One of the major promises of the Internet and advanced technology is that it allows for more efficient communication that does not rely on the spoken word. Transactions can be made and confirmed without time-consuming phone calls or face-to-face meetings.
But the produce industry was built on personal contact, and FoodLink, an Internet-based network that efficiently processes $10 billion worth of produce transactions annually, has not lost sight of that fact.
Kevin Brooks, chief marketing officer at FoodLink, based in Los Gatos, CA, said that new technologies are great for processing transactions, making change orders and confirming delivery, but there still needs to be face-to-face meetings to discuss promotional opportunities and allow buyers and sellers to share their thoughts and concerns.
As such, the firm sponsored its first FoodLink FreshBuys LIVE seminar last month in Monterey, CA.
“We brought together a major buyer (Unified Grocers) that uses FoodLink and about 20 of their suppliers, plus a few suppliers that they don’t currently do business with, for face-to-face meetings,” he said.
The seminar included an address by Roberta Cook, an agricultural economics expert at the University of California-Davis, to discuss some of the issues facing the industry. During the seminar, each supplier had the opportunity for a face-to-face meeting with the buyer (Lisa Garcia of Unified Grocers) and FoodLink also had the opportunity to discuss its value proposition.
The seminar was so successful that FoodLink has four more planned for 2012, with stops in California, Florida, the Northeast and the Midwest. Each seminar will bring together an individual buying group with some of its suppliers — all of whom are using FoodLink.
“We see this as a natural extension of what we do,” said Mr. Brooks.
He said that the firm’s core business is to connect buyers and sellers by handling their transactions. This is an extension of that service by literally connecting the buyer and seller to facilitate two-way communications.
The FoodLink executive said that the produce industry is unique and has different needs than other sectors of the supermarket. For example, he said that a center-store promotion for an item such as potato chips can be put together well in advance utilizing a plethora of data and merchandising tools to make the promotion successful. Because fresh produce promotions often cannot be put together very far in advance, promotional opportunities — such as an ad in the supermarket circular that goes to press six weeks earlier — cannot be utilized.
So Mr. Brooks said that constant communication between the buyer and seller is more important in the produce department. FoodLink recognizes this and is working hard to continually address the situation.
The name of the seminar, FreshBuys LIVE, trades on the firm’s program to address the same dynamic situation that is a hallmark for the produce industry.
FreshBuys, which FoodLink initiated in May, allows suppliers to target their communications to specific buyers with special pricing or special offers. A company may be long on an item and would like to promote an opportunity to a specific buyer. The FreshBuys part of the FoodLink program allows the supplier to do that. In fact, they can communicate different messages to different buyers at the same time. Mr. Brooks said that usage of this feature is increasing steadily among the company’s users.
Currently, about a dozen chains and a half-dozen wholesalers are using FoodLink from the buy side, with close to 2,000 suppliers participating.
“On any given day, we have about 1,500 suppliers handling transactions through FoodLink,” he said. “That accounts for about $10 billion in transactions annually, but we expect that to spike up dramatically over the next year with the addition of a new retail partner.”
Mr. Brooks revealed that as of mid-October, Giant Eagle, which is based in Pittsburgh, had joined FoodLink. By early next year, he expects the company to be processing produce transactions on the site.
Besides touting that news at the upcoming Produce Marketing Association Fresh Summit convention, FoodLink will be educating its customers and others about the firm’s new benchmarking-analytics service that it has rolled out in partnership with Tompkins Associates, which is a leader in supply analytics services, operating in the supply chain space, according to Mr. Brooks.
The company touts its own services on its web site, stating, “Benchmarking should be incorporated into an overall corporate strategy to create an awareness of what others are doing, broaden thinking beyond day-to-day responsibilities and ultimately lead to competitive advantage.”
Using data supplied by FoodLink, Tompkins “will offer a suite of business analytics for our customers. Nothing like this exists in the produce industry,” according to Mr. Brooks.
He added, “This will help our suppliers become category leaders. Obviously the more they sell through FoodLink, the better it is for us.”
Again on its web site, Tompkins relays that “Benchmarking compares your supply chain performance to that of your peers and to companies that are thought to be exceptional performers.”
In doing this, a best-practices review is conducted that can “identify the supply chain processes that have proven to deliver superior results in real-world implementations.”