In an historic move, 49 of the world’s leading food, beverage, and consumer products companies have joined forces to announce the formation of the largest business-to-business (B2B) e-Marketplace for their industry – Transora.com.
The new company will be the first of its kind owned by the consumer products industry – its new investors are some of the world’s best-known companies, including The Coca-Cola Company, Diageo PLC, The Earthgrains Company, Kraft Foods, Inc., The Procter & Gamble Company, Sara Lee Corporation, and Unilever, NV. In total, 49 food, beverage, and consumer products companies, representing more than $500 billion in annual sales, committed nearly $250 million to fund Transora.
Transora will enable consumer products companies across the world to streamline business transactions with their suppliers, buyers and distributors via the Internet. Investor companies account for approximately $350 billion of the $900 billion annually spent by the industry on goods and services to operate their businesses.
“The sheer number of companies coming together is unmatched in the B2B marketplace arena,” said Judy Sprieser, Executive Vice President, Sara Lee Corporation and Chairwoman of the steering committee that led the exploratory phase of the Transora initiative. “It has been truly remarkable to witness an industry come together so rapidly to create a vision for transforming our current business practices. We are well-financed and strategically positioned to shape our own destiny in a way other B2B exchanges cannot. With this venture, old economy companies are becoming new economy leaders.”
Services and Solutions
Transora’s services will span the entire supply chain, from suppliers to manufacturers to retailers, and provide procurement, vendor and product catalogs, online order management, supply chain collaboration and financial services. Moving at “Internet speed,” the new company will roll out its first service offerings – procurement and a product catalog – in the fourth quarter of 2000, supported by pilot transactions already underway. The company’s goal is to provide other more strategic services, including collaborative planning, forecasting and replenishment between manufacturers and retailers, in 2001.
“Just as its name suggests, Transora will dramatically transform the way this industry conducts business,” said Stephen David, CIO, The Procter & Gamble Company and Board member of Transora. “Conducting transactions electronically on a common platform with shared standards will provide tremendous value to the entire supply chain. Simply put, it will increase the overall quality of service we deliver to our customers.”
“A key benefit of our services will be in improving the speed and liquidity of transactions for participating companies,” said James Chestnut, Executive Vice President, The Coca-Cola Company and board member of Transora. “Transora will offer a single connection to a broad array of services and exchanges on the Internet, providing ease of connectivity and associated cost-efficiencies.”
Foundation and Funding
In March 2000, e-business executives from leading consumer product manufacturers met in New York to exchange ideas about e-commerce challenges and opportunities. These representatives began exploring the idea of creating an industry e-Marketplace and a steering committee was appointed to lead the project. This committee, working with PricewaterhouseCoopers, appointed work teams and gathered input from more than 80 consumer products companies to formulate a business plan for a new e-Marketplace.
“The speed with which these companies have come together, and the financial commitments they have made clearly demonstrate the value of an industry-owned and operated global trading network,” said C. Manly Molpus, President and CEO of The Grocery Manufacturers of America. “Having been involved from the very beginning, we’ve seen first-hand how committed the industry is to this new marketplace – it’s truly a strong indication of Transora’s future success.”
In early May 2000, a business plan was adopted and potential equity investors from within the industry were sought to fund an independent entity that would operate the e-Market. In less than a month, 49 consumer products companies committed nearly $250 million dollars to fund the venture. This funding will be sufficient to build the infrastructure and fund start-up operations for the new company.
Benefits Around the Globe
By streamlining supply chain transactions and connecting thousands of trading partners, Transora benefits multiple players. Suppliers gain access to a much larger customer base and reduce customer acquisition costs; manufacturers benefit from improved customer service with retailers and wholesalers; and retailers and wholesalers can simplify their ordering process and improve order accuracy. All participants in the supply chain will benefit from increased connectivity, enhanced automation and improved inventory management.
“With the Internet’s borderless connectivity, Transora transcends global boundaries,” said Paul Walsh, Group Chief Operating Officer, Diageo PLC. “Economies of the world continue to draw closer together, and our companies increasingly rely on businesses and markets that lie across international boundaries. Transora provides the common marketplace in which our companies can transact and manage business, seamlessly and efficiently.”
Appointment of Board
The Board of Directors of Transora are: Barry H. Beracha, Chairman and CEO, The Earthgrains Company; James E. Chestnut, Executive Vice President, The Coca-Cola Company; Calvin J. Collier, Esq., Senior Vice President, General Counsel and Corporate Affairs, Kraft Foods, Inc.; Stephen N. David, CIO, The Procter & Gamble Company; R.H.P Markham, Strategy and Technology Director, Unilever NV; Charles A. Phillips, UDV North America. Diageo PLC; and C. Manly Molpus, President and CEO, The Grocery Manufacturers of America, who is an ex officio board member. An additional three outside directors will be chosen at a later date. A CEO search is underway and an announcement is expected in the near future.
“Transora is committed to an open, standards-based, industry-led, global exchange that delivers breakthrough value to all our stakeholders,” said Sprieser. “With the guidance of our distinguished Board, the support of strong partnerships and the dedication of the world-class team we have begun to assemble, we expect to fully deliver on that commitment.”
The following companies have invested in Transora and represent a significant transaction base for the e-Market:
Bon Ami Company
Bristol-Myers Squibb Company
Busch Investment Corporation (Anheuser-Busch Companies, Inc.)
Bush Brothers & Company
Cadbury Schweppes PLC
Campbell Soup Company
The Coca-Cola Company
Coca Cola Enterprises
Danone Foods, Inc./The Dannon Company, Inc.
Eastman Kodak Company
The Earthgrains Company
Fort James Corporation
General Mills, Inc.
The Gillette Company
H.J. Heinz Company
HC Crown Corp. (Hallmark Cards, Inc.)
Hershey Foods Corporation
Hormel Foods Corporation
The J.M. Smucker Company
Johnson & Johnson CCI
Kraft Foods, Inc. (an operating company of the Philip Morris Companies Inc.)
McCain Foods LTD
McCormick & Company, Inc.
Morton International, Inc.
Nestle Holdings Inc.
Parmalat USA Corp.
The Pepsi Bottling Group, Inc.
Perdue Farms Incorporated
The Procter & Gamble Company
The Quaker Oats Company
Ralston Purina Company
Reckitt Benckiser PLC
Rich Products Corporation
S.C. JOHNSON & SON, Inc.
Sara Lee Corporation
Wm. Wrigley Jr. Company
Transact on Transora
Transora, whose prefix “trans” means crossing or movement, is used as the root of words such as transact, transform and transcend. “Ora,” derived from Greek origins, means boundary and can also suggest an opening or entrance.
“Our vision was to create an exchange that will transcend the traditional boundaries of the marketplace,” said Betsy Cohen, Vice President, Ralston-Purina Company. “The name `Transora’ captures this vision.”
Webcast presentation available on http://theater.talkpoint.com/starthere.asp?pres=10396 Call-in Number: (888) 255-8210 (Live presentation at 2:30 PM Eastern Time. Replay available after 4:00 PM Eastern Time.)