Keeping Pace with a Changing Industry
In early 2015, the Convenience Distribution Association (CDA) emerged from the former American Wholesale Marketers Association (AWMA). But, like the industry it serves, its transformation is ongoing.
Taking the stage at the Convenience Distribution Marketplace, held in Las Vegas Feb. 16–18, CDA’s 2016 Chairman Chad Owen said continuing the status quo and hoping for the best is not the way to do business anymore.
“Change is not easy, but it’s necessary,” he said. “That’s what the new CDA is all about.”
Owen serves as vice president of business affairs for Chambers & Owen Inc., a family-owned convenience distribution business based in Janesville, Wis. He grew up in the company and acknowledged that even though Chambers & Owen is a family business, “we know today, more than ever, we need to change with the times.”
The same goes for CDA as it makes moves to become more relevant in today’s environment. More than just changing its name, the association has streamlined meetings and educational offerings, adding online webinars to its education programming. It recreated an online directory for all CDA members with a single online login. The association’s new CDBX Meeting Match System also helps member distributors arrange meetings with key trading partners.
Keeping up with change — and thinking one step ahead — was likewise a key theme of the keynote presentation during the Convenience Distribution Marketplace’s opening session. Speaker George Blankenship knows all about staying ahead. The former executive worked at several top retailers ahead of their time, notably Apple Computers and Tesla Motors.
According to Blankenship, winning in the ever-changing retail world takes more than winning over customers and earning their loyalty. He said all players in the convenience channel, regardless of which side of the supply chain they stand on, must think about the circumstances behind their business decisions — for example, generational changes or increased competition.
He encouraged the audience members to close their eyes and think about what is going on in the industry. Whoever comes up with a solution will hold the industry in the palm of their hands, he stated.
“To change the world, sometimes you need to do the impossible,” Blankenship explained. “It’s not impossible; it just hasn’t been done yet.”
SHARED CHALLENGES
Keeping up with the changing industry is not the only thing CDA and its members have in common with convenience store operators. Both sides of the retail equation face similar challenges as well.
“We are all just part of a supply chain, delivering and satisfying consumers,” said Richard Oneslager, owner of Balmar Management Group LLC, which has eight c-stores in the Denver area. He was one of the participants in a retail panel discussion during the event.
Oneslager joined Lisa Dell Alba, president and CEO of Square One Markets, and Iris Yost, owner of four 7-Eleven locations in Las Vegas, on a panel moderated by Ieva Grimm, president of Pittsburgh-based business improvement firm Synerge.
Grimm said she began working in the channel in 2000 and has observed the face of the industry “clearly changing.” She compared a convenience store operator’s mind to “a whirlwind,” filled with issues like gas prices, equipment and out-of-stocks.
“Regardless if you have one store or 50 stores, you live in it and it can be painful,” Grimm said. “It’s personal. It’s what we’ve chosen to spend our lives at.”
To be successful, c-store retailers need to stay on top of increased competition, regulatory pressures — which ultimately lead to increased operating costs — and customer expectations.
However, the same can be said for the distribution side of the supply chain. During the executive panel discussion on retailer-wholesaler relationships, distributors participating from the audience indicated that competition from other distributors and increased operating costs are key factors impacting their business today.
Part of satisfying today’s consumer means having more fresh offerings in the stores, according to Oneslager, who noted “fresh food is a huge piece of our business.” He noted, however, that traditional wholesalers and suppliers still “need to figure out how to handle that part.” Those who are doing foodservice well are making a big commitment and investment.
“You can’t just dip your foot in it,” Oneslager said.
WORKING YOUR CORE
While no one disputes change is good, the convenience channel can keep one foot rooted in the past as it looks to the future. This includes keeping a focus on tried-and-true core products.
“This business was all about cigarettes, candy and snacks,” said CDA Marketplace speaker Kit Dietz, principal of Dietz Consulting LLC in Ohio. “That’s where everybody started.”
Core products, he believes, still present great opportunities to keep growing. For example, according to data compiled from warehouse-delivered c-stores, center-store categories accounted for $15.6 billion in 2015 sales — a 5.8-percent increase vs. a year ago.
And despite the challenges in the tobacco category, “everybody who rides the supply chain benefits from the efficiencies of tobacco,” Dietz noted.