NEW GUIDANCE

Jeff Noddle is stepping into a pivotal industry leadership role this month at a time when many supermarket executives are consumed by challenges.Yet try as you might, you won't get Noddle to express anxiety about competition, consolidation or consumer fickleness.The chairman, president and chief executive officer of Minneapolis-based Supervalu will bring a unique combination of realism and optimism

Jeff Noddle is stepping into a pivotal industry leadership role this month at a time when many supermarket executives are consumed by challenges.

Yet try as you might, you won't get Noddle to express anxiety about competition, consolidation or consumer fickleness.

The chairman, president and chief executive officer of Minneapolis-based Supervalu will bring a unique combination of realism and optimism to his new role of Food Marketing Institute board chair, a two-year elected post.

"This industry has a constant drumbeat of innovation," he observed during an SN interview on the eve of the FMI annual convention in Chicago, where his role will begin. "Some companies concentrate on supply chain. Some on front-end service. Some are identifying key trends in health, nutrition and natural/organic. Everyone is picking different places to put their emphasis. Many have predicted supermarkets are to be in decline. I haven't seen it. I've just seen constant evolution."

Noddle becomes the 19th board chair in FMI's history. His predecessors include former Supervalu top executives Jack Crocker and Mike Wright. He succeeds Liz Minyard of Minyard Food Stores, the outgoing board chair.

Noddle sees positive forces at work as the industry rationalizes retail and wholesale assets. More companies have been transferring assets lately, sometimes due to instability on the part of sellers. However, Noddle believes this process signals a healthy development.

"I don't think we've seen as much consolidation as rationalization," he said. "In many markets, there is an adequate amount of supermarket square footage, so you have rationalization of assets. If one company goes through rationalization or liquidation, other companies pick up those assets and make them more efficient. This is a necessary process."

Noddle's upbeat outlook isn't devoid of realism. He knows that many food retailers are struggling under the weight of changing dynamics. However, he is able to see a bigger picture than most because of the wide scope of business that Supervalu pursues. He interacts with independents, chains and alternative formats in activities ranging from wholesaling to retailing to third-party logistics. So it's not surprising that Noddle's assessment of the industry's health is based on this wider perspective.

"Based on financial reports of companies, you'd have to say it's been more difficult recently than in the past," he began. "The Southern California strike had a big impact, and many chains are going through difficult times. But if you look at the food-at-home business as a $500 billion to $600 billion business, within that space there are plenty of winners and losers. In any particular market, some retailers are challenged and others are successful."

Noddle plans to be an FMI chair who relates to all of those companies. He hopes to make a special mark on the independent sector he knows so well. Yet he emphasized that FMI's role is to focus on improving the competitiveness of food retailers as a whole, rather than getting lost in the individual competitive battles taking place among companies and retail channels.

"Most nontraditional retailers are members of FMI, too," he said. "The role of FMI is to say, 'What can we do to enhance the ability of the entire industry to serve the needs of its customers?' FMI must stay in front of new ideas and help identify where consumers are going."

Noddle cited an FMI member needs survey conducted in the recent past that identified a large variety of needs by segment of the industry.

"There are even sub-segments within each segment," he said. "For instance, in the independent segment you have large independent regional chains and smaller independents. We also have international members with different needs from the rest. We want to ensure FMI represents all members of its family. There will be more customization in meeting members' needs than in the past. Specialization is more important in food retailing."

As FMI revises how it meets member needs, it will also update its long-term financial structure, Noddle said. This includes examining revenue-generating activities like dues, conventions and new growth avenues. However, he emphasized that member needs won't be compromised.

"We must begin with the needs of the members," he said. "That must be the basis for decisions about finance."

Members will also benefit from continued efforts to improve collaboration among trading partners, Noddle said. He will make this an important goal of his FMI chair tenure.

"There is an opportunity to bring leadership in supply chain collaboration, to foster an efficient supply chain," he said. "I hope collaboration between FMI and the Grocery Manufacturers of America will be enhanced in this area. This would include unsalables, backhaul needs and data synchronization."

Noddle said the industry relations committees of FMI and GMA will be pivotal in making progress on a range of initiatives over the next two years.

Another topic for attention during Noddle's tenure will be the rising fees that banks and credit card companies charge for point-of-sale, debit and credit card transactions. Last month, FMI pointed to a 36% increase in the interchange fee for supermarket shoppers that use the Visa signature credit card and a 9% hike for shoppers that use any MasterCard credit card.

"This is a very important issue," Noddle said. "There are a lot of inefficiencies and cost barriers. FMI needs to bring pressure to help bring about a more open, efficient and cost-justified system. The key is what's being charged for credit and debit cards and the interchange fees -- all hidden from consumers' view. High costs are a growing problem."

Noddle knows that cost increases hurt the industry's ability to serve consumers competitively. He also knows the industry looks to FMI to stay abreast of consumer trends.

"FMI's role is to stay in front of new ideas and help identify where consumers are going," he said. "FMI does a good job. There is a big focus on consumer trends at this year's convention. The industry in aggregate is serving consumer needs."

Noddle's Long Resume of Industry Service

Jeff Noddle's new role as Food Marketing Institute board chair follows years of service to Supervalu and the industry.

The chairman, president and chief executive officer of Supervalu, Minneapolis, began his career in a retail role with Supermarkets Interstate, a unit of J.C. Penney Co. He joined Supervalu in 1976 in a retail director capacity. He was promoted over many years to top positions throughout the Supervalu organization. In 2000, Noddle became president and chief operating officer. In 2001, he added the title of CEO. Noddle was elected Supervalu chairman of the board in 2002.

Noddle has long been active in industry associations and other organizations through committee and board roles. In addition to his many years of FMI service, he has been involved with organizations including IGA; The Food Industry Center of the University of Minnesota; the Academy of Food Marketing at Saint Joseph's University in Pennsylvania; and the Sarah W. Stedman Center for Nutritional Studies at the Duke University Medical Center.

Noddle earned a bachelor's degree in business administration from the University of Iowa in 1969 and completed the Wharton School Executive Advanced Management Program in 1990.

FMI's Officer Class of 2005

Supervalu's Jeff Noddle will be supported in his two-year Food Marketing Institute board chair role by a new group of officers. Following is the new team:

Vice chair, industry relations: William E. Crenshaw, Publix Super Markets

Vice chair, member services: Bill McEwan, Sobeys

Vice chair, public affairs: Russell T. Lund 3d, Lund Food Holdings

Vice chair, finance: Pierre-Olivier Beckers, Delhaize Group

Immediate past chair: Liz Minyard, Minyard Food Stores