RESTON, Va. -- The National Food Brokers Association here is about to change its name to the Association of Sales and Marketing Cos.
According to Bob Schwarze, president of the association, the change is similar to a re-engineering effort under Efficient Consumer Response to redefine the role of the broker community today.
"Many of our member companies are moving more and more into the area of retail merchandising, which is not a traditional broker activity," Schwarze explained. "The way we operate today, we are hired by the manufacturer to perform specific tasks at retail -- such as making sure product is on the shelf, resetting sections and building displays -- without any headquarters responsibilities.
"And as we move forward into more of those areas, the term 'sales and marketing association' will give us a broader umbrella to operate under as variations continue to develop in the types of principals we represent, the chains of distribution we service and the customers we call on for our principals."
The NFBA has been working toward changing its name for several years, Schwarze said, "to make our name more accurately reflect what our members represent -- a group of very sophisticated sales and marketing organizations. It's almost as if the association is adopting ECR and re-engineering itself."
Schwarze spoke to SN on the eve of the NFBA's annual convention, scheduled for Dec. 6 to 9 in Chicago. He said the association's new name will be formally unveiled during the meeting and become effective Jan. 1.
During his talk with SN, Schwarze also made the following points:
Besides renaming itself, the NFBA is redefining the convention by calling it a "business forum" -- to reflect the shift away from general sessions and workshops in favor of more one-on-one meetings between brokers and their principals.
The meeting's agenda will reflect the significant role brokers can play in the areas of home meal replacement and category management.
Although the number of broker companies continues to shrink, plenty of business opportunities still exist.
According to Schwarze, the association opted to change its name "because the name 'National Food Brokers Association' no longer accurately describes our members' role in the food industry.
"The name says we are national, but 10% of our members are international. And although our members do handle food, we have members representing principals in every category in the store, not just food. And the word 'broker' has the connotation of a middleman, which we don't consider ourselves," he explained.
"In fact, many of our members no longer call themselves brokers. Depending on what they do, they prefer to call themselves business managers, account executives or agents, as well as brokers. And while we don't expect the term 'broker' to disappear, we think that, over time, that name will apply to us less and less."
Schwarze acknowledged that some NFBA members were concerned about losing the broker identity. "But when I would ask them why so many of them had taken the term 'food broker' out of their corporate name, they told me that was different," he said with a laugh. "However, at this point, many members are very much in favor of the change because they recognize the importance of truly reflecting what we do to the rest of the industry."
The association will use the new name, Schwarze said, "as a communications vehicle to help educate the industry, especially at the most senior level of manufacturing and retailing, about what our members do and the value-added services we perform."
Like the National-American Wholesale Grocers Association, which changed its name earlier this year to Food Distributors International, the NFBA intends to incorporate the old name with the new one for a while, Schwarze said.
He added, "And we'll also probably continue to use the word 'broker' to describe ourselves, though we may move toward use of the term 'sales and marketing agent' over time."
This year's convention was renamed a business forum, Schwarze said, based on internal research "that indicated that members and principals really want to get down to business at our annual meeting. They want to use the time to come together and discuss business issues rather than attending cocktail parties, workshops or general sessions."
The changes resulting from the new format include the following, according to Schwarze:
Instead of two general sessions on the Saturday and Sunday of the convention, there will be a single general session on Saturday, Dec. 7, that will last about 30 minutes longer than the meeting lasted in previous years.
Instead of 18 workshops spread over three days, this year's event will have only nine workshops, all scheduled for the afternoon of Friday, Dec. 6.
The time devoted to the NFBA Expo -- at which smaller manufacturers seek broker representation, and software and hardware vendors display new technologies -- will be cut back by one to two hours a day on Friday, Saturday and Sunday.
Schwarze said the time eliminated from formal convention activities will enable brokers and principals to get together for pre-arranged meetings with each other.
In response to an SN question, Schwarze said the association has been a little disappointed "that the new format hasn't generated as much interest as we had hoped among principals who have not historically attended the convention in the past. We were hoping to see more."
During the meeting's single general session, brokers will hear a slightly amended presentation of Meal Solutions 2005, a research project conducted by McKinsey & Co., New York.
Although the study was originally unveiled at the NFBA's executive conference in mid-September, Schwarze said McKinsey has supplemented its original research by conducting subsequent interviews with several brokers to add their input to the study especially for the broker meeting.
He said the NFBA recognized the growing trend toward home meal replacement at supermarkets two years ago when it formed the International Foodservice Brokers Association -- a stand-alone trade association reflecting the fact that more than one-third of NFBA members serve the food service as well as the supermarket trade.
One of the IFBA's major accomplishments, Schwarze noted, is the leadership role food brokers have taken in the formation of Efficient Foodservice Response, the food-service industry's equivalent of ECR. "Without IFBA, we wouldn't have even been at the EFR table," he said. "But because of our experience with ECR, we feel we have played a very significant role in the EFR initiative."
Food brokers are also playing a significant role in the development of category management, Schwarze pointed out. "A recent study into whether or not brokers had any role in category management concluded that brokers should be involved in 75% of all CM activities," he said.
The study was conducted by the Partnering Group as part of the industry's Joint ECR Initiative on Best Practices for Category Management. The results were described at the NFBA's executive meeting in August and will be discussed again during a workshop session at the Chicago meeting.
According to Schwarze, the study noted that brokers have a competitive advantage over direct sales organizations in a given marketplace.
During the SN interview, Schwarze expressed concern about the dwindling number of broker organizations resulting from ongoing industry consolidation. He noted that the NFBA's membership of 2,500 companies six years ago had shrunk to 1,200 last year and is down to "a little more than 1,000 companies" this year.
"It's a trend that parallels the consolidation of retailers and manufacturers, and only time will tell if the consolidation can go too far," he said.
While earlier consolidations involved small- and medium-sized companies merging with each other or with larger brokers, there have been more large companies merging with each other to create larger sales and marketing organizations, Schwarze noted.
"But the business has not disappeared," he said. "In fact, more business has come to the broker community as more principals have seen the value brokers can provide and realized that we are the most cost-effective, cost-efficient way to come to market and that our best full-service members are more sophisticated than 90% of the principals we represent."