The saga began in April, when Food Distributors International (FDI), which represents wholesalers that mostly sell to smaller chains and independent stores, announced an alliance with the Food Marketing Institute (FMI), which represents nearly all the United States and global grocery store chains, plus major distributors. However, influential grocery chains (Safeway, Kroger, etc.) were already signing up for e-marketplaces that would also sell them actual merchandise, such as WorldWide Retail Exchange, Foodtrader.com, and Transora.com. These chains came to think building another e-marketplace with FDI would be redundant-and not always in their interest as retailers.
In May, FMI members voted to pull out of the alliance. FDI then cancelled the e-marketplace plans, which would have been too expensive and time-consuming for its membership. It was back to square one for FDI. “It’s been a lesson in association politics,” one official said candidly.
The competitive grocery industry already has thin profit margins. FDI members are worried that BtoB e-commerce directly between food manufacturers and grocery stores could cut them out of the loop. So now the association is building a package of four BtoB services that members hope will help them stay competitive. They are:
- A marketplace for trucking supplies and services;
- A job bulletin board, which FMI is helping with;
- The originally planned maintenance, repair, and operational (MRO) goods e-marketplace, though it will take longer to build; and
An e-marketplace special promotional goods and information.
This story of on-again, off-again alliances underlines the truism of how much faster business runs on Internet time. Every company, association, and entrepreneur is aware that business-to-business e-commerce offers huge gains in profitability and efficiency, but that no single model for success has been established yet.
Until then, they’re exploring as many channels as possible, as fast as possible. But The Yankee Group believes they’ll change plans just as fast if they don’t work out-sometimes before the ink is dry on the press releases.
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