Distributors and their suppliers from across the nation gathered into Las Vegas in February for the 2008 AWMA REAL DEAL EXPO, held at the Las Vegas Hilton.

“We have a sold-out show and we had a waiting list,” said Dick Dunham, vice president - operations of Stephenson Wholesale Company, who officially took over as AWMA chairman during the EXPO. Looking over the crowd at a jam-packed opening reception Wednesday night, he said, “All of these people are here to do business with the people with whom they need to do business. We’re on a roll right now.”

Dunham commended the work of outgoing Chairman Jode Bunce, vice president, cigarettes, Eby-Brown Company, who led an effort over the past year to help distributors improve their profitability. “I think the association is doing a fine job and I want to build on what Jode and past chairmen have done,” he explained. “Improving distributor profitability is a priority and it will continue to be a priority.”

“I just want to see AWMA continue working on this profitability effort,” said Bunce. “It’s essential that we keep this going.”

AWMA President Scott Ramminger said this year’s EXPO was “one of the best in years.” Noting the sold-out condition of the trade show, he added, “This is a great event for both distributors and manufacturers.”

Suppliers and distributors alike were optimistic as the 2008 REAL DEAL EXPO got underway.

“I really like the direction that AWMA is taking in emphasizing profitability and helping distributors find ways to improve their bottom line,” said Justin Erickson, president, Harbor Wholesale Grocery. “We have made that our focal point at our company, and the results are becoming evident. AWMA is providing great information with its studies and reports, and they are really helpful. And it’s great to see the excitement and enthusiasm here at AWMA once again.”

One of the major attractions of the EXPO is the opportunity it provides for distributors and manufacturers to do business together. “The main thing that we achieve is to get with our long-time customers and friends and talk about what they are trying to achieve and how we can help them do that,” said Gary Jarvis of Retalix.

Building profits
The day before the EXPO opened, AWMA offered a unique program for buyers that provided distributors with a strategy for boosting sales and profits by leveraging category management and working closer with suppliers to find new business opportunities.

Presented by industry consultant Kit Dietz of Dietz Consulting, Huron, OH, and Frank Davoli, director of purchasing, Richmond-Master Distributors, the program outlined the benefits of optimizing assortment, sales and margin through category management, category assessment and multi-vendor strategies. Also discussed were the benefits of better managing supply chain costs by applying activity based costing (ABC), through better communication and cooperation among trading partners, and of moving more products through the warehouse distribution system.

Using the snacks category as an example, Dietz contended that the convenience channel has over-emphasized the role of direct store delivery (DSD) and has under-utilized category management in snacks. “High margin power brands are overlooked, under-spaced, poorly leveraged and improperly positioned,” he said.

Distributors attending the session were told that significant sales and gross margin improvement can be achieved by reinventing their approach to branding in the snacks category. “Properly balance the role of DSD and warehouse-delivered snacks according to consumer brand preferences to maximize sales and gross margin opportunities in each snack segment,” Dietz advised.

Improving the use of category management in the snacks category should be focused on meeting consumer demand in the store, maximizing the total snack category’s performance, and increasing retailer’s sales, margin and profitability, he explained.

Distributors were encouraged to conduct category assessments to determine the margin differential of products to more effectively merchandise the store. Take advantage of multi-vendor merchandising opportunities that will help retailers improve sales at higher gross margins, Dietz stressed.

A study of two convenience store chains representing 600 stores demonstrated that the Snack MVE program developed by AWMA generated a more than 20 percent increase in dollar sales and 23 percent increase in gross profits across all snack segments, according to Dietz, who said that program can be used as a template to be applied to other categories and category segments.

Pointing out that AWMA’s Distributor Value Equation study identified SKU proliferation as a major problem for distributors, Dietz urged trading partners to work more closely together to better manage product assortment.

Sold-out EXPO buzzes with business
AWMA members and their suppliers got down to business on the opening day of the REAL DEAL EXPO, where new contacts were made, old acquaintances were renewed, and plenty of deals were cut.

“It’s going really well,” reported Aly Karim, Select Distributors, Inc. “We’ve made some great contacts. For us, the AWMA show is not about selling the product – it’s about building relationships.”

Joe White, Prime Time International, said traffic on Thursday was good and that even early in the show people were writing deals. “We’ve already had orders,” he said. “This show has grown over the years.”

For Robert Pijeira and his colleagues at General Tobacco, the show was also going well, he reported. “It gives us an opportunity to talk to our wholesalers face to face,” he said. “I’ve had a lot of customers visit us to see our new products.” He pointed out that General Tobacco has just opened a new factory in North Carolina, where their cigarettes will be produced. “There’s a lot of interest in that,” he said.

Dennis Gaffney, national sales manager at BDI Marketing, said distributor interest in their energy products has been good. “Today everybody is trying to cram more things in their day and they need a pick-me-up,” he said. “Booth traffic? So far, so good. We’re happy with the business we’ve written so far.”

At last year’s show, John Huisman of Lucoral Company, which markets the “Wish Pearl,” a real fresh water pearl on a chain that is targeted to young girls, said he achieved a “real breakthrough” when he lined up a new broker to represent the company in the northeast. The result has been placement of his product in three major supermarkets. Back again this year, Huisman is looking for more brokers.

“We keep coming back,” said Michael Harris, convention exhibit manager for Kraft, as his booth staff met with distributors to show new frozen bagels stuffed with cream cheese intended for c-store foodservice sales. “It’s an opportunity to show what we’ve got and to show our newest products.”

“Traffic has been steady and we’ve seen key distributors here,” reported John Curiel, director of sales for specialty markets at Farley’s & Sathers Candy Company. “We are very pleased.”

Expo attendees: “We did business here”
EXPO attendance increased this year by more than 12 percent over 2007, with 10 percent more exhibitors and 11 percent more booth spaces producing about a 10 percent increase in net booth sales.

Those positive numbers reflected the atmosphere evident throughout the conference and the trade show as distributor after distributor said they learned a great deal from key presentations and that they conducted plenty of business on the trade show floor.

“I thought the program discussing the Canadian tobacco situation was the best I’ve ever attended,” said Rob Hackett, Burklund Distributors, Inc., East Peoria, IL. “I enjoyed the panel discussion and the information about what’s going on in Canada and what they have gone through. And the fact that they thought enough of our organization to come here and speak to us, speaks very well about AWMA.”

On the business side, Hackett added, “We have put more orders through this year than in past years. We got some really good deals.”

“This is the best looking show we’ve ever had,” commented AWMA Chairman Dunham as he paused at AWMA’s Resource Central.  “All of the manufacturers brought their best booths, and they’ve told me that they have had a great show.”

Dunham said his company brought 12 people to the EXPO. “They’ve had a fantastic time and got a great deal out of our meetings,” he said.

“I’m buying today,” Dunham added. “I think all of the other distributors are doing the same thing. They come to this show because it is a buying show. Hopefully, all of these manufacturers are offering show deals, and if they’re not, they should be.”

Raymond R. Tetu, CEO at Manchester Wholesale, said he found it to be very beneficial to spend time with vendors individually and gain in-depth knowledge about their products and services.

“This has been a very worthwhile experience,” he said.

$10,000 in Cash Prizes Awarded to Lucky Attendees
Three big cash prizes were awarded to EXPO attendees in the Exhibit Hall last Thursday and Friday.  Winners had to be present to win and the following lucky individuals were in the crowd when their names were drawn:

• $2,500 Winner:  Matt Moskwa, National Tobacco Company, Louisville, KY  
•  $2,500 Winner:  Charles “Bo” Worthy, Bahama Bo’s, Eclectic, AL
•  $5,000 Winner:  Greg Martin, Southern Association of Wholesale Distributors, Suwanee, GA

Silent Auction Donations Benefit AWMA’s Government Affairs Program
Many amazing items were donated for the Silent Auction at this year’s REAL DEAL EXPO. AWMA thanks all of the companies who generously supported this important fund raising effort.  In addition to the “big ticket” items (see below), gifts ranged from travel packages, vintage cigars and humidors to autographed sports memorabilia, jewelry, entertainment systems, clocks, and limited edition artwork and musical instruments! 

AWMA extends grateful thanks to ALL of the Silent Auction donors and purchasers.  Three “big ticket” donations deserve a special round of applause:

• Tax-Right and ProCat, along with R.E.D. Stamp, Inc. -- Offered Check-Right – a new scanning system offered by Tax-Right
•  R.E.D. Stamp, Inc. – Offered a CCU-6-12 Cigarette Case Cutter Unit – an automatic cigarette case cutter
•  ProCat – Offered PickRight – a wireless touch screen picking system

The funds raised through the Silent Auction will be used for the AWMA Day on the Hill, among other government affairs activities.

Special Thanks

2008 REAL DEAL EXPO Sponsors
We want to acknowledge and thank all of the REAL DEAL EXPO sponsors. AWMA and AWMA distributor members are grateful for the generous support of the following companies:

Altadis U.S.A.
Atkinson Candy Company
Conwood Sales Company, LLC
The Hershey Company
John Middleton, Inc.
Lorillard Tobacco Company
New Image Global
Philip Morris USA
ProCat Management Services, LLC
Red Stamp Inc./Tax-Right LLC
R.J. Reynolds Tobacco Company
Santa Fe Natural Tobacco Company
Star Scientific, Inc.
U.S. Smokeless Tobacco Company

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