New FMI Format Has Ups and Downs
Commentary by Ronald Margulis, Managing Director, RAM Communications
The Food Marketing Institute held its first annual meeting last week in Las Vegas under a new format in which the trade expo will be held every other year, and the reviews were decidedly mixed. The show floor seemed crowded the first two days, but that may have been due to a shrinking hall, which was considerably smaller than the South Building at McCormick Place where FMI + MarkeTechnics was last year. Also, the configuration of the floor reminded many of the casinos nearby with disjointed aisles that confused attendees. And it was clear there was no need for a third day of exhibits, as most retailers left Tuesday night or early Wednesday.
The educational workshops were mostly well attended, and even the last general session on Wednesday morning attracted more than 200 people. The Speaks session, delivered solely by out-going FMI president Tim Hammonds after former senior vice president Michael Sansolo had led the effort for more than a decade, was filled with good information. Mr. Hammonds even tried to give the industry a wakeup call on the pending human relations crisis in the supermarket business, but is leaving it and other challenges to his successor. This is what I viewed as the biggest problem with the conference — there was an almost palpable sense of malaise at the show, and it wasn’t just from the state of the economy or the never-ending presidential primaries.
The industry certainly needs a wakeup call on the pending human relations crisis, and could use a kick in the pants on things like food safety and trading partner collaboration. Without a sense of vibrancy, really a passion for the business and its consumers, supermarkets will continue to be targeted by both government regulators and new competitors. There are still several questions to be answered, including how next year’s conference will turn out and whether exhibitors will return to the show in 2010. Whoever is chosen as the new chief of FMI must have this passion or the trade show, the association and the industry as a whole will suffer.
Discussion Questions: What should be the priorities of the incoming president of FMI? What are the most important issues facing the food retailing industry and what role must FMI play in these to remain a vibrant trade association?
Our industry, whether on its own or in conjunction with great colleges like St. Joe’s, needs to share best practices on hiring and training. We can try to figure a way to share our private label brands, procurement, and informational programs like Hannaford’s Star Program, but we also very quickly need to tap into ethnic groups, business schools, and high schools and develop not only career paths, but give these groups the tools to be successful in all the facets of retail.
FMI, as well as NGA, are in the best position to foster and drive this.
Glad to see several commentators distinguish between the FMI trade show and the greater mission of the association. Certainly the huge forum on the lake front was a must-attend showcase for many years, but it peaked in the late 1990s due to industry consolidation and what I interpret to be a lack of vision.
The structural changes in the industry naturally require the role of the association to evolve. Perhaps by the late 90s, our leaders were tired from their exertions in support of the Efficient Consumer Response movement. There was vision behind the ECR initiative, I think, even though it met only a fraction of its potential.
But the impetus once provided by fear of the Wal-Mart juggernaut has now morphed into a kind of resignation to the status quo. What will motivate us now to productive, collective action?
Not another ordinary, if solid, trade show supported by a slate of educational sessions that have been so edited by lawyers and corporate communications wonks that they are cleansed of actionable ideas. We need retailers to step forward and share best practices with meaningful level of detail, and we need to provide appropriate forums where this can happen.
The changing of the guard at FMI may regarded as an opportunity, then. Not just to alter the format of the event, but to reconsider the goals and actions of the association in current, relevant terms.
This is the first time I have attended FMI and based on what I had heard from colleagues who had attended previous conferences, I was disappointed. Understandably, it was smaller than previous editions because of the change in location but I think it was also down on quality. I would have to think carefully before investing the money and time to attend again.
The retail industry has never had a strong trade association, in any segment. If it did have one, it would know the difference between trade association ACTION and trade SHOWS. A look at the anemic dues schedules at any retail association shows why. Retailers who make billions per year cannot expect to spend a few minutes’ worth of revenues and get meaningful results. If retail companies adopted the petroleum industry’s model and if each invested millions per year in an association, the results would be dramatically different.
FMI has been a vibrant organization for many years. Unfortunately they did not listen to their membership and stuck with Chicago for way too long.
FMI served a vital function for the grocery industry for years. When grocers, suppliers, brokers, etc were smaller, FMI was a mammoth information exchange. It was also a center for communication and job hunting. Every one who was Anyone in the Grocery Industry was there. Consolidation was a primary factor in the demise of the “old FMI.” Grocers became so few that every executive in every supplier organization knew every corporate grocer. You didn’t have to go to Chicago to see them anymore, because you saw them every month. FMI evolved into an “it’s new” show, but alas, the people you wanted to talk to no longer came or came in disguise, in hopes of avoiding 10,000 lame pitches by one shot sales artists.
Communication has also hurt FMI in that we all used to rely on sales calls or telephone calls to get information, now it’s the internet and email. Do you realize that some retailers are getting too lazy to go to a web site? FMI used to be a great party where you ran into great people and had a great time eating and drinking in Chicago. You caught up on careers and career changes. Visited those you respected and tried not to be so obnoxious as to offend any customers (being obnoxious was typically reserved for them). Oh, some of the tales I could tell.
Many a sale was made based on what was observed in Chicago and the gentle reminder that you were a witness. Well, Chicago got old. The unions made putting up a display a hassle, Hotel costs shot through the roof…it just became too much. The need to be there just didn’t justify the cost any more! Maybe if FMI had listened to the people who were actually paying the bills and adjusted to meet their needs, the big show would have survived.
Oh, did I mention that the government’s reluctance to enforce the Sherman Anti Trust Law contributed to the demise of FMI. They allowed BIG to hammer discounts from suppliers that small couldn’t demand and forced the BIG FISH feeding frenzy that has given us our present retail grocery industry.
FMI’s decline under Hammonds parallels that of many of its members…from “THE” industry trade show to one few attend. Years ago, many arrived in Chicago the day before and left after the last presentation. Over the years I have reduced attendance from 3 to 2 to 1 day and now only when I have nothing better to do. This was the show where most new products were presented.
FMI simply has no strategy and lacks an understanding of its target market. Over the years it tried to be an international trade association and it failed. Then it went to attract wholesales and independents, but after they arrived they were treated as second class citizens. Other trade associations like PLMA and CIES have grown while FMI has declined. FMI cut off the consultants that created the leading edge ideas for the industry and then only funded yesterday’s research. It let the CPG companies set the agenda in ECR, which failed. Lacking leadership and vision leads to decline.
FMI needs to re-look at the strategy that made it great. It needs a new vision for the times and a clearly defined target membership. If FMI remains the largest retailer club that it is today, then it will only continue to decline.
Everyone’s talking about sending a wake up call to the industry. The problem is that every time someone tries, they hit the snooze button.
I don’t think you can put the blame on any one person for the decline of the FMI trade show model. It’s simply evolution. But we have yet to have someone stand up and say “this is wrong, this is what has to be done to be viable in the future.” I’m not sure Future Connect, as it stands now, is the answer. We’ll see.
One of the problems is the incestuous nature of this business. Everyone basically comes from the same seed and thinks alike. This doesn’t bring new ideas to the table, it only perpetuates what’s been done for decades.
I believe that FMI can be more than just another lobbying group. It can be a formidable educational institution if it starts to solicit opinions and ideas that might make it uncomfortable. Bring people in with different points of view on issues not just those who will rubber stamp management or directors’ decisions.
Let’s begin by asking, “What is the true value of the remaining food associations?” The industry’s members are the most important factor in the scheme of things. But their success, or lack thereof, does not seem to reflect that. Are the associations supposed to provide vision, clarity, guidance and vibrancy to the industry and thereby help assure the successful continuance to their constituencies? Or should they be focused on self-preservation or some other inwardly-directed objectives?
In the past three decades, as technology and non-traditional players have opened new avenues for success, what has happened? The food wholesaling sector has declined, the size of the independent grocer environment has dwindled, supermarkets have consolidated and struggled, non-union supercenters & warehouse clubs have gained impressive market share and, as Ron notes, the trade shows are even considered by some to be non-magical.
If the new leadership of FMI does not breathe new life and dynamics in all the issues listed in the ensuing questions; if it can’t arouse and lead its members to keep successful ahead of the ever-changing cusps in the both the domestic and international marketplaces; if it can’t motivate members to build uniqueness, technical sophistication, better trade cooperation, build a sense of theater into the food shopping experience and make it a destination event, what will be left for the new leader to do besides conduct social venues for the remaining principles in the food industry?
Totally in agreement. Being associated with FMI for years, there does need to be some shake up and a renewed passion for the current challenges and opportunities facing this industry. What an opportunity to share knowledge and information to the membership!
Unfortunately, the whole conference needs a new plan. In this day of many opportunities, obviously the right vendors with the right solutions were not at the show. To change the venue to every other year because the execution was not well done is a flawed decision.
This is a wake up call facing all associations. The speed of business and technology is changing so fast that all associations must evolve to relevancy or become extinct. Many associations have counted on being the information and knowledge center as the means of attracting members. Today the internet fills that void. Therefore, they must have a shake up of the “we’ve always done it that way” attitude and become more in tune with the needs and desires of the members and find innovative ways of meeting those needs.
Associations, by their name, usually hire “association executives” to head the group. This is changing! Volunteer boards are realizing they need someone with business acumen and experience in the industry to lead the organization.
FMI needs to decide what it will be when it wakes up.
For over a decade the association that once set the industry discussion agenda for the year every January at its Midwinter Executive Conference has consistently failed to produce anything approximating a piece of high quality research or cutting edge thought leadership. The world changed and the association slept through it, wrapped in the comfortable blanket of its past glories.
So, the first challenge is to determine what FMI’s role is, or should be, going forward. Is it a research organization? Or is it best cast as a focused lobbying group? Should it improve the old events/meetings model of revenue generation or set it aside in favor of a totally new model?
Before she or he can answer that question the next leader of FMI needs to settle on who it is the association represents. Under Tim Hammonds et. al. the association seemed to adopt a “Big Tent” model of membership attempting to appeal at various times to Wal-Mart, traditional chain stores, independents, wholesalers and even once attempting to lure in NACS members. The common theme? “We represent folks that sell stuff.”
It’s a workable model for associations like NRF (which by the way seems to have picked up the useful research torch and run with it) but it never seemed to work for the food industry per se. Ironically, the years have seen NGA — which many FMI staffers viewed as a dead man walking — grow and thrive precisely because it could clearly articulate who it represented.
The new incoming FMI president will also have to find a slightly more convincing story to tell the increasingly alienated manufacturers who have been distancing themselves from the show for years. The loss of exhibitors like Procter & Gamble and the downsizing of exhibition stalwarts sends a clear message that manufacturers want to be seen as supporting the membership but not necessarily the association.
Under Bob Aders, FMI became an association empire. Under Tim Hammonds the empire was lost. Times changed and the association didn’t change with it. This doesn’t mean FMI is lost but it does mean it would benefit from an injection of new thinking sprinkled with more than a dusting of common sense and pragmatism.
There are more unanswered questions today about the future of the industry than there were 15 years ago. Let’s hope FMI’s next leader has the courage to ask them and the wisdom to begin developing some new answers.
The FMI show was treated by the organization and its primary members (Supermarket Operators) as a revenue source. The benefits exhibitors expect from investing time and money in a trade show dwindled as FMI members brought fewer managers and spent more time at educational sessions, parties, and receptions. FMI’s “for profit” approach to the event tried to create more revenue by offering new events built around extracted segments of the show. These efforts never succeeded–but they did diminish the impact of the main event.
Supermarket operators have long expected suppliers to support their causes. Golf outings, charity dinners, in store labor, slotting allowances, pay to play, pay to stay; all indicate that business with some supermarkets is a “one way street.”
When supermarkets began to abandon their own event–suppliers knew that participation was no longer justified by sales or sales leads–participation became yet another “compliments of a friend” contribution.
So maybe where we are now is a good place. An expensive event, one that attendees and exhibitors have all but rejected by their actions, will soon disappear. Think of the energy, money and time that can be redirected to more productive activities.
So how will FMI fund its initiatives in the future? FMI’s board will be forced to more clearly define what they want from their organization and then fund those initiatives from their own contributions.
This may also be a good thing. Unproductive programs will be dropped faster than “low carb” items. Paying your own way injects much need pragmatic thinking and clarifies agendas once burdened with expensive programs loaded with politically correct buzz words.
The trade show industry went into a steep nosedive when the internet got popular. And there are so many retail-related industry seminars that if you attended all of them, you’d never get your job done (and you’d die of boredom from the repetition.) Want some new ideas? Need to research some strategies? Want to learn what the smartest competitors are doing? Why can’t you use Google and the telephone? You really need to fly someplace, stay 3 nights in a hotel, walk 4 miles of exhibits, get a plastic shopping bag with free pens and refrigerator magnets, and sit through 12 hours of PowerPoint talks? That’s the best way to spend your time?