Inside This Issue - News
June 18th, 2012
DALLAS – Working with a diverse group of suppliers that includes women- and minority-owned companies makes good business sense, according to the participants in a panel discussion at the recent FMI 2012 conference here.
For one thing, it can provide products and insights that allow a retailer to better serve an important and growing part of its customer base.
James Sturgis Jr., director of supplier diversity and trade relations at Ahold USA Retail, pointed out that recent census data shows that minorities represent the fastest-growing segment of the U.S. population.
"It also happens that minorities spend more on groceries than the general population, typically because they have larger families, and they eat at home more often," he said. "So why wouldn’t we want to engage that community and turn them into our loyal customers? And since 70% of the shoppers in our community are women, why wouldn’t we want to engage with that segment of the community as well?
"This is an outreach effort that helps us build a relationship with these communities."
Sturgis said his job is to engage certified minority-owned, women-owned and locally owned businesses and provide them with opportunities to do business with Ahold USA.
"Nobody gets business with us simply because they are a minority- or woman-owned business, or a locally owned business. They still have to compete on price and quality, and they certainly need to have the scale to serve us. And when we talk about locally owned businesses, there has to be some sort of relevance."
Denise Thomas, director of corporate supplier diversity at Kroger Co., said that any retailer or wholesaler interested in starting a supplier diversity program should make sure that it is aligned with the company’s business strategy.
"And no supplier diversity program will be successful if the CEO and top management do not support it," Thomas noted. "They have to talk about it, they have to get out there, and they have to say it over and over again. It has to tie in with the values of the company.
"Our values include diversity and inclusion. Those are the type of things I talk about every time I go out to our buyers. Of Kroger’s six values, two are diversity and inclusion, and I make sure I keep reminding them of that."
Sturgis noted that supplier diversity programs can yield benefits beyond helping a retailer better serve its diverse customer base. Finding suppliers based in the communities its stores serve can help improve the economic health of those communities, he pointed out, which in turn can boost the store’s performance.
Also, smaller minority- or women-owned businesses can often be more nimble than giant corporations, and sometimes more innovative as well.
As an example, Sturgis cited a product carried in Ahold stores that was developed by a small, woman-owned company. The product — called ECOzip — is a recyclable plastic bag with a zippered seal on both ends, and another in the middle.
"So you can put your kid’s sandwich in one side, and you can put his carrots in the other side," Sturgis said. "Some people will take the gallon-sized bags, and they’ll put the salad in one side, put the dressing in the other side and take it to work. When they’re ready to eat it, they open the middle zipper, shake it up and, boom, the salad is ready and nothing is wilted.
"It’s a great product, and we were the first to put it on the shelf. It’s an example of being first to market with something, and that’s the opportunity. If nobody was looking for these kinds of companies, who knows if this great product from a small, woman-owned business would ever have made it on the shelf?"