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Globalisation in the food broker community has failed at the association level, yet in the company area there are signs that some global operators will be successful, and particularly in Australia. This assertion is based upon a review of the attempt by US broker association ASMC to set up an international division called ASMC-I after merging with the Canadian association CFBA, which has ultimately come to nothing which leaves the Canadian brokers now looking like they will have to regroup to address their domestic issues.

On the company level, a good local example of global takeover has been the purchase of Nationwide Food Brokers by Crossmark-Asia Pacific, one of the three large US sales agencies. Crossmark first entered the Australian market by way of a joint venture with Campbell Consumer Products to form Crossmark-Asia Pacific. This resulted in Crossmark representing the Campbells range of detergents and created a new entity in the Australian broker/agency segment.

Whilst the initial formation of Crossmark-Asia Pacific promised highly sophisticated technology, the venture did not win much business additional to the Campbells’ range that it commenced with. So, in 2001 it bought out Nationwide , with the owners, John Rishworth based in Melbourne and Warwick Ritchard in Sydney, both remaining with the business.
Nationwide was a strategic acquisition for Crossmark because it provided the right level of infrastructure as well as additional clients.

On the industry body front, ASMC ,the US body for brokers , merged with the Canadian Food Brokers Association[CFBA] and the Canadians became members of Association of Sales and Marketing International[ ASMC-I] A benefit of the ASMC-I set up was supposed to be a strong international broker division containing members from Canada, Australia ,South Africa and Europe.
These members would gain access to a global data base of retailer data and be kept abreast of global industry changes, and more importantly from a business sense, provide a referral list for US manufacturers looking to roll out into other markets.

For the Canadians, their domestic affairs were to become the province of a Canadian Juristictional Committee with little power and no veto over
ASMC in the US.
The plans by ASMC-I to offer special rates for members of the Australian and European associations to join it were unsuccessful. In fact some of the former members in both regions , many longstanding associate members of the old US National Food Brokers Association, have since cancelled their membership.

In the European market, ESMA, the European Sales and Marketing Association, has increased its profile and member services under its CEO Richard Onion. It has a high presence at the prestigious European trade shows and offers manufacturers a proven method of accessing the many diverse markets including the UK, EU and non EU countries.

ESMA members tend to be distributors rather than traditional brokers and gaining the rights to buy/sell in a particular country is gained on a one off basis. To date there has not been too many cases of firms setting up in multiple markets. Australian companies interested in contacting ESMA
with a view to product representation across Europe can do so via an email request to ABML.

Back to companies, and we do have another example in Australia of global merchandising businesses servicing the local market. Brands-on-Show [BOS] has never been operated as a true broker and offers the merchandising end of the sales requirement . Initially set up by local grocery industry identities, the business is now wholly owned by CPM of the UK which has a 75 year pedigree in providing merchandising services.
BOS has a number of supermarket clients including Dairy Farmers and GSK, but also merchandises Telstra products across channels and works for Columbia Tri-star in the Mass Merchant and Department Store segments

BOS runs a field team of 500 personnel with 300 of its team members equipped with the reporting system Mobile Link™ and having a number of staff not equipped with computer technology ensures that the hands on merchandising is addressed

The local broker community is still strong and there are many multinational manufacturers that choose to outsource in this country. These brand owners must select from mostly Australian owned businesses and do not have the luxury of realigning coverage with a ‘global broker’ The reason is that even the big three US brokers are not truly global and local market expertise is still important here in Australia. Since Woolworths moved to national buying, the local market for brokers and merchandisers has consolidated into a number of national companies and groups able to offer national service with a single point of contact so the market is well served and any further entry would need to be by acquisition or merger.

Of the big three US brokers, Crossmark is here and Advantage Sales has a global tie up with CPM, owners of the Brands on Show business. Accosta, the third member of this triumvirate, which called all the shots when the US association was forced to reorganise as the three giants took over many independent brokers to become national, is not yet here.

Over in Canada, the big three US brokers could be accused of taking out the most successful Canadian firms, and then lobby for a merger with the US association which has now failed. Of course nobody forced the brokers to sell out and the appeal of a common North American market approach to selling was also driven by the manufacturers The end result is that Keith Bray ,long time President of the CFBA who transferred to the American body upon the merger taking place, will cease working for the ASMC office at the end of 2003.

After 12 years running the broker body in Canada, it is just possible that Keith Bray might end up running a relaunched CFBA in some guise, but after the bitter pill of failure the chances of seeing global mergers at association level are unlikely to even get a mention.

Author: David Burton,
Executive Director, ABML

This article first appeared in Retail World. David Burton is a regular contributor to the magazine.