Randy Skoda, president and CEO of Topco—an Illinois-based cooperative owned by 53 retailers, wholesalers and foodservice companies—recently spoke with The Shelby Report during the Affiliated Foods Midwest Spring Show. Skoda spoke of the co-op’s successful business as well as his forecast for the remainder of 2012.
The show was hosted at CenturyLink Center in Omaha, Neb., on Friday and Saturday, March 9 and 10.
“We just completed our year at the end of December 2011,” Skoda said. “We had member purchases through Topco of $11.6 billion. We procure about 45 different brands, about 45,000 different SKUs. About half of those brands are member brands. The other half are actually Topco brands like Shurfine, Clear Value, Wide Awake Coffee and some of those.”
Affiliated Foods Midwest, a member of Topco since 2001, experienced the largest overall growth within the Topco membership last year based on purchases through the cooperative.
“…I think it’s because the brands and their focus on Own Brands is resonating with their consumers and with their member-owners,” Skoda said of Affiliated’s success.
“And, quite frankly, it’s right in our sweet spot,” he added. “If you look at who Topco is, who our owners are and hence who our customers are, they’re the independents. Some of them are large regional independents or they might be one- and two-store (operators) that are coming through a company like Affiliated. Those folks are integrated in their local community and really knowledgeable with their local customer, and what we try to do is help provide scale and programs that these great merchants can leverage in their communities.”
Martin “Marty” Arter, president and CEO of Affiliated Foods Midwest, says his group’s success is made possible through Topco.
“We as co-ops and/or large retailers across the country, we wouldn’t have the wherewithal to provide our retailers today with the economies of scale if we weren’t aggregating our volume through the Topco side of the business,” Arter said.
“With the economy the way it is, the co-op model—whether it be on the Affiliated side or the Topco side—that’s the model of the future,” Arter said. “It’s really taking care of your member-owners and then also positioning our retailers in a way that they can reinvest in their company because the dividends from Topco or the dividends from Affiliated go back directly to the members, not an outside party.”
Skoda looks ahead at 2012 as being a year for Topco to provide incredible value to its retailers and, in turn, consumers.
“We’re very bullish on it (the forecast),” he said. “Obviously, the economy is tough out there. We believe that we can provide real value for the consumers and help our retailers provide that value. Any money we can save the folks will really help those consumers and, quite frankly, private brands have really resonated with the consumers and they’ve figured out that these are great products and they taste good and they don’t have to feel bad about saving money. As a matter of fact, they want to save the money, so we’re very bullish.”
Folks like Arter are thankful for such gestures.
“We just appreciate Randy’s leadership in all the new services along with Top Source, the not-for-resale side of the business. If you’re not familiar with what we have to offer either through Affiliated or Topco, you’re missing the boat,” Arter said.
“We were fortunate enough at Affiliated Foods Midwest to receive the award for highest increase in percentage of growth at 21 percent, and as you can see by the show…there’s just a lot of activity over here.”
Show garners big turnout
Tim Myers, SVP of sales and operations for Affiliated Foods Midwest, told The Shelby Report last week that 2,500 members attended the show.
“It’s a spring show, so for the independent retailer, it’s kind of difficult to get them out of their stores and get here, but we have got one heck of a show going on today,” Myers said. “You can look around today and see the energy and activity that’s going on. We have 513 booths at the show. We have 150,000 s.f. Some of the areas that we’ve really addressed this year—we’ve expanded produce, bakery, deli meat and also our Own Brands.
Myers highlighted the show’s Market Center.
“That is the epitome of ‘co-op-etition.’ That’s in conjunction with Unified Grocers and Market Center with Affiliated Foods to bring specialty foods, Hispanic and seasonal, to our members, and it’s a great relationship between the two of us and is really worth the time. They have the capability, our members do, through Market Center, to order 22,000 SKUs of product for their stores, so it’s really a great opportunity, a great example of what co-op-etition looks like.”
Rob Wolf of Affiliated Foods Midwest discussed the group’s ACCESS program—the primary communication link between Affiliated Foods’ warehouse and the stores it services. He told a packed house last week about software releases coming soon.
“We provide all the members with a computer system and an order tablet system and we’re going to talk about some of the software that’s coming soon to help them make things easier every day at the grocery store,” he told The Shelby Report shortly before his presentation.
How does ACCESS assist supermarkets?
Wolf calls the Price Book software the “flagship program” for Affiliated and its members.
“Every week we send down 50,000 items into a database,” he said. “They have an interface where they can get to all of those items and they can do all kinds of filtering, sorting and look-ups, and can really just do everything they need to do. It’s our communication hub, too.
“All of our members, we’re sending all of our data to this computer system and we’re communicating back and forth with them through it.”