FMI’s research with more than 120 grocery wholesaler stakeholders finds that reducing costs and improving margins require collaboration across wholesalers, CPG manufacturers, independent retailers and sales agencies.
By: Mark Baum, Chief Collaboration Officer & Senior Vice President, Industry Relations, FMI
Think about the last time your organization tried to improve a trading partner relationship unilaterally. Invested in better data. Redesigned for better business planning process or brought in new technology solutions. Perhaps it led to incremental improvement until some of the same or even new points of friction and/or inefficiency showed up somewhere else in the organization or trading partner relationship.
That is the pattern FMI heard from dozens of companies during a nine-month research initiative. More than 120 stakeholders, wholesalers, CPG manufacturers, independent retailers, sales and marketing agencies, and technology providers described a value chain where each party works hard and yet the whole system is still under optimized.
The reason is structural. Improving a product supplier, grocery wholesaler or independent retailer relationship does not work when only one part of the chain moves. FMI's new report, The Whole Picture, identifies five strategies that only deliver real results when wholesalers, manufacturers and retailers pursue them together.
Here is what that coordinated action looks like in practice.
Transparency around costs
Wholesalers do need to share more about how costs are structured. Manufacturers need to share investment plans. Retailers need to share growth objectives. None of that works as a one-way disclosure — it must flow in all directions.
Collaborative business planning
Ninety-two percent of wholesalers say they are working on end-to-end collaboration. But collaboration means something specific: aligned planning calendars, agreed-on metrics and a genuine willingness to adjust when the data says something is not working. That requires trust, and trust requires consistency from all sides.
Manufacturer ROI measurement
When manufacturers cannot measure the return on their wholesale investments, they pull back. Wholesalers, manufacturers and retailers each have a role in building the measurement infrastructure that fixes this.
Product and service innovation
Localized merchandising, new-item introduction and digital engagement: None of these scale when each party works from a separate plan. Synchronized calendars and shared data change that.
Skills, process and technology
The organizations leading in adjacent wholesale sectors — foodservice, pharmacy, ecommerce — did not get there by letting one party carry the technology load. They invested together.
"Adding value beyond supply chain is extremely important to compete with self-distributing retailers." — Wholesaler respondent
The FMI report The Whole Picture: What's Next for Wholesalers and Their Retailer and Manufacturer Partners includes specific tables for each stakeholder group for each of these five strategies. Wholesalers, manufacturers and retailers each get a starting point for internal and collective action. It all adds up to a whole value chain that is greater than the sum of its individual segments.
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