This Texas-based distributor’s formula for success is all about earning the trust and confidence of its customers and vendors.

The corporate slogan at Grocery Supply Co., Sulphur Springs, Texas, positions the company perfectly. “Big enough for the job, small enough to care,” it states.

With sales in excess of $1 billion, Grocery Supply Co. clearly is big enough for most jobs. The part of the tagline about caring rings true as well—based on both Confectioner’s meetings with company executives and on responses we received from candy vendors interviewed in our Distributor of the Year decision-making process.

Grocery Supply Co. services about 5,000 retailers (the vast majority of them convenience stores) from distribution centers in Sulphur Springs and San Antonio. Its parent company, GSC Enterprises, also operates Fidelity Express/Entronics, a financial services company, as well as a division that distributes to military commissaries.

“What it comes down to is trust and confidence,” says Steve Shing, corporate vice president of marketing and trade relations for GSC Enterprises. From management on down through the ranks of employees, the distribution company works hard at maintaining that trust and confidence.

“Our corporate philosophy is customer-driven,” says Shing. “We’ve always felt that in order to be a top-notch supplier, you really have to listen to your customer, and, if at all possible, to come up with solutions to their problems.

“We’ve always prided ourselves on our service-level capabilities,” Shing continues. “We’re one of, I think, two in the industry that can offer our retailers better than a 99 percent service level.”

Responsiveness to customers applies to all of GSC’s retail clients—whether they have hundreds of stores or only one. Every customer is assigned an account coordinator and a customer service representative who work to address all of that customer’s ordering needs. The company’s size gives it substantial buying power and transportation capabilities, from which its customers may benefit.

“They have the opportunity to know us all by name,” says Howard Stroud, director of merchandising/purchasing for Grocery Supply Co., speaking of the company’s retail clients and the access they have to GSC staffers.  “When they call, they’re not going to receive just pre-recorded messages. Even if they have only one store, they can call us directly. They get to know us.”

“Regarding our vendors … they too are a very, very important part of the picture that leads to our success,” Shing adds. “We put a lot of emphasis on our relationships with our vendor community.”

The company is family-owned. Chairman and CEO Mickey McKenzie is the son of one of three founders, who started the business in 1947 in Mt. Vernon, Texas, which is not far from Sulphur Springs.

Like many of Grocery Supply Co.’s staff members, snack and confections category manager Pat Goggans has a long track record with the company. She’s been with GSC for 30 years, and candy has been a constant in her category management responsibilities, which at various times over the years have also included beverages, dry groceries and tobacco.

“Pat is first and foremost customer-oriented,” says Stroud. “When she looks at something, her priorities are: Is it good for the customer? Is it good for Grocery Supply Co.?”

Here’s a look at a few of the programs the company has designed to benefit both its retail customers and its vendors.  

The Advantage Program – This quarterly publication provides retailers with the opportunity to pre-book seasonal products, floor shippers, counter units and multi-case promotional packages offered by vendors.
“It gives retailers the opportunity to plan early for their upcoming quarterly promotions,” says Stroud.

It’s proven to be an effective vehicle for generating incremental sales volume, reports Stroud, who was hired 11 years ago to establish such a program at GSC. “It’s not designed just to sell one box here or one box there,” he observes.

Each Advantage publication has from 100 to 120 pages; candy accounts for from 50 percent to 60 percent of the featured items in the publication.  

MarketPulse Bulletin – This weekly bulletin provides retailers with information on new items available at Grocery Supply Co. It features product facts, including pricing, allowances and item numbers for ordering. The publication also details the latest industry news and marketing trend information to aid retailers in developing their merchandising strategies.

“These publications are our main methods of contact with our retail accounts,” says Goggans. The MarketPulse bulletin, in particular, helps to ensure that retailers get access to new product information early on. This way, says Goggans, “they’re seeing the items at the same time that we do.”

Marketplace –  Each year, Grocery Supply Co. hosts an annual trade show in Arlington, Texas, for its retailer and vendor partners. The two-day event provides an opportunity for vendors to show off new products and allows time for retailers and vendors to get together for strategic planning. It also features a number of educational sessions, usually vendor-sponsored.  

Grocery Supply Co. is the nation’s fifth-largest convenience store distributor, and the company fittingly has assumed a leadership role in industry-promoting endeavors. Shing, a 29-year veteran of GSC, directs purchasing, program development, foodservice and government affairs for the corporation.

In January 2005, he will assume the role of chairman of the American Wholesale Marketers Association; he also currently serves as chairman of the Southern Association of Wholesale Distributors.

Over the course of the past year, GSC was a big supporter of AWMA’s multi-vendor-endcap program created to help bolster snack category performance. That association-led initiative developed an endcap featuring top-selling snack items from a series of vendors. Retailers were encouraged to place it in a prominent, front-of-the store position. Currently, 862 of the stores Grocery Supply Co. services are participating in the endcap program.  
“We’ve seen sales grow phenomenally on the items that were included,” says Goggans.

Shing has a descriptive term for such efforts—“coop-a-tition. It’s actually cooperating with the competition,” he says adding that he hopes to see vendors team up on more such joint ventures.

Asked how he’d like to see candy vendors improve, Howard Stroud has a ready answer: Develop an exit strategy for their products.

“We see a lot of new items, and they are undoubtedly a catalyst for category growth,” says Stroud. “But we don’t see enough concrete exit strategies for the product entries that do not succeed. If you’re a retailer, you have to look at [the issue of] what am I going to do with everything that is left sitting here.”

Vendors offer allowances, but these  “may or may not be sufficient” as a vehicle for dealing with unsold products, says Stroud.

He sees an excellent opportunity for manufacturers to get distributors involved. “Why not have an authorization for the distributor to pick up products or to have products returned to the distribution centers for credit?” he muses.

This is a critical issue, Stroud emphasizes, because if retailers are confident that vendors will be responsive when a product fails to perform as hoped, they’ll take on new lines more readily. And that is good news for everyone. n

One of Grocery Supply Co.’s most popular programs—with retailers and vendors alike—is the Retailer Incentive Sweepstakes.

In the program, vendors sponsor products they’re seeking to promote. By purchasing manufacturer-sponsored products, retailers qualify for chances to win a trip for two to the current year’s exotic travel location.

The way the program is structured—with drawings for three winners each week over the course of a 20-week period—allows both small, independent retailers and larger chains a good shot at winning, rather than rewarding customers strictly on the basis of total purchase volume.

"We do that differently than a lot of companies," says Howard Stroud, director of merchandising and purchasing. "It’s not based on total sales. It’s a sweepstakes so everybody gets a chance to win."

An added benefit is that the trip delivers a great opportunity for vendors and retailers to network in a relaxed setting. "That’s what is so good about it," says Pat Goggans, snacks/confections category manager. "Our vendors and Grocery Supply managers and our customers are all spending time together."
"It’s a great opportunity for all of our partners," Stroud agrees.

This year’s winners will be treated to an eight-day/seven-night Hawaiian Cruise aboard the Pride of Aloha cruise ship. Past destinations have included Austria, Alaska, Ireland, Switzerland, Acapulco, Cancun, Hong Kong, Rome and Rio de Janeiro, among others. 

Entry forms are included within the MarketPulse publication Grocery Suppply Co. uses to hype new products and may also be obtained from company sales representatives.

Ethics and decency aren’t merely lofty ideals at GSC Enterprises. They are at the core of how business gets done at this 57-year-old company.

On the day of Confectioner’s visit this fall, for example, President and COO Larry Kerns had just returned from visiting the company’s Pensacola, Fla., warehouse, which had sustained substantial damage from Hurricane Ivan.

Traveling there over the weekend in the immediate aftermath of the devastating hurricane was not particularly convenient, but Kerns felt that it was important to do so in order to get a first-hand look at conditions and to reassure employees in Pensacola that GSC was committed to rebuilding the warehouse.

Management at GSC is seriously committed to making the company a good place to work for its more than 1,000 employees.    

One of the ways the company pursues that objective is via its participation in Dallas-based Marketplace Ministries, an organization that provides GSC with chaplain service. Through the program, all employees who wish to do so may make use of the chaplain service for weddings, funerals and personal counseling.

The company hosts spiritually focused luncheons for employees once a month. "The idea is for our employees to get to know each other outside of the workplace setting," says Kerns. He notes that this allows members of the GSC team "to have a sense of the whole person, not just the employee and to understand one another’s issues, to have a sense of what they may be up against."

The Marketplace Ministries initiatives have been warmly received by GSC employees. About 23 percent to 24 percent of employees participate in them. The participation level in such programs is more typically in the 10 percent range, Kerns notes.

The programs are completely voluntary, Kerns stresses, noting that while offering such spiritual support services is a nice perk, it’s critical that employees do not feel pressure to participate.

Title: Snacks/Confections Category Manager
Family: Husband, Jim; two sons, Brandon, a Navy pilot, and Wes, an engineer; two granddaughters, Caroline and Bailey.
Academic Background: Majored in journalism at the University of Texas
The Fun Part of the Job: "The people. Watching a new item become successful."
The Challenging Part: "Keeping up with the paperwork. Dealing with the excess items."
Time-Saving Strategy: Using e-mail effectively
Outside Interests: Golf, scrapbooking
What She Might Be Doing Otherwise: Operating a scrapbooking store
Words to Live By: "Life is a journey. I want to appreciate every day."
Something She’s Always Wanted to Do: To own an airplane and learn to fly it