussed his company’s
success with its CRM (customer relationship management)
program. Debbi Price, business effectiveness manager at
Georgia-Pacific Professional, talked about their success with
mobile apps, and Sara Kies, marketing manager for Martin
Brothers Distributing Company, talked about content
marketing, social media, and mobile friendly touch.
Nicholas & Company: Adopting CRM Technology
Adopting CRM technology four years ago has moved
Nicholas & Company from an inefficient process of creating
spreadsheets from handwritten notes or the memories of
sales reps to managing a cohesive system of customer
information that effectively supports a much-improved sales
strategy.
All of the elements existed before, said Bryan Simnitt,
director of sales operations, they were just not in one
location that could be accessed by all the selling team. Now,
the company’s marketing services, training, customer data,
trends, leads and all sales-related data live in the CRM
database. “We have a saying,” Simnitt says, “If it’s not in our
CRM, it doesn’t exist.”
Simnitt outlined elements he sees as necessary to get the
most out of a CRM program.
Framework for the selling process: Create a framework for
entering all sales call data into the program and train the
reps to enter it on a consistent basis.
Common selling language: Use common phrases and
terminology that will be understood by all team members:
support staff, specialists, purchasing, credit, transportation,
as well as sales people. This might include terms such as
“level of influence,” our “single sales objective,” the
“business reason for being there,” and our “minimum action
commitment.”
Visibility and transparency: The data is available to all staff
who have sales-related activities, as well as management.
Pipeline management: Current information on how the sales
effort is going relative to the budget.
14
Workflow to streamline processes: All of Nicholas &
Company’s sales and marketing resources can be targeted
for customers as a result of the data in the system.
Sales management playbook: Sales managers now have a
playbook for each rep that outlines opportunities and
provides a process for measuring performance.
“Now, with CRM in place, I’d say our organization is much
more aligned,” Simnitt says. “We still have our products and
services, but now we’ve built everything around the selling
process and it gives us a more effective way to go to
market.”
Mobile Apps: Customer Needs Satisfied Easier,
Faster, Smarter
Georgia-Pacific had a good online platform in place —
GPXpress Online — but it was not convenient for mobile
device users. The site had secured access, transactional data,
and 24/7 self-service. But, says Debbi Price, “We wanted to
do better.” Price is customer technology manager at the
company.
In order to ensure success, the company surveyed
customers about their needs. The results were not
surprising, but provided focus for developing a mobile app
portfolio. Customers still want sales and marketing
collateral, however, they want easier access to product info,
faster access to samples, and smarter training on products.
Price showed a timeline of the process, which spanned
2013. The company began by revamping the sales and
marketing collateral, making it mobile friendly, and adding
videos. The apps were introduced at a customer show and,
subsequently, at regional sales meetings. Then, they created
a usage contest for distributor partners, with monthly
progress reports on the challenge. Finally, they added a
Mobile Chat function that provides quick answers to
commonly asked questions – on the go.
Price provided five guiding principles from the year-long
process:
1. Target your customer base (tailor apps to segments)
2. Listen to your customers
3. Make it easier, faster, smarter
4. Measure usage and adoption
5. Make it better
IFDA EXECUTIVE UPDATE
Sara Kies (standing) of Martin Brothers Distributing Co., Bryan Simnitt of Nicholas & Company, and Debbi Price of
Georgia-Pacific Professional gave their take on using technologies to drive sales, content, and more.
After 18 months in the market, Price reports, they saw
mobile usage go “off the charts.” They have about 5,000
distributors registered as mobile users.
For Content - Educate, Don’t Sell
One of the first things Sara Kies did when she got to
Martin Brothers Distributing Co. was to cancel yellow-book
advertising, believing that this was not an effective way to
educate people about your company. Kies, who is
marketing manager at Martin Brothers, started her
presentation with a quote from content marketing expert
Jay Baer, scheduled to speak later in the agenda: “If
someone has to call you to figure out if they should buy
from you, then you’re doing it wrong.”
During the last year and a half, Kies has led the process
to build a mobile-friendly website. Martin Brothers had a
successful website but it was not “mobilely optimized.” In
other words, you couldn’t view it well on a smart phone or
tablet.
Kies went on to offer five “rules” to keep in mind for
social media, being mobile friendly, and creating content.
Set realistic goals: “Don’t think you’re going to get a
million Facebook users in a year,” Kies says. She set a goal
of increasing traffic by 20 percent.
come, she says. Martin Brothers has “massive amounts of
educational content” in various formats already, so Kies
created a blog using the data. This helped connect content
directly to customers.
Mix in some old-school tools: Since not all customers use
mobile apps, Kies feels you have to keep other traditional
items in the mix, such as Martin Brothers print magazine.
The publication and the blog have the same information
but reach targets by different delivery methods.
Educate, don’t sell: “If we don’t give our customers the
information they need to know, they will get it from
somewhere else,” Kies points out. Her philosophy is to
teach customers about products before they buy, thereby
building trust. “We try to get customers through the door
by telling them what we know,” she says.
Be patient. The return will come: Kies said her original
“realistic goal” of increasing mobile usage by 20 percent
has been surpassed. To date, mobile usage growth is at
500 percent.
Kies says there is always more you can do. “So far,
we’ve been successful, but not as successful as we’re
going to be,” she says.
For conference info, visit www.IFDASMart.com
Focus on mastering one tool: If you choose one tool –
Twitter, Facebook, or a blog – and master it, the rest will
15
2nd Quarter 2015
2015 IFDA Partners Executive Forum Highlights
RIGHT: Sidney Pearce (center)
is joined by her family as well
as Mark Allen of IFDA
following the posthumous
presentation of the IFDA
Cornerstone Award to her
husband, Mac Pearce. The
award celebrated the
achievements of Mr. Pearce, a
longtime leader in the
industry who was president of
Performance Foodservice at
the time of his death in
September 2014.
RIGHT: Attendees came together for an opening reception Sunday evening, followed by a dinner that included the presentation of
the IFDA Cornerstone Award and the IFDA Partner of the Year Award. LEFT: The Chairman’s Reception for Platinum and Gold Partners
opened the 2015 Partners Executive Forum.
Following the opening dinner, attendees
capped off the night at the opening
dessert reception sponsored by Tysons.
AT RIGHT: (L-R) Bill Mathis of Cash-Wa
Distributing, David Ginsberg of
Ginsberg’s Foods, and Robert Torrence of
Tysons Food Service chat at the dessert
reception.
16
IFDA EXECUTIVE UPDATE
ABOVE: David Renzi and Jim Graham (right foreground) of Renzi
Foodservice meet with IFDA Gold Partner Campbell Soup Company
during a Partner Meeting at the 2015 Partners Executive Forum.
ABOVE: Barry O’Connell and his team from HFM FoodService
meet with new IFDA Partner Major Products. Along with
soupbases, marinades, and seasonings, Major Products displayed
their line of fruit base concentrates (inset) in their meeting suite.
John Bevevino of Independent Marketing Alliance meets with Jim
Kinnerk, president of ConAgra Foodservice (speaking) and other
members of his team during a Monday Partners Meeting.
IFDA Gold Partner AdvancePierre Foods meets with Stanz
Foodservice President Mark Harman (far right), and other
members of his team.
17
2nd Quarter 2015
Six New Members Join IFDA in 1st Quarter 2015
Meadowbrook Meat Company, Inc. (MBM) was founded
by J.R. Wordsworth in 1947 as a pork processor catering to
its local market in Rocky Mount, NC. The company has
grown to become a leading $6 billion foodservice
distributor, providing foodservice supply chain services to
thousands of national and regional chain restaurants
within the continental United States. MBM operates from
38 distribution facilities and employs more than 3,300
nationwide. In 2012, MBM merged with McLane Company
and is now a part of Berkshire Hathaway. Andy Blanton,
president, is the Head of Firm contact to IFDA and is
looking forward to becoming actively involved with the
association. MBM is a member of UniPro Foodservice.
RK Foodland was founded in 1987 and is based in
Bombay. RK Foodland is India’s first organized supply
chain company in the food sector. Known as the supply
chain solutions specialist, the company’s 500 employees
service a broad customer base that includes McDonald’s
India and other well-known QSRs such as KFC and Taco
Bell, as well as independent restaurants, education,
convenience, and retail. RK Foodland includes a pan-India
network of world-class multi-temperature distribution
centers covering 1.5M square feet, with a fleet of 140 multitemp trucks. The company serves many Fortune 500
brands including Sodexo, Pepsi, Unilever, Kraft Foods and
others, and is ISO 22000 certified. Raju Shete is the
(L-R) CJ Freshway's Seunghwa Yi, senior vice president of
strategic planning division, and Seonghwan Yoon, vice
president of sales BU are presented a membership
certificate from Songhwa Yang, partner at CY & Partners,
and Jeongseok Lee, director of IFDA Korea.
18
founder and managing director in India and Roger Kharade
is president of their international office in Sugar Land, TX,
and is the primary contact to IFDA. To learn more about RK
Foodland watch their corporate video at
https://www.youtube.com/watch?v=Pk_yIbIuA9w or visit
www.foodland-usa.com
G & C Foods of Syracuse, NY, is a re-distributor of
refrigerated, frozen, and dry food. G & C Foods services
customers in 19 states from New England to the Mid and
South Atlantic states, with expanded delivery areas to
Alabama, Kentucky, Michigan, and Mississippi. The
company operates a 276,000 square foot facility located in
upstate New York, with a fleet of multi-temp trucks, utilizing
state-of-the-art technology. The facility includes a USDA
piece room where master cases of beef and pork are repacked into smaller boxes that are more manageable for
the end user. David Lepage, president, is the primary
contact to IFDA. To learn more about G & C Foods, visit
www.gcfoods.com.
Marco’s Pizza Distribution — a specialty distributor based
in Maumee, OH — serves Marco’s Pizza stores in the
Midwest, including Ohio, Michigan, and Indiana. The
Marco’s Pizza franchise has more than 500 locations in 35
states and the Bahamas. In 2010 the company launched its
branded distribution company as part of the next phase of
growth. Marco’s Pizza Distribution carries food and nonfood items, including small equipment and uniforms,
everything a franchisee would need to operate. Tony
Romano is the general manager and primary contact to
IFDA. To learn more about Marco’s Pizza visit
www.marcos.com.
A.I.S. Industries was founded in 1989 and located in
Tucson, AZ, A.I.S. Industries offers a wide selection of
superior quality stainless steel foodservice equipment to
independent operators, colleges, and universities,
healthcare, government and military, and correction
institutions. From design to fabrication, installation,
modification or repair, their warehouse/ fabrication/
distribution center delivers large equipment, including
work tables, hoods, cooking equipment, sinks, and more to
customers. Paul B. Hoffman, Sr., is president/owner and is
the primary contact to IFDA. To learn more about A.I.S.
Industries visit their website at www.aisindustries.com.
IFDA EXECUTIVE UPDATE
IFDA Korea Hosts Meetings with Dot Foods in Seoul
On April 8, IFDA Korea held a breakfast meeting for
senior executives at member companies and later in the
day held a share group for member purchasing managers.
Both meetings were coordinated by Songhwa Yang, a
partner at consulting firm C.Y. Partners in Seoul and the
director of IFDA Korea. Dot Foods representatives spoke at
both meetings and the company is partnering with Yang and
C.Y. Partners for sales representation in South Korea.
During the breakfast Cullen Andrews, vice president of
national accounts at Dot Foods, provided a presentation on
the foodservice market in the U.S., shared perspective
about trends, and provided an overview of Dot Foods. The
afternoon share group was a session on purchasing that
featured Jeff Adams, Dot Foods international sales
manager. Adams provided perspective on purchasing best
practices and key cost drivers that purchasing influences.
“IFDA Korea has been able to bring together many of the
established distributors in that market in an effort to
collaborate more,” said Andrews. “As a result, though we
were there for a very short period of time, we were able to
interact with many different distributors. It was very
productive.”
When asked if there were particular topics that IFDA
Korea members were curious about, Cullen said “they are
clearly interested in how the trading partner relationships
work in the U.S.” In Korea, there are a number of different
intermediaries and lines are blurred between who buys
from whom. “The distributor does not necessarily just buy
from the manufacturer. They also buy from what they
might call vendors or agents. There are a lot of players
involved,” said Cullen.
He also said there was interest in inventory management
at Korean distribution companies that are moving from
serving specific customer bases to becoming more
broadline in nature.
During a breakfast meeting in Seoul with executives from IFDA Korea member companies, Cullen Andrews, vice president
of national accounts at Dot Foods, discussed his company and the foodservice marketplace in the U.S.
CJ Freshway is a food and beverage distributor and
provides contract meal services in South Korea and
internationally. The company supplies Western, Japanese,
and Chinese food items to franchises, individual
restaurants, hotels, and buffets. The company distributes
approximately 20,000 agricultural, fishery and livestock
products, processed foods, and kitchen appliances to food
dealers, food service providers, chain stores, and general
restaurants. The company’s contract meal services include
approximately 400 public dining facilities in business sites,
office buildings, hospitals, golf clubs, and food courts, as
well as schools, public organizations, and others. In
addition, it supplies raw materials to wholesalers and
retailers of agricultural, marine, and livestock products, as
well as food manufacturing factories. CJ Freshway
Corporation was founded in 1988 and is based in Yongin,
South Korea. To learn more about CJ Freshway, visit
www.cjfreshway.com.
19
2nd Quarter 2015
“Syndee Stiles” continued from page 5
What’s Your Price? continued from page 7
the distributor. As the information gets handed off, you
have opportunities for error. Through GDSN, the key pieces
of information that are needed throughout the supply chain
are identified and then provided by the entity with the best
access to accurate information — the manufacturer. They
publish it in a standard format that is accessible to trading
partners. You don’t have to rely on information being
passed along in an email or on a spreadsheet — you can
go directly to the source. The anticipated benefits are
accuracy and efficiency.
The successful distributor recognizes that their customers
want useful information and knowledge — practical insights
they can use for their restaurant in their unique segment.
Another very important outcome for foodservice
operations is the opportunity for improved speed and
accuracy in traceability. The GS1 barcode standards are
taking advantage of a well-established technology that has
been around since the ‘70s. Improvements in technology
have made it possible to make the barcodes more
dynamic, to relay more information than was possible in
the past. That can be a challenge for suppliers. It means
they are not preprinting a static UPC code, which is the
same for every case they ship. The GS1-128 barcode
changes with what’s in the specific case to include the
actual lot or product date. This wouldn’t be possible
without something like GS1 that’s setting a single standard
across all products and industries.
Q: So what do you love about your job?
Stiles: First, the people. The fact is, I get to work with an
amazing group of people who care and are good at what
they do. They have a passion for finding ways to do it right
and to do it better. It’s kind of hard to beat that.
I also love the diversity and energy of my job. There’s
always some new problem to solve. It could be something
that we can do better. It could be something we’ve never
done before.
Foodservice is a really dynamic industry and things are
always changing. It can be the regulatory environment; it
can be the technology; it can be the needs of a customer. It
can even be the weather, because our customers
absolutely rely on us to be there on time, every time with
quality products that are delivered on very thin margins. It’s
not optional. You can’t say, “Oh, the weather’s bad, we’re
not going to deliver this week.” That can add stress, but it
also presents a challenge. I’m in a role where you can see
all that – and get to be part of the solution.
Staff Contact: Theresa Kessler
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This will require newfound skills and newfound strategies
that are not just about product knowledge, but are also
about industry related expertise and the ability to be
resourceful, to discover and diagnose what the customer’s
problems are and to bring solutions that meet their overall
needs.
Our mission has to involve creating the strategies and
processes that help our customers flourish in a creative
sense and in profitability also, because that is what is going
to sustain us in the long run. And this also breeds loyalty
too. Our company’s values and guiding principles have to be
focused on doing the right thing for the customer. If we’re
going to change the perception of the distributor as a
necessary evil, the customer has got to be the hero of this
story.
Question: Rob, what’s your take?
Rob Keeney: I agree that we need a disciplined approach,
but none of that is helpful if the discipline is incorrect.
So it gets back to the cultural issue, which is the mindset. I
like John’s phrase that at the end of the day, the customer
has to be the hero of the story.
We have set up a system around pricing that doesn’t take
into account what the customer cares about, which means
the customer isn’t the hero of the story. Any discipline
around this has to be grounded in the right mental
framework, which is cultural.
It’s how you view the world that is important. If you view the
customer as ultimately important and strive to understand
what is important to them — what I call their value drivers —
if you take the time and effort to do that, you can get to the
right framework.
John Paré: As an industry, we are currently entrenched in
this pricing paradigm — but we know there are people out
there working intelligently to rock this status quo.
Because of all the technology available, you have start-ups
out there that are figuring out how to take transparency to
our industry. I have a sense that it won’t be long until
somebody figures this out, and that will force a change that
we have to be ahead of.
Staff Contact: Mendy Cunningham