GMA IAR - January 2008

On November 16, Ahold confirmed the appointment of John Rishton as CEO of the international Dutch retailer. The selection sealed the short hunt for a replacement for Anders Moberg, who resigned from his CEO post in June 2007 to take up new challenges as the CEO of the Mahjid Al Futtaim Group.

John Rishton began his career in 1979 at Ford Motor Company and held a variety of positions both in the U.K. and in Europe. A British national of 47 years of age, Rishton had been chief financial officer at British Airways since 2001, taking up the position just days before the September 11 attacks.

He joined the airline in 1994 as financial controller in the United States, was appointed sales controller in 1996, operations controller in 1998 and commercial controller in 1999. Prior to British Airways, Rishton worked for Ford of Europe in various international executive positions between 1979 and 1994.

John Rishton, Ahold’s

new CEO since November
Photo by Ahold

His tenure as CFO at British Airways was considered to be successful as he was credited with the airline's Future Size and Shape initiative, which has seen the airline shed 13,000 jobs, reduce its operations at Gatwick Airport and dispose of low-price airline Go. During his time as CFO, BA’s net debts significantly improved, putting the airline's finances on a more even keel.

While at British Airways, Rishton displayed his financial acumen, demonstrating how to turn around a large business that was sliding into debt due to adverse market conditions. With creative cost cutting and restructuring moves, Rishton guided BA’s finances through a market highly troubled by the events of September 11, which created a hostile business climate for the aviation industry.

Rishton initially joined Ahold as chief financial officer in 2006 after a shock departure from his British Airways post. A number of reasons has been suggested for his BA departure, foremost of which was a much higher salary. Ahold was said to have paid him U.S. $2 million, compared to his U.S. $1 million salary at British Airways.

During his time as CFO at Ahold, Rishton was present during a critical stage in Ahold’s recovery program with the publication of the Retail Review in November 2006. The Review made a series of recommendations to accelerate sales growth across Ahold’s global retail businesses. It was the retailer’s most important strategic announcement heralding a new beginning following its recovery from the 2003 financial scandal.

Golden Goose: Ahold’s leading brand in the Netherlands, Albert Heijn, is John Rishton’s strongest asset.
Copyright: PlanetRetail

As CFO, Rishton oversaw several divestments, starting with the sale of U.S. Foodservice, Ahold’s largest contributor to U.S. sales and the unit that sparked the financial turmoil. In addition, under-performing retail units such as U.S. chain Tops Friendly Markets and the Polish operations were subsequently divested.

Rishton was a key part of other major developments shaping the company’s future course. Merger talks with Belgian retailer

Delhaize started, dragged on, were suspended, continued and then were finally dropped.

Apart from overseeing divestments, Rishton has had to deal with a fair amount of overhang from the financial scandal still lingering within the company and with its legacy that continues to plague the balance sheet. Taking on the top financial post of a company emerging from a troubled past shows a propensity for not being afraid to tackle difficult challenges. It also presented an opportunity to rise quickly if successful. Indeed, the appointment of Rishton as CEO appears to many observers to be his just reward.

With Rishton’s proven eye for dealing with financial burdens and freeing up capital, Ahold has the potential to become a very efficient company – exactly what the retailer needs to do in the competitive grocery sector. With Ahold's remaining operations in the U.S. and Europe characterized by tough competition and low profit margins, Rishton can draw on his experience at British Airways to generate a profit where little margin exists.

Ahold’s future holds further battles to increase sales growth in very difficult markets. In the U.S. same store sales at Stop & Shop and Giant Landover, its two key retail units, ranged between -1.2 percent and 4.4 percent in 2007. However, Ahold continues to perform well in its domestic market of The Netherlands with same store sales growth of up to 8 percent at its key Albert Heijn banner. Its Eastern Europe operations continue to be hit by high net losses within an increasingly competitive climate.

One to Watch: The performance of Stop & Shop will be crucial in determining Ahold’s future in the U.S. market.
Copyright: PlanetRetail

John Rishton has a lot of work to do lifting profit margins and driving sales growth if Ahold is to regain its status as an investment-graded company. To do this, low-price campaigns in tough markets, vertical and horizontal cost-efficient procedures across international operations and the possible sale of under-performing assets are all potential scenarios for the future.

Industry Affairs News

Environmental Sustainability

Sold-Out Environmental Sustainability Summits Opens Thursday

Registration was closed last week for the industry’s first-ever Environmental Sustainability Summit after conference attendance reached 525 – capacity for the host Washington hotel, according to GMA Senior Vice President for Industry Affairs Stephen Sibert.

“The response to this ground-breaking Summit has been phenomenal,” he said. “We have truly accomplished what we set out to do, linking business, government and non-governmental organizations in a united effort to reduce the ecological footprint of the industry and its supply chain. The summit boasts participation from the U.S. Environmental Protection Agency (EPA) and from its Energy Star Program, its Climate Leaders, its Green Supplier Network, its Green Chill Partnership. We also have participation from the U.S. Departments of Agriculture and Energy, more than 25 non-governmental organizations, plus leading academics and a record attendance by our manufacturers.”

The unprecedented meeting Jan. 17-18 at the Ritz Carlton Hotel headlines EPA Administrator Steve Johnson; Co-Founder, Chairman and CEO of Conservation International Peter Seligmann; Director of Yale Center for Environmental Law and Co-Author of Green to Gold Dan Esty; Director of the Carnegie Mellon Green Design Initiative Dr. Lester Lave; and Global Head of Citizenship and Diversity for KPMG International Lord Michael Hastings.

Sessions kickoff with a panel on Thursday on what a sustainable industry will look like from Coca-Cola Enterprises President and CEO John Brock, Campbell Soup Company President and CEO Doug Conant, President of Unilever USA Kevin Havelock, and Monsanto’s President of Food Traits and Executive Vice President of Commercial Acceptance Jerry Steiner. Conservation International’s Peter Seligmann moderates.

Another blue-ribbon panel on building bridges/partnering with non-governmental organizations features representatives from the World Wildlife Fund, Blu Skye Sustainability Consulting, the Environmental Defense Fund and the Rain Forest Alliance with Moderator Lettemieke Mulder, director of external affairs, corporate responsibility and NGO relations for Unilever.

A similar panel highlights partnering with government and features participants from the U.S. Department of Energy and various officials of the EPA, plus Jere Zimmerman, director, corporate environmental, health and safety for Molson Coors Brewing.

A conference wrap-up will be available online at the GMA Web site.

‘Building Partnerships’ Theme of GMA Sustainability Resource Guide
The GMA Environmental Sustainability Resource Guide to be released at the Sustainability Summit features valuable information for companies seeking to build partnerships in eco-sustainability programs.

The guidebook includes an overview of the GMA sustainability initiative, its leadership and principles team, and a progress report from its varied working groups. The second section contains a complete guide to governmental and non-governmental resources available, including organizations as varied as the Conservation Fund and the World Wildlife Fund, America’s Second Harvest and the U.S. Environmental Protection Agency and many more.

The guidebook’s third section features two case studies by IBM on water sustainability and on corporate responsibility and the transparent organization.

"The resource guide was built to reflect conference objectives of industry leadership and non-government organization and government engagement, plus to provide an industry sustainability tool kit,” guide coordinator Jonathan Downey said.

The Environmental Sustainability Resource Guide will be available on the GMA Web site by clicking here.

Advocating for the Planet: Environmental Sustainability Pays Off
GMA is among the very first associations leading an important segment of American business to commit itself to a comprehensive initiative to develop and implement environmentally friendly and sustainable policies for its member companies and its supply chain.

“GMA serves as a conscience and as a catalyst for better environmental stewardship in our industry, and it also serves as a impetus and a voice for our industry as we strive to preserve our natural resources for future generations,” Senior Vice President, Industry Affairs, Stephen Sibert said.

Sibert added some of GMA’s efforts have included:

Setting an overall vision and mission, plus a set of principles, that help solidify the energy and environmental priorities of member companies and the industry.

Publishing environmental sustainability case studies to arm member companies and partners with the tools needed to set up their own sustainability programs.

Building a platform to share best practices.

Creating work groups to develop clear metrics in the areas of packaging reduction and recycling, water conservation, energy efficiency and reduction of emissions.

Showcasing CPG leadership in sustainability practices and policies and providing a forum for partners (suppliers, customers, non-governmental organizations, academics and more) through the Sustainability Summit.

Involving the leading thinkers in our industry to come together to build better environmental sustainability priorities and programs.

Stressing the use of sound science and sound policies in environmental sustainability programs with an emphasis on self regulation.

“After the Summit, the sustainability initiative will continue to compile a compendium of retailer sustainability programs, its working groups will continue developing best practices and implementation metrics, and we will continue to build liaisons with customers, non-governmental agencies and other organizations,” Sibert added.

Sibert said the initiative owes a great deal to its environmental sustainability teams and work groups, including:
Leadership Team: Chair, Elliott Penner, President, Food Products, Reckitt Benckiser Inc..
Principles Team: Chair, Audra Karalius, Vice President, Environment and Safety, Sara Lee Corporation
Packaging Waste Recovery Workgroup: Chair, John Scott, Director, Responsible and Sustainable Sourcing, PepsiCo.

Water Workgroup: Chair, Kevin Mathews, Director, Health and Environmental Affairs, Nestlé Waters North America.
Energy/Climate Carbon Footprint Workgroup: Chair, Dennis Boik, Director, Environmental Sustainability, Hormel Food Corporation.

“In addition to our teams and workgroups, we want to thank all our members and our partners for making GMA’s environmental sustainability initiative so successful,” Sibert concluded.

GMA Presents at Bayer CropScience Meeting

GMA's Senior Vice President, Industry

Affairs, Stephen Sibert addressed the Bayer CropScience Industry Relations Meeting last month on GMA's and the CPG Industry's strategy on sustainability.

"GMA is pleased to be able to show its leadership on this issue with all parts of the industry, from agricultural to suppliers to customers and consumers." Sibert said.

Bayer CropScience is a GMA associate member company.

Contact: Stephen Sibert

Associate Member Council
Entry Submissions Deadline for GMA’s Expanded CPG Award Is Mar. 31

First CPG Award: 2004

Give your company’s imaginative, prototypal accomplishments a pat on the back this year. Plan now to enter the competition for the 2008 GMA CPG Award for Innovation and Creativity.

Two CPG Awards will be presented this year in honor of two member companies. Applications will be evaluated in two divisions: Division A: manufacturers with total sales of less than $1 billion, and Division B: manufacturers with total sales of $1 billion or more.

Deadline for submissions is March 31.

Submissions should emphasize leading the company/industry forward in the 21st Century and will be judged on creativity, risk-taking, achieving measurable results and creating a knowledge base for the entire industry.

Sponsored annually by the GMA Associate Member Council (AMC), the awards will be presented at the AMC’s Good Morning GMA session at the Executive Conference at The Greenbrier in June.

For more information, visit the Web site.

Contact: Jill Johnson

Supply Chain and Technology
IS/LD Conference Attracts Growing Numbers, Top Speakers, Sponsors

Attendance registrations keep climbing for the 2008 GMA Information Systems/Logistics Distribution (IS/LD) Conference to be held Mar. 30-Apr. 2 at the Westin Mission Hills Resort and Spa in Rancho Mirage (Palm Springs), Calif.

More than 350 attendees are expected at the conference, which is co-located with the Food Marketing Institute’s (FMI) Supply Chain Conference. Some sessions will be joint GMA-FMI sessions.

A bevy of outstanding speakers are being confirmed for the conference. One session details how manufactures and retailers can use virtual reality to follow a concept from idea generation onward. Mark Rhodes, leader of the Kimberly-Clark Corporation’s Virtual Reality Team, addresses the conclave at an 8 a.m. session Apr. 1.

Ellen Kitzis, Gartner Inc.’s research vice president and one of five people Optimize Magazine named as Most Influential Emerging Thinker in IT, profiles the IT Department of 2012 on Apr. 1. Ronald Volpe, customer vice president, global supply chain for Kraft Foods North America Inc., explores the culture of collaborative innovation into the end-to-end supply chain on Mar. 31.

Conference sponsors and exhibitors include Strategic Solutions Inc., IBM, CLS, Seber Logistics Consulting Inc., PRTM, Terra Technology, Oracle USA Inc., ORTEC, Retail Solutions and Microsoft Corporation.

GMA Conference Co-Chairs are Craig Hall, general manager/ice cream, Mars Snackfoods U.S. LLC, and Marc Brown, vice president and chief information officer, Del Monte Foods. Hannaford Bros. Co. Vice President Gerry Greenleaf serves as FMI’s Supply Chain Conference chairman.

Click here for a complete, up-to-date conference schedule of events and on-line registration information.
Contact: Jeanne Iglesias

Jan. 25 Deadline for Participation in the IT Investment, Effectiveness Surveys
Member companies are urged to participate in the 2008 GMA Information Technology Investment and Effectiveness Survey and the 2008 Logistics Survey, both of which will be released at the IS/LD Conference in March. Deadline: Jan. 25.

Complete the IT investment survey online using authorization code “GMAITSpend.” Department heads are urged to complete the effectiveness survey online using the authorization code “GMAITEffect.” The logistics survey can also be completed online using authorization code "GMALogistics2008".
Contact: Jeanne Iglesias

Sales and Sales Promotion

Sales Vanguard Group Meets at FMI’s Mid-Winter

GMA CEO Cal Dooley (L) meets Denise Morrison, president - North America soup, sauces and

beverages, Campbell Soup Company, and

Jim Keller, senior consultant, Catalina Marketing.

The GMA Sales Vanguard Group met Jan. 12 at FMI’s Midwinter Executive Conference. Agenda items included GMA’s efforts with FMI and the New England Consulting Group on the joint-industry product recall project, updates on GMA’s sustainability efforts and promotion of the latest new ways of working together pilot programs. McKinsey and Company briefed the group on

2008 Customer and Channel Management Survey which will be released this spring.
Contact: Brian Lynch

New Coupon Barcode Guidelines Goes Into Effect This Month

The Joint Industry Coupon Committee (JICC) recently issued its first coupon guidelines update in a decade. The North American Coupon Application Guidelines Using GS1 DataBar (RSS) Expanded Symbols is available to GMA member companies at the GMA We b site.

The implementation of the new coupon coding system goes into effect this month and will be phased in over the next two years, with the first step being the printing of the new data bar by the side of the original U.P.C.-A barcode on coupons. The U.P.C.-A barcode will be fully obsolete in 2010, according to JICC Co-Chair Don King, associate director of retail marketing services, The Procter & Gamble Company.
Contact: Troy Beeler

Customer and Channel Collaboration
Wakefern’s Sheridan Stresses Reclamation Center and Food Safety Recall Connection

Wakefern’s Joe Sheridan

Reclamation centers today are the infrastructure through which the seemingly ever-increasing numbers of food and grocery recalls are handled, according to Executive Vice President Joe Sheridan of Wakefern Food Corp, the largest retailer-owned cooperative in the United States.

“The reclamation system is the infrastructure to handle the (food safety) reclaims,” Sheridan explained to the fall meeting of the GMA Industry Affairs Council, noting that current food safety recalls must be accomplished faster and faster. “There is no standard recall protocol that is adhered to in the industry,” the member of FMI’s Wholesale Advisory Board said. “We had approximately 111 recalls last year, of which

approximately 13 were Class One.” He said for such a recall, product is immediately removed from the shelves and blocked out in the front-end scanners. Then the database is accessed, and all customers who bought this product during a certain time period are called, with consumers generally returning product over a three week period.

“The reclamation centers allow us to get the product out of the warehouses and stores after each of these sweeps and into a central location for disposition with the supplier,” he added.

Sheridan said that with more and more suppliers using swell allowances, many of the industry’s reclamation centers are in economic peril. “But when a food safety issue comes along, we get hit on the chin because there is no built-in infrastructure to deal with the recalls,” he said.

Noting that reclamation centers are not just for unsaleable products, he said they also are used for manufacturer-discontinued items and items culled through collaborative category management processes."

Sheridan urged the industry and its associations to accept a principled approach to the issue and to understand that reclamation centers play a key role in regional and national food safety recalls. "It's our perspective that without a reverse logistics process that includes a reclamation center, the industry will not be able to handle the food safety recall issue," he pointed out.

He noted that in this regard, FMI had begun a study on the industry’s reclamation system and infrastructure, and the results are expected to be released in the spring.

GMA Leadership Profile

Leadership Profile: PepsiCo’s John C. Scott

Current Position
PepsiCo: Director, Responsible and Sustainable Sourcing, oversees corporate social responsibility and resource conservation programs that extend beyond PepsiCo’s operations and involve partnerships with suppliers.

Industry Leadership
- GMA: Chair, Sustainable Packaging Work Group
- GMA: Former Chair of Associate Member Council’s inaugural CPG Award for Innovation and Creativity
- Council of Supply Chain Management Professionals (CSCMP): Former President of New York City chapter/roundtable
- SEDEX: Board Member of Not-for-Profit Supplier Ethical Data Exchange
- AIM (European Brands Association): Vice Chair of the PROGRESS initiative (PROGramme for RESponsible Sourcing)

Career Highlights
Joining PepsiCo three years ago, Scott has been primarily focused on transformational and sustainability strategies within its global procurement organization. At PepsiCo, sustainability efforts – under the company’s “Performance with Purpose” vision – certainly include environmental efforts (i.e., energy/water conservation and packaging optimization), but it also includes sustainability programs focused on the evolution of its product portfolio to address increasing health and wellness concerns as well as efforts to attract and retain a sustainable workforce.

Starting with a career in field sales at Nabisco, Scott has grown up in the food and beverage industry, moving through the disciplines of sales, customer logistics, supply chain, manufacturing, IT and procurement. He has also had the opportunity, through consulting, to work with a broad spectrum of CPG firms (Kraft Foods, Masterfoods, Sara Lee, etc.) and other organizations that work closely with the CPG industry, such as the Department of Homeland Security.

Personal
Scott lives with his bride of 12 years, Rachel, in Brookfield, CT. He still plays lacrosse in a league for the “aged and out-of-shape” when not helping Rachel manage their vegetable and cutting-flower garden.

Education
Primary/Secondary: West Babylon, NY
Undergraduate: Cornell University, B.S.
Graduate: NYU, Stern School of Business, M.B.A.

First Job
“Delivering newspapers and mowing lawns. These two great jobs for young workers that provide early experience in managing money, developing customer relationships and entrepreneurship, are now sadly dominated by adults.”

Philosophy about Success at Work
1. “ Make your own luck.

‘I'm just a lucky slob from Ohio who happened to be in the right place at the right time.’
- Clark Gable

“While I’m not from Ohio, most of the time I believe Clark Gable’s quote applies to my work experience. It can never be stated too often: Being prepared, aware of what is occurring broadly throughout the industry and ready to help the organization face new challenges can look like luck to many, but it is not. It is hard to imagine that an industry of soaps, sodas, snacks and sweets can change constantly, but it does and provides opportunities for those who realize it is changing. Otherwise, you may subscribe to the alternate theory:

‘I believe in luck: how else can you explain the success of those you dislike?’
– Jean Cocteau

2. “Take risks, move forward, but remember your roots.

‘Even if you're on the right track, you'll get run over if you just sit there.’
-Will Rogers

“Early on, I chose to leave a field sales position to join the customer logistics department managing a local distribution center. To many it seemed like a bizarre choice, but a seasoned, gristly old district manager who mentored me was a big supporter of having sales experience in other parts of the supply chain. However, he thought it would only be worthwhile if I brought a different perspective to the role. Otherwise, everyone was wasting their time and I wasted the experience in that sales organization. It is a useful perspective today, as the link between sales, operations, procurement and R&D are more important to customers, suppliers and other stakeholders than ever before – especially in the area of sustainability. It can be a confusing topic to understand and discuss, as many people have different vantage points. Understanding these different viewpoints can bring more clarity of purpose, and makes being part of PepsiCo enjoyable because of its long-term commitment to sustainability initiatives on many levels.

3. “Show humility, but don’t get pushed around.

‘Oh…Isn’t he the little prince….’
– My Grandmother

“In many ways, a splash of cold water can be helpful too. My mother recounted a story about a (probably) bratty little boy getting his way 30-or-so years ago without much regard for others. While no longer a behavioral issue for me (hopefully) and while it may be hard to be replaced in someone’s heart or mind, it is probably easier than you’d want to think it is to fill your position. Remember that it takes a team to get things done for most organizations, with a variety of leadership types and roles pulling together.

4. “Treat everyone the same: with high expectations.

‘Whether you are a First Team All-American or last player on the bench, he treats us all the same…like dirt.’
- Bob Rule, All-American lacrosse goalie on
Hall of Fame coach Richie Moran

“My athletic career was as a middle-of-the-pack player in college, but I was fortunate to play for a great coach at Cornell. While the quote above has some humor to it, it is meant to reflect an environment where everyone has high expectations and a belief that you could achieve these expectations through hard work and practice. Everyone was expected to be better; as a player, as a teammate and as a person.

“Whether you’re the boss or newly hired, creating an atmosphere where people expect to succeed leads to success. Having some stretch goals that seem unachievable is the way to achieve big things. I’ve been fortunate to see PepsiCo set some seemingly impossible resource conservation goals (energy reduction, packaging optimization, etc.) and then watch those teams chip away at it until it seem inevitable. Without bold goals, it will not happen

“In closing, the best thing to remember is that the companies of GMA's industry are fun. The products we make provide nourishment, good health, enjoyment, convenience and employment to millions of consumers and employees worldwide. Even as we vigorously compete and often collaborate, the best way to keep sane is to have a good sense of humor about it all.”

Datebook

Jan. 17 - 18	Environmental Sustainability Summit The Ritz Carlton Washington, D.C. Contact: Stephen Sibert, Liz Cookson
Jan. 30 - 31	Joint industry Unsaleables Leadership Team Doubletree Hotel Tampa Westshore Airport Tampa, FL Contact: Troy Beeler
Mar. 30- Apr. 2	Information Systems and Logistics Distribution (IS/LD) Conference Rancho Mirage (Palm Springs), CA Contact: Jeanne Iglesias, Liz Cookson
June 6 - 8	GMA Executive Conference The Greenbrier White Sulphur Springs, WV Contact: Mary Olsen

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