WELCOME TO THE AWMA REAL DEAL EXPO

A New Direction for AWMA: Championing Distributor Value & Building Profitability

Chairman Jode Bunce makes a stirring call for a paradigm change.

An aggressive plan to constantly remind suppliers and customers of the value provided by convenience distributors and to increase profitability for member companies was outlined Thursday at the AWMA Real Deal EXPO by AWMA Chairman Jode Bunce.

"Clearly, it is time for a paradigm change," Bunce, vice-president-cigarettes, Eby-Brown, Inc., challenged members attending the EXPO’s general session Thursday morning. Referring to analyses that show convenience distributors as "dead last" in profitability of 75 distribution industries studied, Bunce said AWMA has redoubled efforts to change that.

The AWMA Chairman pointed out that the 2006 AWMA study, "The Distributor Value Equation," detailed in graphic terms the value of convenience distributor services and stressed that changes are needed to allow distributors to stop what has been a steady, industry-wide, decline in profits.

"In order for distributors to improve their profitability, it is absolutely essential that both retailers and manufacturers are reminded by us relentlessly about the value we are bringing to the convenience supply chain," he said, noting that the foundation and the tools to accomplish that were provided in the "Value" study.

Already, Bunce said, that research has had a "profound impact" on the industry as a number of distributors have independently changed their policies in the packaged beverage category, which the study pointed out is responsible for a disproportionate share of cost-to-serve and profit loss.

To build on that work, AWMA is taking the following steps:

Developing two PowerPoint presentations for distributors to use with retailers and manufacturers to help communicate the value distributors bring to the supply chain.
Conducting educational sessions to examine three key areas that affect distributor profitability – heavy/high cube items that fail to even cover costs, the erosion of cigarette profits, and how expanding collaborative relationships with manufacturers can help boost profitability.
Developing a follow-up to the Distributor Value Equation study containing recommendations for action by distributors to help improve profits.
Developing a Profitability Conference for senior management to explore issues involving profitability.
Communicating, with the help of the Industry Affairs Committee, the value to manufacturers of keeping a strong distribution community by providing programs that generate profit for all trading partners.
Expanding participation in the Hershey Industry Performance Analysis (HIPA report), the industry’s only tool for benchmarking profitability.
Conducting the Convenience Distribution Conference in conjunction with the International Foodservice Distributors Association.

"We have to get motivated to change the paradigm," Bunce declared. "It is not going to be easy. Nothing worth doing ever is. But now is the time."

Bunce outlined the many activities and services provided now by AWMA and urged members to be involved and participate as the organization seeks to find ways of helping its members become more profitable for the future.

"To take it to the next level, we need the involvement and participation of every distributor in this industry and all our manufacturer partners," he said. "All of you. Come to AWMA events and be a participant and not just an attendee. Become a member of one of our committees. Increase your involvement. Let your voice be heard."

For more information on attending the AWMA REAL DEAL EXPO, contact customer service at either 800-564-4220 or 703-449-6418 or awmaregistration@jspargo.com