AFTER MERGER, ASMC GROWS DOMESTICALLY, ABROAD

WASHINGTON -- The Association of Sales & Marketing Companies here is evolving into a stronger entity -- not only through its merger with Grocery Manufacturers of America but also through efforts to expand globally.The merger with GMA took effect last Jan. 1, while the international pursuit is part of an ASMC initiative to meet the varying needs of specific operating segments within the food industry,

WASHINGTON -- The Association of Sales & Marketing Companies here is evolving into a stronger entity -- not only through its merger with Grocery Manufacturers of America but also through efforts to expand globally.

The merger with GMA took effect last Jan. 1, while the international pursuit is part of an ASMC initiative to meet the varying needs of specific operating segments within the food industry, Mark W. Baum, ASMC president and chief executive officer, told SN.

Baum, who is also executive vice president of GMA, spoke to SN on the eve of ASMC's annual executive conference, scheduled to begin Wednesday in Colorado Springs, Colo.

Under the merger agreement, ASMC operates as a freestanding subsidiary of GMA, with its individual identity intact, and the GMA and ASMC names survive, though that could change, Baum pointed out.

"There's no common name for the combined organization," he said, "though I suspect that at some time, as we constantly re-evaluate the mix of our programs and services, and our vision and identities, we will probably come up with a common name. As we reflect changes in the industry, and as the dynamics of the members and their scope changes, that will drive the process of finding a new name for the association."

According to Baum, the merger will improve the goals of both associations while ensuring that sales and marketing "get the credibility, visibility and respect of all trading partners."

For sales agents, Baum said, the post-merger environment provides greater access to decision-makers at the manufacturer level, creates new venues and expands existing venues for focusing on key industry needs. In addition, it creates opportunities for sales agents and manufacturers to speak with a single voice on issues of common concern and extends opportunities to deliver greater efficiencies and better business practices throughout the supply chain.

For manufacturers, the merger provides greater access to ASMC products and services and a closer working relationship between agencies and their manufacturer clients on topical issues, Baum said. "We're now under one roof, so it's a better working environment for dealing with go-to-market strategies; issues relating to outsourcing sales, marketing and merchandising services; and management issues such as organizational structure, contracts, conflicts, compensation, allocation and deployment of resources -- plus category management strategies, promotional strategies and administrative issues.

"And for retailers, there's more ease of mobility between agencies and manufacturer clients to address key issues that affect all trading partners -- including promotional development and implementation, as well as customer services and relationships -- instead of trying to formulate positions in a vacuum."

A Thursday morning conference session will feature Manly Molpus, GMA president, and Stephen Sanger, chairman and chief executive officer of General Mills -- who is also ASMC's board chairman -- talking about the merger's impact on the two associations and their members.

Baum said he believes ASMC's merger with GMA could pave the way for additional association consolidation.

"We believe we've created a new business model for associations that other groups might find palatable -- a model for servicing the food and consumer packaged goods industries built on a platform that enables us to develop synergies and efficiencies, reduce duplication, strengthen the customer base and maximize allocation of resources to the highest value services," Baum explained.

According to Baum, the combination of ASMC with GMA strengthens both associations and the services they offer.

"Both ASMC and GMA have nonfoods divisions, and between the two, we're each doing a fair job. But since nonfoods is still an underdeveloped category, the merger provides great opportunities for growth and the chance to expand our presence in that category," he said.

Both associations have also been involved with food service, Baum added, "with ASMC having a strong presence in that area and GMA beginning to approach opportunities through its support of the Joint Industry Efficient Foodservice Response project. So the merger gives us the opportunity to extend our influence through GMA and to create a food-service program that will serve us all well, particularly as the distinction between food service and grocery continues to blur."

The merger will also enable the two organizations to expand their global efforts -- particularly in the wake of ASMC's pre-merger move to create four operating divisions for national, international, food-service and independent members, Baum said.

ASMC split its operations into separate divisions, Baum explained, "because as the world changes, our members' needs have become more specialized, and by creating separate divisions, we are able to craft specific product services for each segment and give each one more control over its own product and service mix."

Following the merger earlier this year of the Canadian Food Brokers Association into ASMC, the ASMC now has agency members in 19 countries outside the United States, Baum said, "and as globalization continues to occur, we are well-positioned to take advantage of opportunities to bring products from outside the U.S. into the U.S. and to expand our agency representation into markets around the world."

GMA is also involved on the world stage, he added -- through its involvement with the Free Trade Agreement of the Americas, which covers the Western Hemisphere, and its involvement with trade and tariff issues in other parts of the world "that will create more opportunities for manufacturers and sales agents to extend their reach globally," Baum noted.

He said the merger also gives agencies and manufacturers the opportunity to take a more holistic view of trade-relation issues. "Typically, those issues are characterized as buyer-seller or manufacturer-distributor relationship issues whose critical components are promotions management, administrative management and category management, yet not all trading partners have always been part of the discussions.

"The merger makes it possible to take a broader view of those issues with all trading partners at the table to effect positive changes."

One example of ASMC's holistic approach is a study it commissioned in 1999, called "Getting It Right at Retail," Baum pointed out. A status report on the second phase of that study -- documenting the value of routine coverage -- is scheduled for presentation at this week's executive conference, with the completed study scheduled for release in the fall, he said.

The study is being conducted by Willard Bishop Consulting, Barrington, Ill. Phase 1, dealing with cost implementation, was presented at an ASMC meeting in 1999.

"The study is typical of our broad-based approach toward raising the industry's understanding of retail implementation," Baum said. "Instead of individual companies having to sort through a variety of tactical concerns, our study will enable them to take a broader approach to problem-solving by implementing programs and having a standard against which to measure their results that's designed to improve in-store conditions and create a better consumer shopping environment."

ASMC commissioned the study, he said, "because we've always done a large percentage of in-store work. But store execution is an industry problem that each trading partner has a vested interest in resolving because the shelf is the point at which consumers make their buying decisions, and that's the point where all our interests merge."

Asked about ongoing complaints by independent operators that they don't get much retail coverage from sales agents or manufacturers, Baum replied, "Independent retailers have a unique set of challenges in terms of in-store coverage because of the additional complexity resulting from their indirect relationship buying through a wholesaler, and that's part of the reason ASMC was a co-sponsor of the Food Distributors International study on in-store implementation.

"Sales agencies and other suppliers have always had a vested interest in supporting the independent community, and the fact they lament in-store coverage is not unique. But in-store conditions have deteriorated in all channels in recent years, and that's an ongoing problem because of the finite number of people available to provide coverage and the way the industry prioritizes that coverage.

"But if independents implement the recommendations of the FDI study -- by communicating better with their wholesalers and adopting in-store training programs, for example -- then they should see an improved coverage pattern in terms of speed-to-shelf, lower out-of-stocks and improvements in retail store conditions."