Phil Lempert (Supermarket Guru) and David Orgel (Supermarket News) conducted a series of video interviews of CEOs at this year's GMA Executive Conference on what's next in the industry
At this week's Grocery Manufacturers Association Executive Conference, the Total Access video series hosted by Supermarket News Editor, David Orgel, and Supermarket Guru, Phil Lempert, look behind the scenes and talk with the newsmakers in the food world about what's going to happen next and the impact it will have on consumers. Here's what some of these CEOs had to say.
Chief Executive Officer, ConAgra Foods
Phil Lempert: You're the guy that is really setting the direction. What is that direction?
Gary Rodkin: I think it's important to be really candid. We are all really struggling for growth. I think you know that. We need to find a bit of magic. We need to change the tenor of our industry. For too long, we've been back on our heels a bit, and we've turned into a bit more commoditization than I would like to see. I would like to see us continue to work on the productivity side to drive costs down, but to take that fuel and reinvest it in innovation and marketing, so we can capture a little bit more interest from the consumer and make us a bit more exciting both from an employee standpoint as well as a consumer/shopper standpoint and then get that sustainable, profitable growth back that we're talking about.
Phil Lempert: So what I'm hearing from you is branding, branding, branding. Do we really need a little bit more effort on the whole branding side?
Gary Rodkin: I think we absolutely do. It's all about these equities. We've got great partners on the retail side. We've got great brands, and we need to take more advantage of that. We are in people's every day lives multiple times a day. We are important and very relevant. Yet, we allow ourselves to get pushed back a little in terms of interest. When you think about what people are talking about, where the buzz is whether it's telecommunications, the next new device that's coming out...maybe it's that pair of shoes that the woman needs for the next party, the food side doesn't get that general level of excitement like we used too. We need to grab that back.
David Orgel: And another area of focus for you and GMA is product safety. It's been six months since passage of the Food Safety Modernization Act. What do you see in terms of an update and where things are going there?
Gary Rodkin: Food safety is number one. There is nothing that is more important than that. I think we have elevated it to the appropriate position. Within GMA, we clearly have made it a top priority. We are working with the regulators, and we feel very good about that by putting more resources against it. We just have to be able to deliver safe, consistent food to the American consumer, and I will tell you it is the safest, the best quality food this industry has ever delivered before. We've used technology. We've got our rapid recall systems in place. There's more news on recalls. There's no question about that, but that's because the technology has enabled us to really zero in and pinpoint from say, an epidemiological study standpoint. The data is so much better that we need to understand what we are going to do to capture that information. Be very proactive, work with the regulators and ensure that we are very, very reliable. We are safer and better and more prioritized than ever before in the industry on both sides.
Chairman and Chief Executive Officer, The Kroger Co.
Phil Lempert: Your sustainability report on Kroger just came out. Some eye opening facts came out that you're really leading the pack when it comes to sustainability. Tell us some of things that The Kroger Co. is doing.
David Dillon: The report did just came out, and it's available online. The two things I am most proud of are that we've reduced the energy consumption in our stores over the last 10 years by 30 percent. Not three percent, 30 percent, and that's huge. Our associates absolutely love it, and our customers do too. The second thing I'm most proud of, a totally different area, is reducing the amount of food waste in the stores by finding a home for perishable foods that can be donated then to the food banks. There's always been a channel of distribution that didn't work to get food to those folks. We're able now to reduce the waste in our stores as a result.
Phil Lempert: So when you look at sustainability, consumers win, Kroger wins, and the associates win. Is this a model that other retailers should be replicating?
David Dillon: Actually I think many other retailers are. There's lots of different ways to plan that out. I'm not sure many have reached the 30 percent reduction on energy usage in the store, but generally speaking, I'm seeing retailers everywhere try to harness the opportunities to reduce waste in stores and to be a more sustainable contributor to society. I think that's actually a good thing, because we can trade off good ideas. I see my competitor do well, and it makes me want to aspire do even better.
David Orgel: You've had some impressive gains so far. Where do you see yourself down the line in the near term on sustainability?
David Dillon: There's a long way to go still. It's not unlike mountain climbing. When you get to the top of the peak, you look around, and you say there's another peak out there that I hadn't recognized. It looks to me like just the things we've learned and the example of the 30% energy we've reduced, which we are really proud of, show the more I look the more I think the opportunity is out there even further. So we are expanding into other areas with the channel of distribution of products coming to us, how do we reduce working with our vendors, how do we reduce the amount of trucks that are required to get the goods to market as an example, and packaging, how do we redesign our packaging or the packaging that comes into our stores in ways that are more sustainable
Chairman and CEO, The Clorox Co.
Co-chair of GMA-FMI Trading Partner Alliance
Chairman and CEO, Schnuck Markets
David Orgel: Can you tell us a little bit about the mission of The Trading Partner Alliance and what some of the accomplishments have been in the last three years?
Scott Schnuck: The Trading Partner Alliance is an organization made up of the executive committees from the Food Marketing Institute and the Grocery Manufacturers Association. We are beginning its third year of existence, and it came out of a desire by both industry associations and industry principles that the industry needed to collaborate in ways better to either cut costs out of the system or be united on government affairs, and that it was a way to step up the level of participation, if you will, from the CEO level to the lower level executive of each organization. Don and I are the co-chairmen of the organization. We had a lot of victories over the first two years. The biggest one was the front of package labeling initiative that was a voluntary initiative by both GMA and FMI that the whole industry has embraced and volunteered to put front of package labeling on packages that is going to communicate consumer nutritional information.
David Orgel: Don, what do you see ahead in the next year or so?
Don Knauss: One of things we've learned is that when we collaborate, we are a lot smarter together than we are separate. When we bring together these two sectors of the industry, we get really great progress. The TPA uniquely owns value chain optimization for the industry. There are a number of projects we are working on like rapid recall exchange where we've made great progress. I think what you are going to see over the next few years is we will expand that from value chain optimization to more demand creation as well. You'll see us start to work on things like center store integration, how we approach social media and digital as an industry and what are the rules of the road for doing this. I think you'll start to see us branch into demand creation and not just demand fulfillment.