Power in Numbers
April 1, 2005
Power in Numbers
Industry associations convene to share ideas and develop a vision for the future.
In a Groundbreaking Meeting, Leaders From 11 Associations got Together in March to Brainstorm new Ways in Which They Could Work Together to Strengthen the Grain-based Food Industry.
The first-of-its-kind meeting was called by the American Bakers Association (ABA) to be an educational meeting through which bakers, salted-snack producers, millers, equipment manufacturers and educational institutions could pool their resources to address a number of critical issues impacting the industry. It was held right before the ABA’s Annual Convention in Orlando, Fla.
“What we had in this room was the leadership in this industry,” said Gary Prince, chairman of ABA and president/CEO of Weston Bakeries.
“We needed to bring all of the talent together and brainstorm about the future to determine if there is a shared vision about the future of what this industry should look like,” he added. “‘How do we renew our image?’ was the big question and the common theme through the latter part of the day. We also discussed how [we can] bring young, skilled talent into the industry.”
Initially, noted Paul Abenante, ABA’s president and CEO, the event was supposed to be a one-time meeting. However, after the positive reaction from the associations’ leaders, the group decided to hold more meetings in the future.
“We found there were a lot of common interests and goals, and there was a tremendous amount of energy and enthusiasm when we left the meeting,” Abenante said. “There was a decision that this kind of dialogue should continue.”
Attending the meeting were representatives from ABA, American Institute of Baking, American Society of Baking, Allied Trades of the Baking Industry, BEMA, Grain Foods Foundation, Independent Bakers Association, Kansas State University, North American Millers’ Association, Snack Food Association and the Wheat Foods Council.
Each association took time to explain its mission and priorities and what it contributes to the industry.
“I came away with a clear understanding about what these groups do,” Prince says. “I never really understood the roles of some of these organizations.”
During the meeting, the associations’ members discussed how the industry could be proactive on such issues as creating a new generation of skilled labor by providing a number of new scholarships.
“We need to commit to renewing and revitalizing the industry,” Prince said. “Very frankly, we owe it to our customers and our consumers. We owe it to the people — the many thousands who work in the industry.
“If we cannot commit to change and commit to renewing the industry, we cannot ask our people and our customers to support us if we leaders cannot share a vision of what this industry is like,” he added. “It’s going to take us some time to get there. It’s not going to happen in a month.”
Prince noted that the industry is rapidly changing. Last year, for instance, bakers were debating whether the low-carb craze was a fad or a long-term trend. Consumption of grain-based foods was declining. There was uncertainty as to whether the Grain Foods Foundation, the public-relations vehicle for the baking industry, would get off the ground.
“We had a lot of unanswered questions this time a year ago,” Prince recalled. “As an industry, we didn’t feel very good. We don’t feel great today, but we feel much better.”
Today, whole grains are the rage, and the ABA is working with the Food & Drug Administration (FDA) on changing the standard of identity to allow bakers to fortify whole-grain breads with folic acid. To support the petition, Sara Lee Bakery Group is sponsoring human studies to test the impact of folic acid and whole grains on blood lipid levels.
“FDA was so encouraging to us,” says Lee Sanders, ABA vice president, regulatory and technical affairs. “It was unprecedented, the letter we received from [FDA] acting commissioner Lester Crawford, to do this. He wanted us to work with his staff. They would help us draft the petition.
“I can’t remember the last time we received a letter like that. When you receive that kind of encouragement from the agency, I think they’ll fast track it.”
In other ABA news, the association raised more than $70,000 for its political-action committee during a dinner featuring Sen. Zell Miller (D.-Ga.) during the Orlando convention. The record-setting fundraiser brings the American Bakers PAC’s coffers more than halfway to the amount budgeted for the current two-year election cycle.
Here’s a Chance to Golf with your Customers
Want to wine, dine and play golf with the top executives of major retail chains?
Baking industry executives now have a chance to do just that at the Grain Foods Foundation (GFF) Golf Tournament, scheduled for July 10-11 at the Caves Valley Golf Club in Owings Mills, Md. The registration deadline is May 10.
Organized by the American Bakers Association (ABA) and the Allied Trades of the Baking Industry (ATBI), the event will randomly pair participants from the baking industry with a cross-section of retailers.
The goal is to raise $125,000 for the Grain Foods Foundation, which is the new public-relations arm for the grain-based foods industry. In addition, the organizers hope to educate retailers about the GFF and get them to support the foundation’s efforts to combat misinformation and advance the nutritional value of grain-based foods, notes Gary Prince, ABA’s chairman.
To join this exclusive event, baking industry participants will contribute $5,000 to the foundation. Non-golfers can mingle during the cocktail hour and have dinner by donating $1,500 to the GFF.
Fred Ridley, president of the United States Golf Association (USGA), will be the dinner speaker. Participants will be housed at the Caves Valley Golf Club or the Baltimore Marriott Waterfront.
The golf outing is the brainchild of J. Brad Burris, partner, D. Thomas Associates and member of the ABA’s board of directors.
To register, call 202-789-0300 or e-mail Kelly Knowles at firstname.lastname@example.org.
IRI Summit Brings
New Ideas to Forefront
When it comes to the retail marketplace, consumer-packaged goods companies must constantly revise their strategies, practices and systems to keep up with the ever-changing consumer.
The second annual “Reinventing CPG & Retail Summit,” hosted by Information Resources, Inc., set out to help these companies keep up with the fluid mindset of consumers. It also allowed IRI to unveil several new services that will help its customers meet these goals.
Kicking off the summit, which was held Feb. 27-Mar. 1 in Miami Beach, Fla., was Romesh Wadhwani, chairman of Symphony Technologies and IRI, who laid out a five-point strategy for retail execution and consumer-driven enterprise management.
First, Wadhwani explained that companies must improve their retail-performance management. CPG and retail businesses need to look at retail problems at the neighborhood level in a unified, holistic way.
Wadhwani explained that category management has become standard, leaving no company with any sort of competitive advantage. He advised attendees to look across multiple categories in their assessments and to try to understand the different kinds of trips that consumers make. How do they tie into particular, loyalty- and solution-based stores that provide the solution the consumer seeks to complete that trip’s mission?
The third strategy Wadhwani said would help the industry perform better on the retail level was the reinvention of the market-information value model. For the new strategy, highly detailed, daily or real-time data that could focus on the store, stock-keeping unit or regional level was necessary.
Consumer-driven supply and demand also is necessary for Wadhwani’s overall strategy to work. Real-time data would be created in this tenet of the strategy as well, and it would take into account sales velocity, trade promotions, etc.
Finally, it is necessary to transform the market-research organization. That group needs to take on the much larger role, Wadhwani suggested, of being the business-intelligence central nervous system.
IRI has positioned itself well in response to these new strategies’ effect on the information industry. At the Summit, IRI unveiled its new, $300 million data platform, MarketKnowledge, which can process massive volumes of data that will be used to track daily sales; identify store- and neighborhood-level trends; manage key decision alerts; and compute market models and merchandising lift programs.
MarketKnowledge will be used to power two new programs offered by IRI, Retail-Performance Management and Out-of-Stock Monitoring Solution, both of which allow companies to focus more accurately than ever before on problem areas within stores.
The summit also allowed attendees to get pointers from some of the top CPG and retail executives in the nation about the latest trends and techniques in such areas as consumer testing, cooperating with retailers, building a business by finding a niche and making clear, disciplined choices to improve the foundation of a business.
Wal-Mart Rolling Out RFID Product Tracking
Wal-Mart’s top 100 suppliers and several other packaged-goods companies began to track inventory using radio frequency identification (RFID) tags this past January in certain parts of the nation.
Although many suppliers experience significant efficiencies with the system, several major challenges still need to be addressed, Carolyn Walton, Wal-Mart’s vice president, information systems division, recently noted during an American Bakers Association’s Fleet and Distribution Committee meeting.
Some of the common issues with RFID technology include programming glitches, inability to read the chips and the high cost of rolling out the system, according to food manufacturers who have explored the process.
In other distribution news, the committee conducted a daylong summit to address the ongoing, multimillion-dollar issue of lost trays and baskets.
To combat tray theft and loss, bakers need to improve their tray-inventory business and educate their sales forces on the costs and importance of returning trays and baskets to bakeries and depots, the committee noted.
In one area of cooperation, Chicagoland bakers agreed to initiate a broad tray-exchange effort and coordinate information that will facilitate the return of trays and baskets.
Earns Rich Rewards
Buffalo, N.Y.-based Rich Food Service, a division of Rich Products, honored the “best of the best” of its company associates with its premier distinction — the Crystal Buffalo Award.
The award is given to those associates who are driven and devoted, and who represent the highest level of regional and national account accomplishments — amounting to significant contributions to the company’s overall success and growth.
The 2004 Crystal Buffalo recipients included: Mary Vitella, who received the O.E. (Gene) Timmerman Award, National Account Manager of the Year; Henri Mesclon was presented the National Account Culinary Manager of the Year Award; Mark Curley, who was honored with the Regional Sales Manager of the Year Award; Jason Zebrowski, who achieved the Region Chain Account Culinary Manager of the Year Award; Jake Brach, ACF Certified Chef de Cuisine, was awarded the Culinary Manager of the Year Award; Randy Latimer received the Zone Director of the Year Award; and Mike Mahoney was presented with the National Account Director of the Year Award.
The awards were presented at the Growth Academy III meeting in Atlanta.
Also, Rich Products celebrated its 60th anniversary with plans for major growth in its near future. The $2 billion company, which Forbes magazine ranks as the 129th-largest private firm, plans to expand its annual sales by 50% through a combination of internal growth and acquisitions. Rich Products recently acquired San Francisco-based Rolling Pin Manufacturing Corp., a donut and cake manufacturer.
Are You Watering Down Your Profits?
The topic of energy makes the headlines almost everyday in the nation’s newspapers. As a result, most wholesale bakers are keenly aware of the skyrocketing costs of energy, but the cost of water is rising almost as quickly, says Anne Giesecke, vice president of policy analysis and environmental activities for the American Bakers Association.
Although energy and water produce about 5% of the manufacturing costs for a loaf of bread, water and energy costs are increasing at a rate of about 20% a year.
“That’s what has gotten people’s attention,” Giesecke says. “The costs are going up so rapidly. Water doesn’t make the front page very often, but it’s still a major cost to the industry and per unit of manufactured products.”
To control costs, Giesecke suggests metering water usage. In many cases, it’s easily implemented. The goal is to keep employees accountable for the amount they use.
Controlling energy may be more difficult. In the Northeast, Giesecke says, some companies are exploring fuel cell technology. Others are exploring hybrid trucks, which combine the use of diesel and fuel cells in a way that’s similar to the technology that Honda and Toyota use in their hybrid automobiles.
Perhaps an easier way to improve mileage is to fully inflate the tires on route trucks and other vehicles. Doing so can add 2% to 3% more miles per gallon, notes Robb MacKie, ABA’s vice president of government relations.
To reduce natural gas usage, many wholesale bakers are reusing heat in the ovens and improving the oxygen flow in the oven to maximize the burn. These are incremental changes that have been around for years, but with the high price of energy, they are now being implemented by bakers, Giesecke says.