Food Distributors International (FDI) and the Food Marketing Institute (FMI) today agreed to form a business-to- business online exchange for non-consumer goods and services. This service is designed for FMI's and FDI's foodservice and wholesaler members, along with the retailers they serve, including independent operators. Together the two trade associations and their retail, wholesale and foodservice members represent the approximately $800 billion North American food industry. As part of the strategic business plan, broader applications within the industry will be developed after discussions with the global retail exchanges now being formed.

The two associations plan to launch the site later this summer. FMI and FDI have selected IBM as their solutions coordinator. IBM will manage the activities of the alliance partners, including i2 Technologies, Inc. (ITWO), and Ariba, Inc. (ARBA), as well as participation of viaLink Co. (IQIQ), and the Ernst & Young consulting company. Collectively, this group currently operates in excess of 150 Internet exchanges across multiple industries.

"E-markets are exploding. This alliance between FMI and FDI gives its members the opportunity to use Internet technologies to create new cost structures, to open new distribution channels, to transform competitiveness and change the industry," said Christian Nivoix, general manager, IBM's distribution sector, the part of IBM focused on the retail and consumer goods industries. "That's the real impact of the Internet," Nivoix said.

"We see this as a dynamic electronic marketplace for our industry," said FDI President John R. Block. "It will enable us to deliver at Internet speed the B-to-B E-commerce, education and communications services that our members need."

FMI's President and CEO, Tim Hammonds, added: "We believe this set of technology partners will enable us to deliver state-of-the-art Internet buying fully integrated with logistics services, coordinated backhaul, and cooperative planning, forecasting, and replenishment."

"In other words," added Hammonds, "the Internet buying function is only the beginning. The real payoff comes from integrating the total supply chain."

Both FDI and FMI believe that all those who are developing Internet services for the grocery industry should make every attempt to develop common standards for the underlying technologies whenever possible. The two associations intend to coordinate their efforts with the Uniform Code Council (UCC) to adopt any applicable standards developed by UCC.

FDI and FMI are establishing a joint association working group of their retail, wholesale and foodservice members to steer this effort. FMI and FDI also said they are inviting other associations that are developing network services for their members to explore a coordinated trading exchange.

Food Marketing Institute (FMI) is a nonprofit association conducting programs in research, education, industry relations and public affairs on behalf of its 1,500 members including their subsidiaries -- food retailers and wholesalers and their customers in the United States and around the world. FMI's domestic member companies operate approximately 21,000 retail food stores with a combined annual sales volume of $300 billion -- three quarters of all grocery store sales in the United States. FMI's retail membership is composed of large multi-store chains, small regional firms and independent supermarkets. Its international membership includes 200 members from 60 countries.

Food Distributors International (FDI) is an international trade association comprised of food distribution companies that supply and service independent grocers and foodservice operations throughout the United States, Canada and 19 countries. The association and its foodservice partner, the International Foodservice Distributors Association (IFDA), have 242 member companies that operate 820 distribution centers with a combined annual sales volume of $167 billion. IFDA represents member firms that annually sell over $44.3 billion in food and related products to restaurants, hospitals and other institutional foodservice operations.