CHICAGO (July 11, 2010)—The first joint conference between IFDA and IFMA—between distributors and manufacturers—kicked off Sunday in Chicago, and through a panel discussion, expert presentation and round table forums, one message came through loud and clear: distributors don’t trust manufacturers and vice versa. Oh, and operators don’t trust either of them.
The manufacturer/distributor model “has evolved into a combative zero-sum relationship instead of, how do we work together,” as Dr. Richard George, professor of marking at St. Joseph’s University, relayed from a survey he’d conducted of the two groups.
Despite the lack of trust, there seemed to be agreement on what needs to be done to fix it, as Dr. George explained. There needs to be more communication between distributors and manufacturers so each understands the challenges the other faces and the goals they’re working toward.
Dr. George explained that distributors feel manufacturers need to let their guard down more. “Transparency and trust are key,” distributors told Dr. George. “There needs to be an atmosphere of openness… a move from simply paying for cases shipped to developing a partnership.”
Likewise, manufacturers think distributors need to let their guard down. “Distributors have to be more open in terms of access to operators.”
But manufacturers also acknowledged that there’s opportunity to grown and provide greater satisfaction to the end user by being more transparent with distributors and sharing data more freely, Dr George’s survey showed.
Operators, meanwhile, want distributors and manufacturers to better understand the pressures they face.
One of the greatest challenges Jeff Sinelli, owner of 100-plus-unit Which ’Wich, faces is the turnover of distributor sales reps and having to get new DSRs up to speed. “Those relationships can be challenging,” he said during an operator panel discussion.
Jonathan Bennett, chef/partner of Moxie the Restaurant and other concepts in Cleveland and Miami, said he can’t always trust his distributor is telling him everything he needs to know. Without his knowledge, for instance, Bennett’s distributor started delivering a new salt that was higher in sodium, making the food taste saltier.
“I need to know that I’m getting what I paid for,” he said.
Bennett and Sinelli both said they are getting price increase letters more frequently today than ever before and that neither has raised their prices in the last year. “[Distributors and manufacturers need to] be aware that we haven’t raised our prices. We have to absorb those price increases.”
During round table discussions among audience members, there was a consensus that with consumers spending less and demanding more, distributors and operators need to develop a new way of working together to meet the needs of operators, who are stretched thin.
As Dr. George summed up, “The time of yearning for yesterday’s better days is past. The time for action is now!”
What exactly does that action look like? There’s two more days of the conference. Let’s see if that gets figured out. Stay tuned.