Food Industry Tackles Unsaleables Problem

Food manufacturers and their distributors are teaming up to remedy a $4 billion a year and growing unsaleable-products problem. Twelve manufacturers and four distributors have launched an effort to examine supply-chain and business practices linked to unsaleables (products removed from the primary distribution channel). The joint project is being led by a Grocery Manufacturers of America (GMA) committee. The joint effort will see four project teams conduct comprehensive site visits to local sales offices, manufacturers warehouses, distributors warehouses, stores, and reclamation centers to look for problems. They will examine package and case design, pallet conditions, unit loads, production and warehousing equipment, handling practices, billing, and reimbursement practices. Findings will be released in the spring. "By the end of this process, we'll have a solid road map developed for manufacturers and distributors to develop partnerships to reduce the burdensome cost of unsaleables," says Hugh Farrington, president and CEO of Hannaford Bros. Co., a retailer participating in the project. Participating manufacturers are The Clorox Co., ConAgra Inc., General Mills Inc., Kraft Foods, Lipton, MARS Inc., The Minute Maid Co., Ocean Spray Cranberries Inc., The Pillsbury Co., Playtex Products Inc., Ralston Purina Co., and S.C. Johnson & Son Inc. According to the GMA, traditional supermarkets and chain drug stores show a much higher incidence of unsaleable products compared with alternative channels such as discount and club stores.