NCGA Signs National Purchasing Agreement

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Our National Cooperative Grocers Association (NCGA) had much to celebrate at its General Assembly in Austin, Texas, this September. We welcomed new staff, commemorated developments in business services, and outlined plans for 2007. All of these were lead-ins to the most highly anticipated event in NCGA’s history: completion of our first national purchasing program for core cost of goods.

On the eve of that September General Assembly, the NCGA board of directors approved an agreement with United Natural Foods, Inc. (UNFI).

History
The ability to achieve lower costs was a primary driver in NCGA’s reorganization. Our members recognized that combining our purchasing power would allow us to negotiate better contracts than we were able to achieve regionally, improve supplier relationships, and demonstrate our ability to act as a cohesive group on common issues.

Development of a Co-op Advantage–branded packaging program was our first foray into national agreements. Despite the challenges of working with multiple vendors and a network of independent distributors, we proved we could achieve lower costs on value-added non-core supplies. Achieving similar benefits in our core costs was next.

A long road
Development of a national contract proved to be easier said than done. Balancing the varying interests of members with the interests of our partner, UNFI, all while maintaining confidentiality in the midst of the negotiation process added complexity. Turnover in NCGA leadership led to stops and starts in the process. But in the end, we all rose to the challenge.

NCGA members empowered a steering committee to work on their behalf. The steering committee provided input on contract issues and language, and in turn empowered the negotiating team, led by CEO Robynn Shrader, to act in the best interests of all members. NCGA’s management team was actively involved, providing input and working to ensure we had appropriate internal policies and agreements. UNFI displayed similar ­commitment, demonstrating a true spirit of partnership despite a protracted timeline.

Mutually beneficial
What resulted is an agreement that is truly a win-win. NCGA members benefit through overall lower costs and provisions that encourage growth in our sector. UNFI benefits through lower contract management costs and a system of accountability that decreases their financial risk. We both benefit from streamlined communications and a newly focused relationship that will serve us well in the years to come.
Yes, we have much to celebrate. We are ­succeeding at driving costs out of our sector and developing the mechanisms to better support members and realize our mission of ensuring thriving retail food co-ops: a great return on our members’ investments in developing a strong national association!

Up and coming at NCGA
Here are just a few of the activities we’re focused on, now and into 2007. You’ll hear more about them in future issues of Cooperative Grocer, so stay tuned!

_National prepared foods program—system­atic training and regional promotions to improve sales and visibility of this important ­department;

_Category management—launch of our custom SPINS database and development of recommended core sets for small, medium and large stores;

_Support our Success—focused resources to support struggling stores, expansions and new stores;

_New website—improved access to all things NCGA through redesign of our current site, as well as a new consumer site.

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Kelly Smith is director of marketing and communications for the National Cooperative Grocers Association ([email protected]).

See other articles from this issue: #127 November - December - 2006