This document provides strategies for food distributors to stay ahead of competition. It recommends (1) controlling inbound traffic to increase profits, (2) adopting supply chain technologies like mobile devices and analytics software, and (3) benchmarking performance against metrics like space utilization. Additional tips include requiring education through certifications, collaborating through resource pooling, eliminating direct-store-delivery where possible, and embracing social media. The overall message is that distributors must be proactive about change to remain successful.

1. Seek to stay out in frontand don’t look back! Richard Kochersperger Summer, 2011 1 “Don't look back. Something might be gaining on you.” Satchell Paige

2. Tell Me and I Forget Teach Me and I Remember Involve me and I Learn Ben Franklin 2

3. Industry Gurus 3

4. Goals/Objectives View of the Food Industry: Retail/Foodservice What is the Competitive Landscape? Future Insights and Opportunities 7 Steps to stay ahead of your competition 4

6. 16,000 kids die everyday due to starvation!

7. 1/7 Americans are on food stamps5

8. World’s Best Supply Chains 6

9. Shopping Trips 7

10. Key Trends 8

11. Changing Household 9

12. Ethnic Expansion 10

13. Government Regulations CSA 2010: Expect to lose 150,000 drivers=5% Hours of service to be reduced Electronic Recorders on all vehicles. Carrier Scorecard Food Safety Modernization ACT 2010 Most sweeping overhaul of the food safety system since 1938 Several provisions are already in effect Increased inspection frequency, Expanded records access, Import certification authority, Mandatory recall authority , Fees, Port shopping, Whistleblower protection 11

14. Food Industry Graveyard 12

15. Food Industry E R 13

16. Food Industry Winners 14

17. Foodservice Industry 15

18. Understand the Competitive Landscape: Leaks 16

19. Big Moves 17 100+ stores in Canada Walgreens Philly/Pittsburgh

20. Wal-Mart 1st Quarter Results 18

21. Wal-Mart Emergency Response 19

22. Wal-Mart 20

23. Wal-Mart 21

24. Wal-Mart 22

25. Wal-Mart 23

26. Tesco 24 Lost $930 million

27. Walgreens

28. Walgreens 26

29. Gordon Food Service 27

30. Farmers Markets 28

31. On Line Food Sales 29

32. Amazon.com Sales: $34 Billion 55% North America 45% International Profits: $1.15 Billion Inventory Turnover 11/33 days Accounts Payable 72 days More e-books than hardcover and paperback 30

33. 31

34. 32

35. Amazon.com 33

36. Gilt Group 34

37. Gilt Taste American Wagyu Steak Duo American wagyu used to be considered a pale imitation of Japanese "Kobe" beef. But that's changing. By carefully breeding Angus and wagyu cattle, Mishima's beef keeps the incredible richness of wagyu, but adds the minerally flavor of a great American steak. This four steak set proves it. Additional information $199.00 • Two 6 oz Tenderloin, Two 14 oz Ribeye 35

38. 36

39. Gourmet On the Go: Good Food Goes Trucking 37

40. The “Pop-Up Restaurant” 38

41. The “Pop Up Food Store” 39

42. Manufacturers Competition 40 Everyone wants a piece of your business!

43. Thought “To Succeed, Stay Out in Front of Change!” Sam Walton 41

44. The Age of the Customer 42

45. E Commerce Retailers 43

46. Shopper Marketing 44 “ Shopper Marketing is the use of insights-driven marketing and merchandising initiatives to satisfy the needs of targeted shoppers, enhance the shopping experience ,and improve business results and brand equity for retailers and manufacturers.”

47. Shopper Marketing 45

48. Social Media 46

49. 47

50. Social Connections 48

51. Social Media 49

52. Social Marketing: Reality Check Source: 2011 NGA Consumer Survey Report 50

53. Reality Check Despite the flurry of activity, social media marketing remains experimental in nature 13% are on Twitter Social media marketing is going to blow the shingles off the roof once people really figure out how to use it Megan O’Connor, Levi Strauss 51

54. Next Generation of Shopping Try on clothes in 3D, share photos with friends, and store wish-listed items on smart phones 52

55. Ipad/Tablet Changes the World 53

56. QR Quick Response Barcode 54 A QR code (abbreviation for Quick Response code) is a specific matrix barcode (or two-dimensional code) that is readable by dedicated QR barcode readers and camera phones.

57. Nanotechnology 55 Contamination Sensors Pesticide Reduction Anti microbial Packaging Tracking, Tracing, Brand Protection Improved Food Storage Texture Enhanced Nutrient Delivery Flavor Green Packaging Bacteria Identification and Elimination

58. RF-ID Alive and well!! Developments: Eliminate the check out process at the store Improve inventory management Reduce mistakes unloading products inbound/outbound Monitor temperatures throughout supply chain Minimize paperwork 56

59. Next Phase of E/M/F Commerce 57

60. % of Total Category Sales Online 58

61. E/M/F Commerce 59

62. M-Commerce 60

63. On Line Retailing Battleground 61

64. E Commerce: Segmented 62

65. Price Comparisons 63

66. F-Commerce 64

67. Alice.com 65

68. Pet Products 66

69. Groupon 67

70. Evolving Marketplace 68

71. Future FCPG Industry Supply Chain Information ?????? Retailers Command Center The Consumer Strategic Hub Information Information Distributors Suppliers Third Party Manufacturing Alliances, Network Partners Regional, global plants Bulk, Semi-finished, Filling Finishing, Information Information 69

72. 70 When there Is no vision, the people perish!

73. Issues and Opportunities 71

74. VP Logistics: Responsibilities 72

75. Decision Makers???? 73

76. 7 Steps to Stay Out in Front! Control Inbound Traffic Embrace Technology Benchmark Education Collaboration Eliminate DSD Embrace Social Media 74

77. 1. Control Inbound Traffic Backhaul KPI: 28% of loads; .25 profit Need professional traffic department CC license; Intrastate authority Purchase all products: FOB mfg dock Set up inbound movements Drop trailers with mfg Establish consolidation centers Partner with other food distributors Reading today’s freight bills is a challenge Need for auditing/transportation billing is complex trying to determine total landed cost Net result: Significant increase in profits 75

78. 76

79. 2. Supply Chain Technologies 1. Mobile Computing Devices Smart Phones/Tablets 2. Analytics Software Prescriptive: What’s going on in the supply chain now! Predictive: What’s going to happen in the future? Oil Prices; Food Commodity Prices; 3. Game Changers 77

80. Technology Revolution 78

81. Post PC Era 79

82. DC Applications Seegrid'sSafetyPick Kollmorgen’s Pick-n-Go solution 80

83. Witron-Sobey’s, Supervalu, Kroger 81

84. Kiva Systems: Slow Movers 82

85. 3. Benchmark Most public studies are a waste of time Participants lie; definitions are different; Industries applications vary KOM International Rofda IFDA Trade with one another. Visit other DC’s. 83 What gets measured , gets managed Peter Drucker

86. Dashboard/Scorecard Space Utilization Equipment Utilization Inventory Analysis Slotting Audits Hours Accountability Key Performance Indicators Weight per Case Cube per Case Value per Case Item Count 84

87. Inventory Analysis 85 60% of your inventory moves less than 1 pallet a week Most Important Position: Inventory Control

88. Product Mix: Velocity 86 Most Important Position: Inventory Control

89. Audit/Scorecard System Internally, formalized performance system Many vendors/distributors have established scorecards Sustainability Wal-Mart Sustainability P&G Sustainability Business Collaboration Net Result: Different costs = Different Prices 87

90. 4. Require Education Lifelong Learning Online tools: Skype, Blackboard, Sakai, Webex Webinars Associations: Logistics Institute, CSCMP, APICS, ISM, Accenture Supply Chain Academy, IGA Coca Cola Institute, “If you think education is expensive, try ignorance” 88

92. CSCMP

93. ISM

94. The Logistics Institute

95. WERC

96. Accenture Supply Chain Academy89

97. 5. Collaboration Pooling of resources between manufacturers; between distributors; between retailers for the purposes of reducing costs Consolidation goods for transport Sharing of transport vehicles, DC’s, Sharing back office processes such as: Finance, customer service, equipment maintenance Return center 90 “If you want to be incrementally better: Be competitive. If you want to be exponentially better: Be Cooperative.” - Unknown

98. What Shippers share during horizontal collaboration 91

99. Barriers Stopping Further Investment 92

100. 6. Eliminate DSD 30% of retail food stores sales are DSD 50-75 deliveries per day every store Cost to handle: 15-30% of cost of goods Increased energy prices makes it very expensive Establish a cross-dock operation to handle all DSD products onto your transportation fleet Tesco: 90% flow through DC’s 93

101. 7. Embrace Social Media Use Social Media to your advantage Youtube: show video of your key operations Order selection/Loading customer orders Checking product temperatures on inbound deliveries Cleaning the docks/aisles Warehouse/Transportation roadeo Assign a supervisor to blog about the operations Conduct a contest in the DC with team Provide resources to listen: customers, associates 94

102. Closing Thought Excellence is not a skill. It is an attitude. ~Ralph Marston 95