global conference
Day 2 - Distribution and Supplier
Relations
Joining forces
The summing up
Magie wand
12 What'sNewS Issue 3 May/June 2001
middle class will drive changes in food
consumption. Overall, consumption pat-
terns will shift from subsistence to basic in
the next decade.
Earlier, John Bekkers had raised the issue
of preferred supplier positioning and even
partnership with retailers and other pur-
veyors of end poultry products. This point
was at the heart of global fast food sup
plier Sheldon Lavin's presentation: The
Power of Partnership. The CEO of OSI
Group's message was short and clear:
partnership can elevate your business to
levels you never thought possible. It's all
about sharing information, sharing risks,
sharing rewards, and most importantly:
sharing a deep feeling of trust and com-
mitment. OSI
Group's alntost 50-
year relationship
with McDonald's
has taken the com-
pany global. The
essence of partner
ing, Lavin ex-
plained, is creating
win-win scenarios.
'That means the
McDonald's system comes first, and when
you measure progress over the long term,
both parties are rewarded equally in ex-
change for sharing the risk.' In 1990, OSI
Group saw a need to diversify - at that
time around 97% of its business was with
McDonald's. When approaching new rela-
tionships, the Group took along its strate
gie partner philosophy. It works.
For K. Alan Warren of Giant Food, the in-
dustry is not so much in crisis, but in the
middle of a revolution. 'Our industry is in
great transition,' he said. 'and it's happen
ing in every facet of the supply chain. The
key to survival is in emhracing these
changes.' Lobbying for more emphasis on
education, he stated, 'We are truly under
attack. It makes no difference to people's
perception that more people in the US die
from bee stings in a month than have ever
been affected by CJD
anywhere in the world.'
He asserted that the in
dustry spends too much
energy and resources
fighting itself. 'Rather,'
he said, 'we should he
joining forces to work
through this revolu
tion.'
In his concluding remarks, professor Rav
Goldberg defined the main issues, factors
and realities which all players throughout
the supply chain must take on board.
They are:
- the framework of the protein industry
has becorne more complex as part of a
global 'agriceutical' system.
- the functions of the participants have
changed.
- the public has lost a great deal of faith in
governments, scientists and large-scale
private organizations.
- consolidation together with the loss of
confidence leads to a puhlic perception
of a 'power elite'.
- price discovery has become more diffi-
cult.
- the purchasing practices of
processors and distributors is
changing.
- nutraceuticals is already a
USD 65 billion global market.
- functional foods is a USD 265
billion market in the US alone
- organic foods share is increas-
ing 20 to 40% per year.
- food safety and nutrition are
high priorities.
- globalization leads to more competition
and more health risks.
- agriculture departments have become
downgraded and must relate more to de
partments such as the EPS, FDA, State
Department, labour, health, education,
welfare and comnterce.
- global quasi-governmental agencies have
become more important, such as Codes
Eliminitares and WTO.
- volatility adds to the difficulty
of ntanaging risks and product
development in the protein sys
tem.
- financial institutions, such as
Rabobank International, and
stock markets will have a more
difficult time evaluating invest-
ment decisions.
- reinventing firms and institu
tions is a constant battle.
- maturity of markets and eommercializa-
tion of them calls for new relationships
within the system and new R&D part
nerships.
- all of the above demand constant con-
sumer and bioethical involvement and
the development of new leaders in the in
dustry.
Touched on iYates' presentation, the floor
raised the issue of primary agriculture to
Sheldon Lavin, Alan Warren and Gold
berg. 'We can't live without them,' Lavin
agreed. 'That's why we have set up train
ing programs, especially in emerging mar
kets for our primary producers. That
works.' Argu-
ing that success
in any section
of the chain al-
most always
depends on
charismatic
leadership,
Goldberg said:
'We can't wave
a magie wand.
We have to
wave a magie entrepreneur.' Given his au-
dience of top CEOs and managers in the
industry, he could not have been speaking
to a more receptive audience.
Masthead
Editorial Staff
Coordination Kate Hedges, Corporate Development
and Distribution Marjolijn Benneker, Marketing Rl
Managing Editor Anne Lavelle
(TheWrite Company)
Editors Naomi Lindt,Susannah Gray
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