Real Deal Expo 2005 Updates

February 25, 2005

Analyst Says Outlook is Bright for Tobacco Industry Despite Challenges

Wall Street analyst Bonnie Herzog, of Smith Barney, told distributors Friday morning that "current industry fundamentals are the best they’ve been in over two years for the major cigarette manufacturers."

Speaking at the closing general session of AWMA’s 2005 REAL DEAL EXPO, Herzog said some "pricing power" has returned, leading to higher margins, while deep discount category growth is continuing to decelerate.

WDS Showing Large Sales Increases

The AWMA-sponsored Warehouse Delivered Snacks program is off to a strong start and it’s time for industry to reap the benefits of increased sales and profits, said Kit Dietz, president of Dietz Consulting, in a roundtable discussion with REAL DEAL EXPO attendees.

Buyers Air Concerns

Extra chairs were needed Friday morning for a roundtable led by Mike Anderson, director of purchasing, The H.T. Hackney Company, due to the popular topic – Distributor Buyers: A Discussion of Issues. It was practically standing room only as buyers gathered to share common areas of concern and possible solutions.

There was no shortage of topics as buyers discussed schedules and deliveries, late fees, promotions, allowances, dual surcharges, and disclosure funds. One attendee was complimentary of Anderson as moderator, saying he did a "wonderful job leading the session."

Bioterrorism Rules Impact Distributors

The new bioterrorism rules implemented by the Food and Drug Administration (FDA) will certainly impact distributors by requiring record keeping and trace back systems, but some distributors say it really isn’t that big of a deal.

Brian Conley of B&W Wholesale said it’s a matter of "adding a few fields to a software program that most distributors already have in place."

Under the new rules, large distributors must comply by December 2005; everyone else, except very small companies (10 or fewer employees), must comply by June of next year.

Great Deals at REAL DEAL EXPO! Top Prize Winners, Too!

Not only did wholesale distributors from across America make great contacts and renew business relationships at AWMA’s 2005 REAL DEAL EXPO in Las Vegas, but many took advantage of terrific show deals and uncovered new products and business opportunities for their companies. On top of that, some lucky attendees won great prizes—including a $5,000 check taken home by Carolyn McIntyre, Jackson Wholesale, Jackson, KY.

"Oh my God, I’m shaking all over," Carolyn said as her husband, Dan, the company’s president, looked on. "You almost made me pass out," he laughed.

Getting the Most Value Possible Out of Your Business

Some important advice for distributors considering a sale of their business was offered during a roundtable discussion Friday morning by Paula Charles, president, Abraxas Business Services, which specializes in providing merger and acquisition services to private business owners. Charles noted that companies often do everything possible to minimize taxes, but in doing so, she said, the value of the business can also be significantly reduced. "Consistency in financial statements is very helpful," she said.

Distributor Profitability: The HIPA Report

Al Bates, president of The Profit Planning Group, discussed the results of the most recent Hershey Industry Performance Analysis (HIPA) Report, which measures crucial business operating factors for distributors.

Among the advice he offered to distributors was to find ways to control expenses, while growing sales. Today, he estimated, a distributor needs to be at least $50 million in annual sales to be profitable.

"It’s no longer nice to be $30 million," he said. "Economies of scale are very, very crucial."

The Do’s & Don’ts of Working With Your Banker

Don Tyson, vice president and senior business advisor, PNC Bank, Berwyn, PA, advised distributors to build a solid relationship with their bankers. "It is an asset for your business that you need to invest in," he said.

Tyson said credit is the "lifeblood" of a business, and that 85 percent of credit comes from banks. "Sound communication with your banker can help smooth the way for credit needs," he said.

2005 EXPO Called "A Resounding Success" by CEO Scott Ramminger

AWMA President and CEO Scott Ramminger said he "couldn’t be more pleased" with the response of suppliers and distributors to this year’s REAL DEAL EXPO, and urged everyone to prepare for a repeat performance next year in Las Vegas, NV.

The 2006 show will be held March 15-17, once again at the Las Vegas Hilton.

"We had more than 2,000 attendees after a brisk walk-up registration," Ramminger said, "and that was after our pre-registration was up 30 percent over last year."

February 24, 2005

New AWMA Chairman Takes Gavel, Outlines Progress and Focus for 2005

The 2005 AWMA REAL DEAL EXPO got off to a flying start in Las Vegas, NV Thursday morning when 2004 Chairman Pat Carrico, Richmond Master Distributors, Inc., South Bend, IN, turned over the gavel to Steve Shing, the new chairman for 2005, during the convention’s opening session.

Carrico was commended by Shing for his leadership, and given gifts of a flag that flew over the U.S. Capitol, an engraved watch, and a plaque symbolizing his chairmanship.

Former NFL Coach Don Shula Commends AWMA Members for Efforts to Learn

The National Football League’s winningest coach, Hall of Famer Don Shula, presented the keynote address at the REAL DEAL EXPO’s opening session Thursday morning, commending AWMA members for seeking to learn and improve their ability to perform as business executives and leaders.

"By being here you are trying to be better at what you do, and that’s so, so important," said Shula, the only NFL coach in history to lead his team to an undefeated season and to then win the Super Bowl, one of six in which he was the head coach.

Opportunities for Boosting Candy, Snack Sales Outlined for Distributors

There is a huge opportunity to boost single-serve snack sales, including candy, according to a new study by Masterfoods USA and the William Wrigley Jr. Company, distributors were told Thursday morning.

In fact, according to Linda Lieberman, senior director, sales planning for the convenience and drug channels at Masterfoods, there is an opportunity for convenience stores to generate $1 billion more in confectionary sales simply by using off-shelf merchandising and end-caps for candy and gum products.

Health, Convenience and Taste Cited as Major Drivers of Increased Candy Sales

Given the nation’s concern about nutrition, health and obesity, the candy industry can expect increased sales of products that can truthfully make positive health-related claims, EXPO attendees were told Thursday morning by Lawrence T. Graham, president of the National Confectioners Association.

"We’ll see a lot of growth in the healthiest products," Graham said during the opening session. "The big three will be health, convenience and taste."

On the Show Floor: "We’re doing business here!"

"It has been good. There are a lot of people here who make decisions who have come by to see if we can help them. And in many cases we can. So it was worth our while and theirs to be at this show."

That was the comment of Warren Love, vice president, central region, Integrated Distribution Solutions (IDS), Ann Arbor, MI, about midway through the first day of the 2005 AWMA REAL DEAL EXPO. The show floor was busy and thriving with action as distributors, manufacturers and suppliers connected to do business.

Snack Food Association Co-Sponsors EXPO, Suppliers Network With Distributors

For the first time, the Snack Food Association co-sponsored the REAL DEAL EXPO this year, bringing some 20 manufacturer members to exhibit and providing them with an opportunity to sell directly to distributors.

"This is a great opportunity for our members to meet with wholesale distributors," said SFA President and CEO James A. McCarthy. "They have been able to showcase their products, and are excited about the great contacts they are making. We look forward to continuing a close working relationship with AWMA and its members."

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