Strategies for Surviving a Slowdown

I don’t know if we are in a recession, but the evidence of a slowdown is inescapable at this point. But don’t give up hope – there are many opportunities out there, as shown by the advice from NAW Executive Summit attendees.

MY TRIP TO THE NAW EXECUTIVE SUMMIT

I attended the NAW Executive Summit last week, which was one of the most successful (and well attended) Summits. I had the privilege of facilitating a panel of top-notch executives (Dave Griffith, Modern Group Ltd; Mark Kramer, Laird Plastics; and Steve Nelson, POOLCORP). You can view their PowerPoint slides online, but the real value came from the informal networking and idea sharing. The presentations provided a superb business-focused platform for many fascinating best practices conversations.

If you attended on Thursday, then you also realized how much fun I had on the panel with my fellow NAW Institute Fellows – Brent Grover, Mike Marks, and Neil Gholson. The always-classy Tom Gale even managed to keep us (somewhat) on topic.

I also want to give a shout out to Ray York for his Chairman’s address, which was both thoughtful and personal. Many of us in the audience also enjoyed the fact that Ray didn’t hide behind a podium. Well done!!

LESSONS ON PREPARING FOR A DOWNTURN

There were hundreds of wholesale distribution executives at the event, so I took the opportunity to find out how they were preparing to make the most of an economic downturn. Here are the six strategy ideas that I heard:

Idea 1: Make Strategic Acquisitions – The other NAW Institute Fellows and I all agreed that acquisition multiples are starting to return to historical ranges, a trend that I discussed eight months ago in Is M&A Peaking?). The current cycle began in 2004, as shown in Exhibit 5-1 of Facing the Forces of Change®: Lead the Way in the Supply Chain. If your company is well-run and has access to capital, then now is the time to approach distressed competitors to discuss the value of a combination.

Idea 2: Improve Employee Productivity (by Spending) – Many wholesale distribution executives told me that they are planning for the long term future of their companies by investing in technology. (Perhaps that’s why I met so many technology vendors at the Summit.) The biggest gains are coming from substituting IT for repetitive human processing activities such as order processing, billing, inventory control, warehouse management, etc. But not all technologies are created equal. For example, I learned this weekend that giant computer-enhanced pigeons will not improve warehouse productivity.

Idea 3: Improve Employee Productivity (by Cutting) –Productivity is measured as Output divided by Input, so a number of executives discussed improving productivity by reducing headcount. Yes, it can be personally painful to make these cuts, especially when a lay off disrupts the lives of people you have known for many years. However, you don’t want to wake up in three years and regret that you didn’t make the tough calls today. One key caveat: No one was planning to make across-the-board cuts before a downturn.

Idea 4: Refocus on Customer Profitability – Not every dollar of sales or gross profit is worth chasing. More than one executive told me about their efforts to move away from a one-size-fits-all service model so as to limit the full suite of value-added services to the most profitable customers only. Some executives are challenging their management team by asking (in my words): “How can we have profitable relationships with the customers that benefit most from working with us?” My advice: Identify your most profitable customers (highest EBIT) and identify why you have a win-win relationship. (Low cost of sales? Low joint transaction costs? High gross margins?)

Idea 5: Diversify Your End-Markets -- One President of an HVAC wholesaler told me that his company had diversified into commercial and industrial segments, so overall sales and profits were up despite a loss of business on the residential new construction. Perhaps that’s cold comfort if you are tied to a single industry, but there’s no time like the present to begin broadening the customer markets that your company serves. See Why Strategy Matters for my discussion of an MRO distributor that successfully reinvented their business with diversification.

Idea 6: Explore Exporting – Related to the diversification idea, I was pleasantly surprised to hear about successes with overseas markets. As I discuss in my 2008 Economic Outlook audio conference, savvy distributors can benefit from the export trend. I even spoke to an executive who is planning to sell his company’s private label product in overseas markets. Cool!

Hopefully, these six ideas can help to jump-start your own planning. In the meantime, I’ll leave you with this limerick to ponder:

A distributor was feeling quite gray;
Because profits were melting away.
Said the consultant, "Don’t fear,
It’ll get better next year.
But please, pay my bill right away.

How to Make Money

Warren Buffett once said that there are only two rules in business:

• Rule No. 1: Never lose money.


• Rule No. 2: Never forget Rule No. 1.

If you agree with Mr. Buffett, then I have three books for you!

The Official Guide to Wholesaler-Distributor Financial Success is a new 3-volume set of books by Brent Grover of Evergreen Consulting. It is published by the NAW Institute for Distribution Excellence. (The NAW Institute also publishes Facing the Forces of Change®: Lead the Way in the Supply Chain.)

These ambitious books represent the first and most complete attempt to distill the best practices of wholesale distribution management into one compact package. In my opinion, they are a truly outstanding resource for anyone who runs a wholesale distribution company. As I discuss below, this series would also be an amazing tool for any CEO who wants to develop the next generation of leaders for his or her business.

THE STRAIGHT DOPE

Volume 1 (Exploring the Financial Fundamentals of Distribution) is my own personal favorite of the group. The topic may not sound glamorous, but understanding the content of this volume is the only way to master Mr. Buffett’s Two Rules. As you all (hopefully) know, any wholesale or retail company should measure its true profitability using Return on Investment (Pretax Profit / Owner’s Equity). Brent provides one of the most readable, concise discussions of true profit in a distribution company that I have ever read.

To be frank, I’ve personally met too many distribution business owners who are overly focused on income statement items – revenues, gross profit, or operating profit. I once worked with the owner of a $100 million wholesaler-distributor who seemed proud of the fact that he couldn’t read a balance sheet. Maybe he read the Unofficial Guide to Success?

Volume 2 (Distributor Manager's Guide to Departmental and Branch Financial Excellence) covers a lot of ground in a short amount of time, ranging from sales management to credit issues to purchasing effectiveness. It’s a solid overview for anyone moving into a branch or division management, although each chapter deserves its own book.

Volume 3 (Distributor Executive's Guide to the Art of Top-Quartile Financial Performance) is an integrative look at how top management can bring together all of the disciplines for long-term management. I found the chapter on benchmarking metrics to be the most useful and practical. Brent emphasizes the fact that benchmarking should be against other companies, not just against your own company’s past performance. I also liked the many suggestions for how to begin this process in yoru own company.

These books are very readable, despite the subject matter. Rather than a straightforward text, the books are interspersed with first-person accounts from the employees of a fictional wholesaler-distributor. For example, “Susan, Vice President and General Manager” has a friendly, chatty introduction to Operating Profit. I enjoyed this stylee because it makes the books very accessible for the non-specialist. Nonetheless, I would also appreciate a future companion reference book that boils down the essential financial content and ratios for quick reference. (Yes, that’s a request for Volume 4, Brent!)

In the spirit of full disclosure, Brent and I both serve as Fellows of the NAW Institute and are both on the Advisory Board of Supply Chain Equity Partners. Nonetheless, I am giving you the straight dope on these books. They are well worth your investment.

BUILDING FUTURE LEADERS

In Building Future Leaders, I describe how George Pattee, CEO of Parksite Group, used my Facing the Forces of Change®: Lead the Way in the Supply Chain book as a management development tool for building the next set of leaders in his business.

I encourage wholesale distribution CEOs or Presidents to use Brent’s books in a similar fashion. Form a virtual book club for all senior executives and managers in your company. Go through these books one chapter per week and schedule weekly conference calls to discuss how your company really operates and makes money. In 16 weeks (chapters), I guarantee that you’ll gain unique insight in your own company and the capabilities of your next generation of leaders

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I’ll be at the NAW Executive Summit in DC this week. If you’ll be there, please let me know what you think about this blog – good, bad, whatever.

Distribution Trends: 2007 Year in Review

Believe it or not, it’s time for my final post for 2007. In the spirit of the season, I take a quick look back at this year’s posts to highlight the major themes of Distribution Trends.

As you may know, I started writing this blog to help people get the most out of Facing the Forces of Change®: Lead the Way in the Supply Chain, a research study sponsored by the NAW Institute for Distribution Excellence. Many posts have been organized around the four major trends identified in the report, although other themes – economic trends and consolidation activity – generated very high levels of readership, too.

Here is a brief rundown of the year’s posts.

Trend 1: Private Label Products – The impact of private labels on channel relationships turned out to be an especially controversial topic. As I discussed in Brand Killers, private labels will continue to grow in categories where the manufacturer's brand does not add enough value to the customer. The debate in the electrical industry was particularly open because Graybar took a public stance against private labels. (See Private Label Static from Electrical Products.) I still think that private label products can be a way to strengthen manufacturer-distributor relationships by enabling the creation of jointly developed products.

Many private label products come from Asia, a fact that hit home over the summer with the recall of Chinese toys. Personally, I believe that The Risks of Chinese Sourcing have been overblown for political reasons, although private labels offer both Opportunity and Risk to a wholesaler-distributor. Perhaps we will even see a counter-trend toward Near-Shoring Private Labels from Canada and Mexico.

Trend 2: Demand-Driven Channels – The trend toward more data sharing between channel partners challenges many preconceptions about the wholesale distribution industry. I highlighted examples on the blog in channels as diverse as construction equipment and beer distribution. (I do not recommend combining the products from those industries!) Nevertheless, I believe that wholesaler-distributors should only share point-of-sale data with supplier organizations that have rigorous internal security policies for data management. (See Trust and Channel Data Sharing.)

Trend 3: New Profit Models – As I point out in Chapter Three of Lead the Way, many wholesaler-distributors are now successfully selling fee-based services and positioning themselves as suppliers of products with related services instead of only reliably providing goods. I highlighted examples from electronics distribution and industrial distribution. The new profit models trend also refers to the fact channel compensation is becoming more data-based and performance-oriented, as examples from John Deere and Coca-Cola demonstrated. I was also impressed with pay-for-performance forecasting in the beer industry.

Trend 4: Connected Customers – This trend was perfect for a blog because it refers to the growing interconnectedness of manufacturers, customers, and distributors. I advised wholesaler-distributors to Be Found Online, pay attention to Online Customer Communities, and recognize the power of Leads Searching for You. The Future is Already Here was one of the top posts this year on Distribution Trends.

Other Trends – Loyal readers know that I’ve strayed beyond the confines of the four major trends to look at other major issues.

My most popular posts (based on number of web hits) were analyses of economic trends, especially 2008 Economic Growth and You and 2007 Growth and the 2008 Economic Outlook.

As always, consolidation was a hot topic, especially as we all watched the twists and turns of HD Supply this year in Is M&A Peaking? (June), The Fallout from HD Supply (September), and HD Supply Begins to Unroll-Up (December).

Two posts on strategic planning also had very high readership. In Why Strategy Matters, I reminded wholesale distribution executives to pay attention to long-term economic trends when building a long-term vision for your company. In Building Future Leaders, I described how one CEO uses Facing the Forces of Change®: Lead the Way in the Supply Chain as a leadership development tool for managers.

What’s ahead for 2008?

I'm grateful for the positive response to this blog and very much appreciate the many positive emails and comments that I have received since launching 8 months ago.

As I told you in my 2008 Wholesale Distribution Economic Outlook, many wholesaler-distributors will face the toughest economy in nearly five years. Therefore, I plan to cover broader macro-economic developments throughout 2008 while continuing to interpret the news for wholesale distribution executives and their suppliers. Please feel free to email me if you have suggestions for topics or articles.

I'll wrap-up the year with some homegrown supply chain humor, straight from the pages of The Wall Street Jovial:

Santa's Supply Chain Keeps Pace, Despite Changes

I will be back during the week of January 8. Until then, I wish you a healthly and happy new year!

All the best,
Adam

Why You Should Care About the Mortgage Crisis

In my Wholesale Distribution Economic Outlook 2008 webcast last Thursday, I described how the current state of housing and residential construction markets will ripple throughout the wholesale distribution industry. (Click here to order the audio CD, handouts, and transcript of this event from Modern Distribution Management.)

Historically, the housing market was a symptom rather than a cause of economic conditions. Something different is happening today, which why you hear so much in the news about the sub-prime mortgage situation. Right now, the residential housing market is a leading indicator of economic activity.

Wholesale distribution executives who don’t spend time in construction markets may not fully appreciate the degree of interconnectedness or how housing will affect their markets.

I suggest you read yesterday’s excellent front page article from The Wall Street Journal entitled U.S. Mortgage Crisis Rivals S&L Meltdown. The article implies that the ultimate extent of the crisis will depend largely on how steeply the price of the average American home falls. So, here’s some data that I presented on the webcast showing the national index of home prices.

Yikes!

As I described on the webcast, I expect residential housing conditions – both home sales and construction activity – will worsen and are unlikely to rebound in 2008. Residential remodeling activity will also trend down in 2008.

Unfortunately, it will take years to blow off the excesses from the speculative bubble in housing. The wholesale distribution industry will face some major changes during this adjustment period.
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Next week, I’ll cover another hot topic from the webcast: how the U.S. dollar's devaluation will affect prospects for private label products from wholesaler-distributors.

HD Supply Begins to Unroll-Up

HD Supply has reportedly begun the un-roll-up (roll-down?) process.

The Home Channel News is reporting that HD Supply has agreed to sell its Lumber and Building Materials (LBM) unit to Pro-Build Holdings Inc. Modern Distribution Management estimates that the two largest companies in the division had combined sales of almost $800 million when they were acquired in 2005 and 2006. Total revenues in HD Supply’s LBM are surely lower today given the pressures that I highlighted a few months ago in The Fallout from HD Supply.

I’m sure HD Supply (and its new owners) are feeling the pressure of an especially sharp cyclical downturn. Last Friday’s construction data showed an unexpected monthly decline in non-residential construction from September to October. Read the complete release from the Census Bureau. Both public and private nonresidential construction activity has been partially offsetting the residential downturn this year.

The monthly data are notoriously volatile and often subject to substantial revision. I’m more heartened by the fact that commercial construction was up 17.5% versus October 2006 compared to a year-over-year decline of 16.2% in residential construction. Nonetheless, tightening credit standards and growing vacancy rates suggest that 2008 will be weaker for non-residential construction. Unfortunately, I don’t think we’ve hit the bottom on the residential side.

Be sure to join me this Thursday for my Wholesale Distribution Economic Outlook webcast. I’ll give you more details on the 2008 forecast and its implications for wholesaler-distributors.

2008 Economic Growth and You

Last Tuesday, the Federal Reserve released the minutes of its October 30-31 Open Market Committee meeting, which for the first time included the projections for economic growth, unemployment, and inflation through 2010. I don’t recommend that you read the full report unless you are an economics geek like your friendly neighborhood blogger.

Here are the primary forecasts for 2008 made by Federal Reserve Governors and Reserve Bank Presidents:

• Real U.S. Gross Domestic Product (GDP) will grow between 1.8% and 2.5%
• The overall inflation rate will moderate somewhat between 1.8% and 2.1%
• The inflation rate excluding food and energy will range from 1.7% to 1.9%
• Unemployment will remain below 5%

These forecasts made me wonder: How is the growth of individual wholesale distribution sectors related to overall U.S. economic growth?

Wholesale distribution and GDP

To find out, I statistically correlated year-over-year growth in U.S. GDP to growth in the overall wholesale distribution industry. I used real, inflation-adjusted figures to compute growth rates.

The overall relationship shown in the chart below is very strong over time, although growth in wholesale distribution is more volatile than overall economic growth. (Click the charge to enlarge it.) The correlation of growth rates is 78%.

As I highlighted in 2007 Growth and the 2008 Economic Outlook, the wholesale distribution industry has been growing faster than the U.S. economy during the past three years.

GDP and Your Industry

Yet this overall correlation masks substantial variability between different sectors of the industry. So I statistically correlated year-over-year growth in U.S. GDP with growth in each of the nineteen sectors covered in 2007 Wholesale Distribution Economic Reports. Again, all data are adjusted for price changes.

As the table below illustrates, industrial sectors are more closely tied to the overall economic cycle, while staples such as food and drugs have little relationship to U.S. GDP. Surprisingly, revenue growth in the chemical and oil & gas sectors have little correlation to GDP growth due in part to the unusually close relationship between underlying commodity prices and revenues.

What’s Ahead for 2008?

To learn more about the 2008 economic outlook for wholesale distribution and its primary sectors, please join me on my Wholesale Distribution Economic Outlook audio conference on Thursday, December 6.

You’ll be able to ask me real-time questions during this live event. You can also email me your 2008 economic questions in advance.

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IN MEMORIUM: Erin Anderson

I am sad to report that Erin Anderson, a leading academic authority on distribution channels and co-author of the MBA textbook Marketing Channels, passed away tragically last week. You can view the memorial page at INSEAD.

Erin was the intellectual and professional mentor who sparked my interest in wholesale distribution while I was a PhD student at Wharton. We also co-authored an academic paper on channel management and taught together in the Executive Education program at the Kellogg School. I would not be working in the industry, conducting research, or even writing this blog if not for Erin’s counsel, encouragement, and intellectual enthusiasm.

The Erin Anderson Excellence in PhD Education Fund has been established in recognition of her many contributions to student education. Please consider a tax-deductible contribution to this fund as a way to ensure support for high-quality academic research on distribution channels.

• Donation Form for the Erin Anderson PhD Fund
• Instructions for US-based donors

2007 Growth and the 2008 Economic Outlook

As we start to get ready for 2008, it’s a good time to check in the state of wholesale distribution in 2007 so far.

The overall news is very good. Total sales of wholesale distribution companies are on track to exceed $4 trillion dollars based on the first three quarters of the year (January through September). Once again, the wholesale distribution industry is growing faster than the overall U.S. economy’s Gross Domestic Product (GDP). (See chart below. Click to enlarge.)
Growth varies widely between the 19 major sectors. The table below (click to enlarge) compares 2006 to 2007 using the sectors covered in my 2007 Wholesale Distribution Economic Reports, which are available from the NAW Institute for Distribution Excellence.
Wholesale distributors of building materials and construction supplies had the biggest decline in revenues due to the residential real estate downturn. Other sectors continue to benefit from commodity price inflation, including agricultural products and finished food products. Industrial distributors continue to enjoy healthy growth due to strength in U.S. manufacturing, which is enjoying the export-driven benefits of a weaker dollar.

Getting Ready for 2008

As you start planning for 2008, I want to let you know about my Wholesale Distribution Economic Outlook audio conference on December 6, 2007.

During this call, I’ll give you my exclusive first look analysis at how U.S. economic trends are shaping up for wholesaler-distributors in 2008. I’m partnering with Modern Distribution Management to provide this cost-effective planning tool for wholesale distribution companies. We arranged the conference so that there is only one fee per dial-in number, so an entire management team can listen for just one price.

This will be a live event, so you’ll be able to ask me real-time questions. As always, I welcome your feedback and questions on macro-economic trends and their impact for wholesale distribution. Please be sure to email me your 2008 economic question at least one week prior to December 6. I’ll try to answer as many as possible during the event.

5 Fundamentals: My Review

I’m told that there are 613 commandments in the bible, although most of us only know the Top 10. I’m not sure how many sales management fundamentals exist, but a new book provides a valuable service by focusing our attention on the Top 5.

5 Fundamentals for the Wholesale Distribution Sales Manager is a new book by Tim Horan and Steve Deist of Indian River Consulting Group. It is published by the NAW Institute for Distribution Excellence. (The NAW Institute also publishes Facing the Forces of Change®: Lead the Way in the Supply Chain.)

This book should be required reading for all wholesale distribution sales managers, regardless of tenure. The 5 Fundamentals is practical, straightforward, and relevant.

The book is organized around the following fundamentals:

1. Assess and develop your own coaching and management skills
2. Recognize talent and select the right people
3. Manage the sales function successfully and systematically
4. Know how to build a high-performing team
5. Maintain thriving relationships with customers and suppliers.

It’s hard to argue against anything on this list. Few consultants would recommend you build a low-performing team or select the wrong people.

Thus, the authors' main contribution comes from demonstrating how these core principles translate into real-world actions. For instance, the chapter on managing the sales function provides an exceptionally clear description of fact-based account planning.

The book benefits from the many case studies in sales management, which I presume represent disguised experiences from their client base. I chuckled when reading about “Bill,” a senior rep who was nicknamed the “agitator” because he was “…always stirring things up, always making more work for the management team, and always irritating the support staff.” All of the case studies are written using first names, making them great discussion and coaching tools, especially for those of you practicing Fundamental #1.

I also appreciate the authors’ sense of humor, as indicated by the cartoons and hilarious asides sprinkled throughout the book. Horan and Deist can not even resist taking one final shot in the conclusion, arguing that the old days of relative ability (if you were a relative, you had ability) are gone. Doh!

I found the self-assessment exercises, such as the “Core Competency” worksheet in Chapter One, to be very useful and would have liked to see more exercises. A keyword index would also have been useful as I found myself having to search for particular ideas by flipping pages. These are very minor misgivings.

In my opinion, all current and future sales managers should show their commitment to lifelong learning by getting 5 Fundamentals for the Wholesale Distribution Sales Manager.

P.S. If you like this book, I’d also recommend What Got You Here Won't Get You There as a great complement to the Five Fundamentals. This new book identifies “the bad habits that keep highly successful people from succeeding even more.” The Twenty Bad Habits (anti-fundamentals?) are a rogue’s gallery of career limiting behavior. You can see the list in this Knowledge at Wharton review.

Building Future Leaders

How can you develop the next generation of leaders in your company?

Maybe you should emulate George Pattee, CEO of The Parksite Group, a 100 percent employee-owned distributor based in Illinois.

George has been a fan of the Facing the Forces of Change® series for many years, but was frustrated that the information never made it out of the executive suite. So, taking a page from Oprah, he set up a virtual book club for more than 30 executives and managers at Parksite's many locations around the country. (I found out about George's book club on Monday when he called to ask me a question from the last group discussion.)

As George described it to me, he wants to create a broader dialogue within his company using the industry-specific educational content in the book. His goal is straightforward: Develop future leaders for Parksite.

In the introductory email to his team, George wrote: “Facing the Forces of Change can provide strategic value to The Parksite Group as a starting point for substantive management discussion and leadership development and training. As such, to enable you to gain the most from this report, we are scheduling conference calls to review each chapter in the next few months.”

Think about it -- all of these executives and managers now get to engage directly with the CEO as well as hear the CEO's unfiltered ideas, thoughts and vision. The calls also create a new level of interaction between the managers across Parksite’s three business units and multiple locations at limited cost.

And the best news? George told me that the first two conference calls have already spun off some new initiatives.

What a cool idea! I wrote Facing the Forces of Change®: Lead the Way in the Supply Chain to help executives make better decisions and grow their businesses. George’s call is one of the reasons that I like doing my job. I hope his example inspires you to use the report as a tool for building the next set of leaders in your own business.

Why Strategy Matters

I’ve been flying around the country during May talking to distribution and manufacturing executives about the results in the new Facing the Forces of Change®: Lead the Way in the Supply Chain report.

All too often, I hear the presidents and CEOs of wholesaler-distributors complain that they “don’t have time for strategy.” Running their businesses keeps them fully occupied, so they do not have the time or inclination to think about how their supply chain is evolving. This appears to be especially true when the changes are somewhat gradual.

Reinvent or Die

Did I describe your attitude? Then read Reinvent or Die, an excellent profile of D&D Tool & Supply from Progressive Distributor magazine.

The article describes how a small family business looked at its changing markets, built a plan of action, and successfully grew the company under the leadership of Georgia Dutro, a new President from the family. Key parts of the story:

“The entire manufacturing market in the U.S. was shrinking, but what would be left in Southern California? Likely survivors included aerospace, ship manufacturing and other metal fabrication companies, along with the military, which required a variety of MRO supplies. Wood manufacturing continued moving into northern Baja California, Mexico. Dutro advised her brothers to expand in two ways: geographically into all of Southern California and Mexico, and then to diversify into other types of manufacturing markets. This required D&D to open operations in the border areas of Mexico to serve the wood industries, and to diversify into the machine shop and metal fabrication markets, which meant learning new markets, vendors and applications.”

In other words, the company stepped back from day-to-day operations and saw a market that was going through a fundamental change.

Know your future

Part Two of Lead the Way in the Supply Chain examines the major markets in which wholesaler-distributors operate. Here is a sampling of factoids from the report about evolving trends that signal fundamental change:

• The national market share of the top 10 home builders has doubled to 21% of closings in the past decade, with a few builders having even greater share in regional markets.
• The U.S. Bureau of Labor Statistics forecasts that total employment in many contractor occupations will grow faster in the next decade than the overall U.S. employment growth of 13% over the same period. (See Exhibit 6-1.)
• The period from 1998 to 2004 saw a net loss of 27,000 manufacturing plants and more than 3 million domestic manufacturing jobs. (See Exhibit 7-1.)
• About 90% of manufacturing executives indicate a moderate to severe shortage of qualified, skilled production employees.
• Real (inflation-adjusted) revenues of grocery wholesalers have been essentially flat since 2001. In contrast, sales at restaurants and bars continue to grow faster than grocery sales, reflecting a long-term shift away from home cooking.

These points illustrate long-term trends that will change wholesale distribution in the respective industries, even if these trends are not directly changing your business today.

Don't close your eyes to the market and forget to build a long-term vision for your company. The future is more predictable than you think, even if hardly anyone bothers to predict it.