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BOCA RATON, Fla. - On the final day of the Food Marketing Institute (FMI) annual Midwinter Conference here, there were two industry-related moments that had to make everyone sit up and take notice. One was the best kind of idea, one that would have both consumer and business benefits; the other was a piece of data that probably made a lot of people yearn for retirement.

The first was when Tim Hammonds, president of FMI, announced that the association was embarking on ‘Project Chill,” designed to help educate consumers about the dangers of listeriosis, one of the most lethal – and preventable – of the food-borne illnesses. Listeriosis develops in food when it is not kept at a low enough temperature, and often grows as a problem once people take their food home. Hammonds noted that 90 percent of people who contract listeriosis end up in the hospital, and a quarter of them die. “It is a disease that hits young, old and pregnant women disproportionately,” Hammonds said.

Project Chill, which will get its big push at the May 2005 FMI Show in Chicago, is designed to help consumers monitor the temperature inside their refrigerators, where it should always be below 40 degrees. Because many refrigerators do not have built-in sensors, FMI will work to get all of its members to prominently display refrigerator thermometers in deli and meat departments, along with educational materials to help people know what to do and why.

The other moment – which created its own kind of chill – was when Kevin Sneader, a director with McKinsey & Co., put up a map on the screen showing that in 2003, there were seven states where Wal-Mart had market share of more than 20 percent, and 12 states where Wal-Mart had a market share between 10 and 20 percent.

Then he showed another map, based on what he said were legitimate and conservative projections. This one showed that by 2015, it is entirely probable that the only places where Wal-Mart will not have more than a 20 percent market share will be California, New York, Massachusetts, and Illinois.

The McKinsey report, on competing in a value-driven retail world, also noted that consumers actually underestimate the values offered to them by Wal-Mart. Shoppers who buy products at Wal-Mart perceive the discount they are getting to be between five and 10 percent, he said, while the actual discount is between 15 and 25 percent. Add to that the fact that Wal-Mart is expected to own between 30 and 35 percent of the US grocery market by 2015…and you have the statistical likelihood of a competitive advantage for one company that is daunting to say the least.

MNB will have more coverage and analysis tomorrow.

In other FMI Midwinter news…

  • Jack Brown, chairman and CEO of Stater Brothers Markets, and William J. Grize, president and CEO of Ahold USA, were this year’s recipients of FMI’s annual Sydney R. Rabb Award, recognizing their “exceptional service to the community, consumers and the industry.”

  • In recognition of his statesmanship and commitment to forging alliances that benefit the entire food industry, James M. Kilts, chairman/president/CEO of The Gillette Company as well as the current chairman of the Grocery Manufacturers of America (GMA), was the recipient of this year’s William H. Albers Industry Relations Award.

  • Herb Pease, Sr., chairman and CEO of Marketing Management Incorporated, received a Distinguished Service Award from FMI, an award that Tim Hammonds said was due to Pease’s enriching the Midwinter conference with outstanding and timely speakers for 15 years, and serving as one of the first and largest donors to the FMI Foundation and its food safety education efforts.

  • In recognition of outstanding leadership in government affairs at the national and grassroots level, Norman S. Rich, president and CEO of Weis Markets, received the 2005 Glen P. Woodard, Jr., Public Affairs Award.

KC's View:
The silver lining of the McKinsey study is that even if Wal-Mart owns 35 percent of the US grocery market, and has a 30 percent market share of all retail sales – that still leaves a lot of business for everyone else. But grabbing onto any of those remaining dollars will require a lot of work, imagination and innovation…

In listening to Hammonds discuss Project Chill, our reaction was that this was the best kind of industry initiative – simple, credible, with definable results, and putting retailers in line with a consumer issue. It is a great place to start.

By the way, maybe supermarket chains with loyalty marketing programs ought to define their top 10 or 15 percent shoppers and give them the refrigerator thermometers with instructions and a thank you note. The thermometers only cost a few bucks, and the implications for long-term consumer relationships could be enormous.