U.S. Groups Tepid on Proposal

Several U.S.-based trade associations said they are taking a wait-and-see attitude on the potential of a proposed new industry association that, if formed, would seek to suggest standards and best practices for the industry globally. However, the top executive of the National Grocers Association told SN he has some questions about whether a new organization is needed to address industry collaboration

Several U.S.-based trade associations said they are taking a wait-and-see attitude on the potential of a proposed new industry association that, if formed, would seek to suggest standards and best practices for the industry globally.

However, the top executive of the National Grocers Association told SN he has some questions about whether a new organization is needed to address industry collaboration and efficiency.

“Greater efficiencies, reduced duplications, greater collaboration and universal standards are industry buzzwords that were discussed and pursued as part of the Efficient Consumer Response effort of the mid-1990s,” Thomas K. Zaucha, NGA president and chief executive officer, said in an interview. “So the question is, do we need to create a new organization to achieve those goals?”

The new association, whose formation is still under discussion, would be created from a combination of three industry groups: CIES, the Paris-based global food network; the Global Commerce Initiative, an international group of retailers and manufacturers headquartered in Cologne, Germany, that drives implementation of standards and best practices; and the Global CEO Forum, an informal group of top industry executives.

If the new organization is created, it is expected to advocate more effective and efficient global trade practices by sharing its ideas with industry groups all over the world, an industry source told SN. “It will not be an effort to tell other associations what to do, but an attempt to find ways where it makes sense for the industry to deliver better results using the guidance principles of the new entity,” he explained.

Sabine Ritter, general manager of the Global Commerce Initiative, said the group's executive board gave the proposed organization “a strong vote of confidence” at a meeting last month.

“It's very likely the scope of this new body will include the current activities of GCI, but as discussions are ongoing, it is too early to give a definite answer.”

The CIES board is scheduled to consider the new organization later this month. A vote of the Global CEO Forum would probably follow, sources told SN.

CIES is also scheduled to vote on whether to broaden its board membership beyond retail to include directors from six international manufacturing companies, three of which are U.S.-based (Coca-Cola, Procter & Gamble and Unilever) and three of which are based in Europe (Danone, L'Oréal and Nestlé).

Alan McClay, CEO of CIES, told SN his association is encouraged by the dialogue so far.


“In this increasingly globalized world, where consumers expect clear responses to major universal issues such as nutrition, health, social responsibility and ethical sourcing, the need for concrete, consistent and common positions from manufacturers and retailers is imperative,” he said.

Representatives of several U.S.-based trade associations told SN they support the idea of enhancing industry efficiencies, though they want to see how the new organization will function before passing final judgment.

Zaucha said NGA plans to discuss the proposed association at its board of directors meeting in mid-June.

Steve Anderson, president and CEO of the National Association of Chain Drug Stores, also said he anticipates participating in discussions with the new entity.

His association is aware of the ongoing discussions, Anderson told SN, “but there are operational and procedural issues that will need further discussion.”

A spokesman for the National Association of Convenience Stores applauded the effort, saying, “The more groups that can facilitate exchanges of best practices, the better it will be for everyone.”

Cal Dooley, president and CEO of the Grocery Manufacturers Association, said GMA has not formally endorsed the pending consolidation.

“At this point GMA is very concerned that the role of any new entity be limited to supply chain and industry affairs. We think public policy and advocacy should not be part of the new group's mission.”

Sources told SN the proposed group would not be concerned with public policy or advocacy.

According to Dooley, “The GMA board supports the concept of greater efficiency that would result from the consolidation of [the three groups].”

Food Marketing Institute declined to comment.