Consumer Product Manufacturers to Create Industry's First Business-to-Business Marketplace; GMA Members To Lead New Internet Marketplace Initiative.

Business Editors

WASHINGTON--(BUSINESS WIRE)--March 16, 2000

Fifty of the world's largest food, beverage, and consumer product manufacturers have joined with the Grocery Manufacturers of America to explore creating a new, open, electronic marketplace that would be accessible to all supply chain players and could connect to other exchanges in the future.

While the exchange is likely to begin with the procurement of materials, supplies and services, this marketplace could eventually include other processes that will allow the supply chain to improve the value it delivers to consumers.

The electronic marketplace would be the largest collaborative effort among food, beverage, and consumer product manufacturers to seek to create efficiencies on a global level over the Internet.

Initially, the initiative will bring multiple buyers and sellers into a virtual marketplace to support catalog purchasing, bidding and price quotes, on-line sourcing and auctions for raw materials, packaging supplies, and other goods and services critical to their operations. Participation in the exchange is voluntary.

The exchange could eventually encompass other supply chain processes, such as: collaborative planning and demand management, flow management, order fulfillment, customer service, new product commercialization, and relationship management.

Participants expect to reach a definitive agreement on the terms, including name, ownership structure for the venture, and provisions to protect the confidentiality of a company's information, in the second quarter, subject to appropriate approvals.

While the structure of the company will be determined during an initial exploratory phase of the project, the goal of the participants is to create a standards-based marketplace that would be open to all supply chain players and could connect to other standard exchanges in the future.

GMA has been working closely with consumer packaged goods (CPG) leaders to identify areas within the industry where traditional business models and processes can be transformed using the Internet. PricewaterhouseCoopers is providing e-business consulting support for the initiative, including strategy, design, and infrastructure consulting services.

"This new initiative, conceived only 12 days ago, is moving at Internet speed. We are aiming to quickly and efficiently communicate on a global level," said GMA President and CEO C. Manly Molpus. "The new marketplace will dramatically change the way we do business, by providing a standard for manufacturers and their suppliers to fill their procurement needs and more effectively facilitate other business processes in our industry."

The $460 billion CPG industry currently spends in excess of $200 billion on goods and services to support operations. These purchases involve thousands of suppliers, ranging from the very largest commodity producers to small specialty suppliers.

In addition to procurement functions, the virtual marketplace could provide services such as capacity planning, demand forecasting, production planning, supply chain transaction automation, financial services, payment and logistics.

GMA has appointed an executive steering committee to manage the exploratory phase:

-- Cal Collier, Esq., Senior Vice President, General Counsel and Corporate
Affairs, Kraft Foods, Inc.

-- Stephen David, Senior Vice President and Global Customer Business
Development Officer, The Procter & Gamble Company

-- Stephen Demeritt, Vice Chairman, General Mills, Inc.

-- Nick Riso, Vice President, e-Business, Nestle USA

-- Tony Romeo, Unilever North American Foods and Chairman, North American
Interactive Brand Center, Unilever

-- Anthony Simon, Vice President, Strategy and Core Businesses, Bestfoods

-- Bill James, Senior Vice President, Industry Affairs, Grocery Manufacturers
of America

"We look forward to participating in the exploratory phase of this exciting new initiative," said Joe Weller, Chairman and CEO, Nestle USA, Inc. "We believe this is a significant step for the CPG industry, moving beyond simply improving procurement strategies and toward a more dynamic, collaborative global trading network."

"This is a unique event in commerce. The scale, credibility and efficiencies this marketplace creates will result in an entirely new, open and transparent supply chain," said Durk Jager, President and CEO of The Procter & Gamble Company. "Throughout our history, we have learned time and again that the industry and, most importantly, the consumer wins when we all work together."

"E-commerce opens up new ways to meet consumer demand faster and at lower cost. We must work together with our suppliers to achieve a more effective and efficient supply chain," said Richard A. Goldstein, President and CEO, Unilever United States. "A professional business-to-business exchange, tailored to the needs of the CPG supply chain, offers great opportunities to harness new technology in the interest of our customers and consumers in both our Foods and Home and Personal Care businesses."

Weller, Jager, and Goldstein are all members of GMA's Board of Directors.

Participants in the initiative include:

Agrilink Foods B&G Foods Bestfoods The Borden Family of Companies Bush Brothers & Company Campbell Soup Company  Chicken of the Sea International The Clorox Company The Coca Cola Company Colgate-Palmolive Company ConAgra, Inc. Dean Foods Company Del Monte Foods The Dial Corporation Dole Food Company, Inc. The Earthgrains Company Energizer Flowers Industries, Inc. General Mills, Inc. The Gillette Company H.J. Heinz Company Hershey Foods Corporation Hormel Foods Corporation Johnson & Johnson Kellogg Company Kraft Foods, Inc. Lance, Inc. McCormick & Company, Inc. Morton Salt, a Rohm and Haas Company Nabisco, Inc. Nestle USA, Inc. Novartis PepsiCo, Inc. The Pepsi Bottling Group, Inc. The Pillsbury Company Playtex Products, Inc. PowerBar, Inc. The Procter & Gamble Company Ralston Purina Company Reckitt Benckiser, Inc. Rich Products Corporation Sara Lee Corporation S.C. Johnson & Son, Inc. SMS Brands, LLC Signature Brands LLC The J.M. Smucker Company Tone Brothers, Inc. Tony's Pizza Service Unilever North America Wm. Wrigley, Jr. Company

GMA is the world's largest association of food, beverage and consumer product companies. With U.S. sales of more than $460 billion, GMA members employ more than 2.5 million workers in all 50 states. The organization applies legal, scientific and political expertise from its member companies to vital food, nutrition and public policy issues affecting the industry.

Led by a board of 44 Chief Executive Officers, GMA speaks for food and consumer product manufacturers at the state, federal and international levels on legislative and regulatory issues. The association also leads efforts to increase productivity, efficiency and growth in the food, beverage and consumer products industry.