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Pundit’s Pulse Of The Industry — Willard Bishop Consulting’s Bill Bishop

Jim Prevor’s Perishable Pundit, May 22, 2007

Earlier this year Willard Bishop, well known as a food industry consultancy, announced a management transition in which Bill Bishop was giving up day-to-day managerial tasks to focus on providing strategic guidance and thought leadership for the firm’s clients and the industry at large.

Bill Bishop has really been an institution in the industry, and we asked Pundit Investigator and Special Projects Editor, Mira Slott, to find out more.

Bill Bishop
Founder and Former President now Chairman of Willard Bishop Consulting
Barrington, Illinois

Q: Could you tell us more about the management transition?

A: What’s happening here is that our new partnership puts a new generation of consultants in charge of driving and really growing the business. My role is two-fold; to provide strategic direction within the organization and to continue industry consulting as I’ve done. I will maintain a significant presence in thought leadership. Up until January 1, I had also been responsible for managing the business. The best way to grow the business is by separating these functions.

The other aspect is that I’ve been in the business 30 years, and there’s the conflict of getting older and the bittersweet reality of planning a transition very thoroughly and gracefully. Frankly we had three options. The first two, to sell our business or let it run down as I decided to back off, weren’t attractive. My primary motivation in the restructuring is doing everything possible to perpetuate an environment in which we’re operating to meet the changing world ahead of us. We’ve been working on this plan for three years.

Q: Will there be any major strategic shifts from the way you’ve done business in the past?

A: The world is changing and while we’re comfortable in coping with these changes, we also wanted to move the company in new directions to meet emerging trends. We are in the process of taking the research and insights that are generated from our studies to the next stage. We will place more emphasis on organizing that information into actual consulting projects to help clients implement those findings. Our origins were developing fact-based information and generally leaving it to people to interpret and apply.

It is evident that people don’t have the time they used to, or the interest to pick up a project in the middle, and they need someone to come in and work with them until the problem is solved. In this very fast moving world, people are looking for us to extend consulting support and implementation follow through. Better application of knowledge is something needed and desired in the industry.

Q: What is your assessment of category management data collection and analysis within the industry?

A: The story is that for some period of time AC Nielsen was out in front by itself in category management including perishables. Now, there is a strong initiative on the part of IRI to win a piece of that business.

Essentially IRI and Fresh Look Marketing Group parallel AC Nielsen and The Perishables Group in terms of the services they offer. They’ve developed skills of processing and analyzing perishable data and putting it in a form that can be used for category management.

We don’t have a standard universal code like packaged goods. Identification and analysis depends on tying in PLUs, seasonal data, and many other variables. AC Nielsen for several years pulled way ahead of IRI in the category management area. In the last year, IRI has said this isn’t satisfactory and is taking steps to come back in and be more competitive.

Q: How do the groups compare in the services they offer? Could there be times where a customer could turn to both?

A: It’s harsh to say, but IRI and AC Nielsen generally offer the same support in market syndicated data processing. Of course there are differences, but in the micro sense. From the long view, they look like they are doing fundamentally the same thing; with better timing and accuracy than was the case a few years ago. FreshLook Marketing is rounding out a storewide solution for IRI like the Perishable Group would do for AC Nielsen.

Q: What advances have been made in category management methods?

A: This sounds obvious, but the original context of category management was the category. When people did analysis, it was for the apple category or the bread category. You’d have a long series of independent analyses only loosely held together. This is less than optimal for a number of reasons. When you solved for space, you never knew if the last item in one category was better or less performing than the second-to-last in the next category.

There were a lot of circumstances where space wasn’t well used. Today, there is software which allows the retailer to analyze across the store to integrate space components, and you don’t get as many arbitrary decisions of splitting space 50/50 for category A and category B. We never got that before.

people are saying category management integrated across categories is important to retailers. In concept, you get more yield and productivity out of a given space. Having that capability is important, but retailers don’t always move things that way.

The next generation of category managers has more data and sophisticated software to look across categories and departments, also on the basis of store clusters throughout the chain. I would argue that theorists find it difficult to tie in the data.

Q: Isn’t there more attention being placed on the impact of consumer shopping patterns and behaviors?

A: Household panel data; how and what consumers purchase, when and where they shop, etc., is often not usefully applied. Space management is complex. Not everyone can or will use all this consumer data. No human being can synthesize it all.

Q: What is next in the evolution of category management?

A: In the traditional marketplace, there are a series of retail competitors and suppliers who are competitors themselves. Every supplier is trying to get into every retailer, using that category management data as a competitive advantage to show the retailer it is better off than the competition if it takes on their products. Wherever possible, retailers are developing longer relationships with perishables suppliers, interacting with suppliers to figure out ways to improve their business.

What we will see, not a 100 percent this way, but an increasing number of situations where the retailer aligns with a particular grower/shipper or brand marketer, and to a certain extent will be less interested in market data and more interested in specific data around their own relationship; take a mix of tomatoes, for example, and work it within their own business details, without any reference to external data. Market data will end up becoming a lot less relevant with the trend toward an integrated supply chain. Two issues propel this, food safety and sustainability.

We think sustainability is going to be key, but as a financially benefiting business strategy, not a social appeal strategy. You can’t do this unless you have that alignment.

These are transformational changes. There are two parts here: Big retailers and foodservice operators are placing a huge priority on insuring continuity of supply with quality producers. This will make the best producers more profitable, and it will make agricultural producers more profitable.

Bill is always intriguing and now that he can focus more on the subject at hand and less on managing a business, we expect to hear even more insightful thoughts from this important industry resource.

From this brief interview we take five key points:

  1. Advanced software is turning old fashioned Category Management into a truly effective tool because we are finally able to transcend the limitations of categories:

When people did analysis, it was for the apple category or the bread category. You’d have a long series of independent analyses only loosely held together. This is less than optimal for a number of reasons. When you solved for space, you never knew if the last item in one category was better or less performing than the second-to-last in the next category.

There were a lot of circumstances where space wasn’t well used. Today, there is software which allows the retailer to analyze across the store to integrate space components, and you don’t get as many arbitrary decisions of splitting space 50/50 for category A and category B. We never got that before.

  1. There is new competition to provide data and analytics on perishables with the implication being we can hope for better prices, better tools and other fruitful results of competition:

The story is that for some period of time AC Nielsen was out in front by itself in category management including perishables. Now, there is a strong initiative on the part of IRI to win a piece of that business.

  1. The age of vendors trying to get in every retailer is fading, to be replaced by a new age of retail/vendor alliance with implications for the value of different kinds of information:

In the traditional marketplace, there are a series of retail competitors and suppliers who are competitors themselves. Every supplier is trying to get into every retailer, using that category management data as a competitive advantage to show the retailer it is better off than the competition if it takes on their products.

Wherever possible, retailers are developing longer relationships with perishables suppliers, interacting with suppliers to figure out ways to improve their business.

What we will see, not a 100 percent this way, but an increasing number of situations where the retailer aligns with a particular grower/shipper or brand marketer, and to a certain extent will be less interested in market data and more interested in specific data around their own relationship; take a mix of tomatoes, for example, and work it within their own business details, without any reference to external data. Market data will end up becoming a lot less relevant with the trend toward an integrated supply chain. Two issues propel this, food safety and sustainability.

  1. Sustainability can’t mean losing money for the good of the planet. It will be successful to the extent it is a business strategy:

We think sustainability is going to be key, but as a financially benefiting business strategy, not a social appeal strategy. You can’t do this unless you have that alignment.

  1. The big transformation is that issues such as food safety and sustainability cannot be addressed in a meaningful way in the context of a transactional produce-trading orientation. So the rise of concerns in these areas will lead to more consistent affiliation between top producers and top buyers in perishables. This will nudge producers out of a solely commodity-driven world, which will result in high quality producers being more profitable. As a larger and larger share of the business consists of these more highly aligned supply chains, agricultural production itself will be more profitable.

These are transformational changes. There are two parts here: Big retailers and foodservice operators are placing a huge priority on insuring continuity of supply with quality producers. This will make the best producers more profitable, and it will make agricultural producers more profitable.

All very thought-provoking and insightful. Best of luck to Bill and his team at Willard Bishop. May Bill find his new focus liberating and keep feeding the industry ideas for many years to come.

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