Supply Scan

News and trends from across the food supply chain.


AIPC Alters SYSCO Supplier Deal

American Italian Pasta Co., a producer and marketer of dry pasta, will end its mutually exclusive contract with Houston-based SYSCO Corp. for the supply of private-label pasta at the end of the year.

AIPC, Kansas City, MO, expects to continue to supply pasta to SYSCO as a non-exclusive qualified supplier, while pursuing the approximately 75 percent of the foodervice market not serviced by SYSCO.

Under the terms of the current SYSCO contract, AIPC has been precluded from pursuing other foodservice providers, who present a market opportunity of approximately 375 million pounds of pasta annually.

AIPC also will be free to service major restaurant and hotel chains not serviced by SYSCO, and to supply private-label and branded pasta into the foodservice channel.

"AIPC has had a strong, long-standing relationship with SYSCO and its operating companies and we are looking forward to continuing to be a key supplier to SYSCO," says Jim Fogarty, CEO of AIPC. "Going forward, we also will be able to provide all other major food distributors and multi-unit accounts with our high quality pasta products marketed under both private-label and AIPC's own brands.

Unsaleables Reduction Leaders Honored At Annual Conference

The Grocery Manufacturers Association (GMA) and the Food Marketing Institute (FMI) named H-E-B, Carolina Supply Chain Services (CSCS), Heinz U.S. Consumer Products and GENCO Damage Research as its 2006 Unsaleables Innovation Award winners at its Joint Industry Unsaleables Management Confer-ence held in Charleston, SC, last month.

"We congratulate all four companies on their achievement, and hope their experience and learnings will continue to benefit them and the entire CPG industry," said Patrick Walsh, FMI's senior director of industry relations. "The award winners recognized that the most successful unsaleables management practices analyze performance across divisions and take accountability for inefficiencies. Minimizing unsaleables in the supply chain remains a shared process, which is why we value the outcomes celebrated through this award."

H-E-B and CSCS implemented programs that changed the processes, procedures, private-label packaging and policy that were detrimental to the supply chain, ultimately reducing unsaleables by 50 percent as a percentage of sales. H-E-B tracked the reductions in unsaleables across multiple divisions and found some performed better than others.

Similarly, Heinz worked with GENCO to identify root causes of unsaleables, instituting an aggressive goal to reduce them by 40 percent. In the first year, Heinz trimmed unsaleables by 23 percent and projected an additional 25 percent reduction to meet its goal in just two years. "Project MUDA," or "waste" in Japanese, is a multi-dimensional operation that impacts all Heinz projects.

"GMA and FMI have consistently supported and promoted industry work that recognizes effective supply chain processes," says Karin Croft, senior director of industry affairs at GMA. "H-E-B and Heinz saw initial cost benefits, but the most significant impact was adopting missions to eliminate unsaleables in their corporate strategies."

Pepsi To Distribute Ocean Spray

Ocean Spray and PepsiCo announced a long-term strategic alliance in which Pepsi-Cola North America will market, bottle and distribute single-serve cranberry juice products in the United States and Canada under the Ocean Spray name.

The agreement also includes opportunities to develop new product innovations across multiple trade channels.

"This is a chance for both PepsiCo and Ocean Spray to turn up the dialogue on the health benefits of cranberries," says Dawn Hudson, president and CEO, Pepsi-Cola North America. "Over the past several years, we've built successful, mutually beneficial partnerships with strong brands like Lipton and Starbucks, and now we plan to work side by side with Ocean Spray to create a major healthy refreshment business focused on cranberries. When people think of cranberries, they think of Ocean Spray."

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