The global supermarket industry is turning its attention to Asia in expectations of unprecedented food-retailing growth in the near future.
International retailers are invading, local stores are improving their act and multinational suppliers are targeting brands for market share expansion.
Enter CIES: The Food Business Forum. The Paris-based international organization is lending support to the efforts of Asian operators through a string of activities, particularly on the logistics and efficiencies side. It will also highlight its commitment to Asia by holding its Annual Executive Congress in Singapore in June.
"In most cases, what can be considered supermarkets and hypermarkets haven't yet taken a big share of the food markets in Asia," said Etienne P. Laurent, president and chief executive officer of the Paris-based CIES. "So the potential for development in Asia is absolutely phenomenal."
The problem is that in many of the emerging economies of Asia the infrastructures aren't very developed and retailers aren't up to speed on logistics issues. CIES' Asian Steering Committee recognized the need to help Asian food executives cope with logistics and supply chain management issues. It created a group called the Asian Pacific Supply Chain Management Task Force, which is comprised of retailers, suppliers, consultants and other executives working in the region.
This group has identified a number of issues as the topics for regular meetings and exchanges of information. These include pallet standardization, electronic data interchange standards and the Asian scorecard. The group is also involved in planning the Supply Chain Management/ECR Conference set for Oct. 5 and 6 in Manila, the Philippines.
"CIES has a role to play on the regional level," Laurent said. "Retailers and manufacturers must get their logistics right first, then they can talk about further cooperation."
CIES has an established base in Asia. It has had a Tokyo office since 1989 and a Singapore outpost since 1995.
The latter office is used as a base for traveling roadshows, consisting of a series of conferences focusing on Efficient Consumer Response and supply-chain efficiencies. The program has already found its way to places including Manila; Bangkok, Thailand; and Jakarta, Indonesia.
Also emphasizing the importance of Asian retailing is CIES' incoming chairman, Feargal Quinn, managing director of Superquinn, Dublin, Ireland. Quinn will begin a two-year term next month, succeeding Paul-Louis Halley, president and CEO of Promodes, France.
Quinn noted that ECR has been working its way through many countries and parts of the world. The United States has seen major advances and Europe's efforts are gaining momentum because "there is greater opportunity than in America," Quinn said. But if the benefits are potentially big in Western Europe, they are much greater in areas under development, such as Central and Eastern Europe, Quinn said.
In parts of Asia the potential for initiatives like ECR is virtually unlimited, Quinn stressed. He pointed to the possibilities in a country like Vietnam, where the lack of an existing efficient infrastructure provides fertile ground for ECR advances.
Quinn said it is fitting that CIES has picked Asia for its annual congress this year. It will take place June 4 to 6 in Singapore at the Westin Stamford and Westin Plaza.
"Just look at what the global retailers are doing in Asia; there are very few who are not moving in," Quinn said, noting that CIES' event in Singapore will help the organization focus on the Asian and worldwide retailers in the region.
The congress will feature presentations by three major global retailers active in Asia. The three discussing their "visions" include Gerard Clerc, managing director for Asia at Carrefour, Hong Kong; Ron Floto, group executive officer of the Dairy Farm Group, Hong Kong; and Eddie Moerk, member of the corporate executive board of Ahold, Zaandam, Netherlands.
The three executives will also lead a panel discussion titled, "What Can We Learn From Each Other?" Joining the panel will be Chandra Das, chairman of NTUC FairPrice Co-operative Ltd., Singapore; Steve Sondakh, board member at Hero Group, and president of Aprindo, the Indonesian Retailers Association; and Francis Teng, director of Giant Hypermarket in Malaysia.
Asia isn't the only place affected by the globalization of food retailing. This worldwide phenomenon is creating a new round of supply-chain challenges with no easy solutions, according to Quinn. He said the rapid expansion of global operators and heightened concerns about the environment and food safety represent a formula for a potential crisis of confidence in the supply chain.
"Confidence in the supply chain is probably top of the agenda for me," he said. "It's not just confidence about health, but also about paying a fair price -- about getting from suppliers a product at the right price and value."
It's an issue, said Quinn, that has reverberations for supplier/retailer relations, food safety and having a product that the consumer wants, which is harder to gauge when the product and the retailer may be imported from another part of the world.
"The issue is confidence by the consumer in both the person from whom they are buying and the product they are buying," Quinn said.
These issues have been accelerated by the new trade legislation landscape, Quinn stressed. "The North American Free Trade Agreement is leading to the removal of trade barriers in North America," he said. "The European Union is expanding perhaps to 20 countries in the next few years. Barriers are being removed. You can live in Portugal or Ireland and buy products from Poland or Sweden. The General Agreement on Tariffs and Trade will make American and European products interchangeable."
Quinn hopes CIES will be able to help global supply-chain partners find their way through the confusion. "A global organization like CIES has a real task in that area," he said.
In particular, the mixing of suppliers and retailers on CIES committees is expected to help identify trends and solutions for supply-chain developments, Quinn said.
CIES' worldwide efforts include its membership base in North and Central America. Jonathan Berger, regional manager for those areas, said the organization creates programming in the United States and attempts to promote member participation in CIES' programs in other regions.
CIES will hold a Global Logistics Conference in conjunction with the Food Marketing Institute June 18 and 19 in Boston. The theme is "European and North American Supply Chains -- Understanding and Exploiting the Benefits of Both."
New members are being enlisted in North and Central America. Berger cited the case of Guatemalan-based retailer La Fragua, which is the largest retailer in Central America. Its portfolio of formats includes hypermarkets, hard discount stores and traditional supermarkets. It also operates in Honduras, El Salvador and Nicaragua.
"It's a very sophisticated operation," Berger said, "which says a lot about the internationalization of the supermarket business."
CIES continues to reach out to younger executives with a successful program that targets future corporate leaders, Berger noted. The "Annual Congress of the Management Development Program" will be held Nov. 15 to 18 in Amsterdam, Netherlands. The event attracts executives under the age of 36 for an "MBA-style executive event," Berger said. These participants tour stores in the local market, analyzing the competitive scene and debating retailer strategies.
Quinn said these young leaders are often quite perceptive about the failings of the stores they visit, providing useful, albeit humbling, criticisms and suggestions for operators.
As Quinn prepares to take the chairman's position, he said CIES will continue its focus on major themes including information technology, the environment, logistics and marketing. The 16-unit Superquinn has been known for its marketing prowess, and Feargal's son, Eamonn, is the store's marketing director and also chairs CIES' marketing committee. CIES will hold its second Joint Conference on Marketing and Information Technology Oct. 1 and 2 in Geneva. The theme is: "Consumer Marketing in the Information Age."