WASHINGTON -- The current agenda being pursued by the Grocery Manufacturers of America is centered on bringing manufacturers and retailers together to find common solutions to industry problems, according to C. Manly Molpus, president and chief executive officer of the trade association.
Molpus was interviewed here by SN prior to GMA's annual Executive Conference now convened at the Greenbrier resort, White Sulphur Springs, W.Va. The event runs through today.
"Growth is the major challenge facing the industry now," Molpus said. "That means achieving top-line growth and profitability. Right now, GMA is putting an emphasis on new technology that will allow the industry to become more efficient, to be better marketers, and to have the right products in the right place at the right time [to foster growth].
"At the same time, we can't forget about the basic issues we need to work on that have been around for a while. There's unsaleables. We still have cost of damage goods that's far too high, we still have more out-of-stocks than we should, and we have opportunities to reduce inventories.
"What we do with technology will help move us forward on a number of these issues. We need to work together to understand consumer needs and consumer values. We need to learn how to share information better between manufacturers and retailers. Between us, we have an extraordinary amount of information about consumers that will enable us to serve consumers with the right kind of products. We need to continue to work on the most effective way to share that information to drive consumer satisfaction and growth of the business."
Specifically, Molpus said, GMA's 2004 agenda calls for action on a number of fronts, most involving technology and trade. "One of the key factors of the success of GMA this year is that we have a new focus and intensity about executing our highest priorities. It's easy for an organization as broad in scope as is GMA to get off track, but we have set key objectives that are the highest priority needs and that are the most relevant to the industry today."
Here's a rundown of several of those initiatives:
GLOBAL TECHNOLOGY INITIATIVE: "We need to build infrastructure so the industry can take advantage of technology," Molpus said. "If we build the global registry to give common standards and to allow companies to get into synchronization for RFID/EPC [radio frequency identification/electronic product code], companies can decide how many trucks they want to put on that highway, how sophisticated they want to be. There's a tremendous opportunity for GMA and other trade organizations to make sure we are all collaborating on these common technology initiatives."
Asked what could throw such technology off track, Molpus said, "We must deal with the privacy issue vis-a-vis RFID and protect that technology, or it could get off track significantly."
GLOBAL SUPPLY CHAIN EFFICIENCIES: "Our plan is to bring together some of our senior supply chain executives [at an unspecified time]," Molpus said. "Most companies now have designated a senior executive to look at their overall supply chain issues. We want to bring those people together to have a brainstorming session and to look at what's next on our agenda. We've picked the low-hanging fruit. What should we be looking at now? What's the next generation of projects we should take on?"
Asked what could result, Molpus said that remains to be determined. "Right now, the focus is on technological change. Most of our resources are in technology. Now we need to look in the crystal ball to see what is beyond that. There can be a lot of benefit in continuing dialogue in many areas."
INTERNATIONAL TRADE: "The opportunity the free trade agreement puts in front of us is significant," Molpus said. "The biggest obstacle we have is exceptionally high tariffs, all over the world. Tariffs aren't just with the United States and nations we're trading with. Ultimately, we need to get the World Trade Organization back up and running.
"We can benefit enormously in our industry as we try to move to a global marketplace. The average tariff on food products is around 60%. A lot of that is driven by the fact that in every country there are very tough political issues to deal with.
"The food industry has tremendous opportunity in a global marketplace. We need a new global trading system for food and agriculture that knocks down or lowers tariffs and deals with exports."
MULTI-CHANNEL RETAILING: "We are broadening our working relationships into a multi-channel proposition," Molpus said. "For instance, we have added the National Association of Chain Drug Stores and the Consumer Healthcare Products Association to the unsaleables conference. This is recognition that there's a very big marketplace out there. There has been a huge amount of channel blurring."
The 2004 Joint Industry Unsaleables Management Conference, which has long included the Food Marketing Institute, is to be July 20 to 22, Miami Beach, Fla.
Asked if GMA's new recognition of the long-fomenting phenomenon of channel blurring stood the chance of alienating supermarket retailers, Molpus said, "We have a longstanding and close relationship with the supermarket channel. It remains the key channel for many, if not most, of our members.
"The supermarket channel is critical to us. Our work with other channels is not in any way to dilute our partnership with the supermarket channel. Indeed, some of our work with the other channels is an expansion of the joint work we have done in the past with FMI and the supermarket channel. Together, we're bringing in more channels so we can build critical mass around some of our needed problem solving."
PUBLIC POLICY ISSUES: "Of the public policy issues, the one that's the most challenging and complex is the obesity issue," Molpus said, "There is now a host of new products out there that meet consumer interests. The industry is doing very well on this issue."
