We're all in this together.
That was a core theme at last month's American Bakers Association convention in Boca Raton, Fla. Speakers emphasized the need for the industry to pull together to address common challenges.
The most visual example came when Robb MacKie, ABA president and C.E.O., called a large number of baking industry association leaders to the stage to stand alongside each other, underscoring how closely the groups are working together to maximize resources.
The need to work together also was relayed in a keynote by Todd Jones, president of supermarket chain Publix, Lakeland, Fla., who asked bakers to work closely with the retailer.
“Let's talk about what we can do to collaborate and grow our businesses together,” he said.
Other speakers commented on the plethora of challenges facing the industry, including those on the government regulatory front.
“I've never seen so many threats regarding how you market your products,” said Jim Davidson, chair of public policy group Polsinelli Shughart PC, citing dietary and nutrition guidelines.
The topic of government and how it works — or doesn't work — was a recurring subject throughout the event.
Jeb Bush, former governor of Florida, criticized “massive government waste and fraud.” He proposed a plan that included fiscal, tax and educational reform.
“We need to blow up the budget conventions of Washington and replace them with kitchen table economics that require people to live within their means,” he asserted.
In a separate address, Tom Donohue, president and C.E.O. of the U.S. Chamber of Commerce, urged widespread adoption of changes that will help promote long-term growth. These include a national energy strategy, bolstering capital markets and pursuing market-based health care reform. He also thanked the association for supporting the Chamber's efforts to drive market-based solutions to many of the nation's problems.
Convention attendees took an action-oriented approach to challenges by making a record contribution to the association's political action committee. More than $118,000 was raised during the annual American Bakers PAC Dinner, which helps fund pro-baking industry candidates for federal office who support the free enterprise system. The dinner included presentations by Bill Kristol, Fox News commentator and editor of The Weekly Standard, and Eugene Robinson, Washington Post columnist and MSNBC News political analyst.
While the ABA convention emphasized the need to collaborate, it also left bakers with a sense of opportunities ahead.
One speaker, Ellen Koteff, former editor-in-chief of Nation's Restaurant News, said consumers appear to be re-embracing restaurants, which provides opportunities for the baking foodservice sector. “Consumer confidence is rising,” she said. “There's a steady increase in sales for breakfast, mostly taken to-go.”
She noted that the National Restaurant Association is advising foodservice outlets to focus on initiatives including social media, marketing via e-mail, healthy choices and green programs.
Also outlining opportunities was Sylvia Klinger, founder of Hispanic Food Communications. She urged the grain industry to focus on consumer concerns that include obesity, sodium content and vitamin D deficiencies.
“Vitamin D is a hot topic, and there are a lot of deficiencies, especially among Hispanics,” she said.
The convention also was marked by a leadership transition in the rank of chairman. The gavel was passed from Chip Klosterman, president, Klosterman Baking Co., Cincinnati, to Allen Shiver, president, Flowers Foods, Thomasville, Ga.
Publix urges suppliers to partner
Publix Super Markets is reaching out to wholesale bakers for help with challenges in areas ranging from supply chain to sustainability.
The chain’s president, Todd Jones, urged closer collaboration on issues such as out-of-stocks, new-item introductions, recycling and food safety–all with the ultimate goal of enhancing the chain’s already strong customer service.
“We’re in business from a stockholder’s point of view to grow sales and profits,” Jones said at the American Bakers Association Convention in Boca Raton, Fla. last month. “But how do you make that happen? For us, it’s by maximizing customer satisfaction. Let’s collaborate to grow our businesses together.”
One of the key hurdles the Lakeland, Fla.-based retail chain faces is staying in stock during high-traffic periods, he said.
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“If we truly want to collaborate for success, we have to realize that Saturdays and Sundays and nights are a big part of our business,” he told the audience. “Sunday is our busiest day of the week; it’s 19 percent of our business. And we do more business from 4 p.m. to 7 p.m. Monday to Friday than we do from 11 a.m. to 4 p.m. during the day.”
Jones showed a photo of a recent out-of-stock situation on a Sunday in an Atlanta Publix unit, pointing out that customers were disappointed on two counts. “Not only did we not provide customers with the inventory, we disappointed them on ad items, for which we said we’d provide a discount.”
He cited a partnership with Frito-Lay as an example of a joint program to help solve such challenges by improving delivery schedules.
“Let’s talk about what we can do to collaborate and grow our businesses together,” he urged suppliers.
Publix has been successful in employing automated replenishment to help address the challenge and continues to build on that initiative. The retailer has completed five years of using automated replenishment and has it in place for all products the chain distributes on its own.
“We’ve now partnered with three DSD companies–Coca-Cola, Nabisco and Tree of Life–and we’re forecasting and replenishing their inventory needs in about 12 stores.”
That arrangement has improved in-stock service levels for those items from 94.5 percent to 98 percent in six months, he said. Publix shares data with the suppliers and tracks measures including inventory positions and forecast demand.
“We may ask you to consider partnering with us,” he told bakers at the convention.
Publix also faces the challenge of managing its total SKU counts, a growing problem as the 1,011-unit operator attempts to fill in markets with smaller store footprints.
“We have about 34,000 unique items in our stores,” he said. “Last year we were offered 11,000 new items. That’s impossible for us to handle; we’d have to displace 11,000 items in order to add these. So on new items, ask yourself, ‘Will it grow the category? Can I pull out something else to make room?’”
Bakers also were asked to help Publix build on its success with recycling. “Last year we were able to recycle 42 percent of our inventory that can be recycled,” he said. “But we’re not satisfied. We want to get to 65 to 70 percent.”
To accomplish that, he said, “We’re looking for partners to be able to do the recycling with. You’d be surprised at how much your people want to recycle–they think it’s wonderful to do this.”
Turning to the topic of food safety, Jones said there’s a lot of room for suppliers to help the chain’s efforts.
“All of us [retailers] need to educate our associates on the proper ways to handle products,” he said. “We get checked four times a year by the state, and we have a company to check us four other times a year in every store to ensure we’re handling food safety as an area of utmost importance.”
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