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Talking shop with ... Ken Nemeth: the GMDC chairman discusses the driving forces in nonfoods and his organization's initiatives to help retailers capitalize on them.

Grocery Headquarters: What is the state of the nonfoods category industrywide in terms of sales?

Ken Nemeth: The general merchandise/health-beauty-wellness industry is very fluid in terms of sales. We have periods of brisk growth followed by mediocre sales throughout the year. Overall, without inflation factors, I would characterize sales in our categories as above average. Everyone in our industry is trying to drive top-line sales. We are very bullish on future growth. There are many exceptionally talented industry veterans within the General Merchandise Distributors Council's membership capable of developing the initiatives needed to drive top-line growth. Our GMDC Marketing Conferences offer the opportunity to push these initiatives forward.


GH: What is driving sales?

Nemeth: Without question, the key element driving sales today is value. Promotional activity ranging from advertising to temporary price reductions can have a significant impact on sales growth. If the consumer perception is value-related it generally translates into a sale.

As an industry, we are looking for quality products which we can feature at strong promotional price points. The category of items is secondary. It can be a seasonal product or it can be a brand new item launch. The bottom line is quality and price. Manufacturers spend a great deal of time and money trying to perfect the value equation. They try to balance the marketing support of these items with the needs of the supply chain.

GH: Wellness is a big initiative for GMDC. Why?

Nemeth: Wellness is an ambitious enterprise for GMDC because we believe it is our future. First of all, the term wellness is very broad in scope. There are many different elements of wellness. One of the key areas we are focused on is the baby boomer age wave we are just entering into.

GMDC has developed what we like to call "usable insights" within the leadership group. We talk a lot about the U.S. economy and how shifts in the population translate into these usable insights. For instance, back in 1950-1970 we began to move from a bluecollar to a service economy. We believe we are now moving from a service economy into a new phase we call the health economy. In the next eight years, $1 of every $5 earned will be spent on health care as people age. With more responsibility for the cost of their health care, people are turning to the broader marketplace for solutions rather than just the traditional health care delivery system. This health economy is what will fuel innovation and growth in markets for a wide range of products and services.

GH: What is GMDC doing in regard to wellness?

Nemeth: One of the first things we are advocating is a change in the current terminology of HBC to HBW--health, beauty, wellness. We believe this GMDC-originated terminology provides focus on a huge business opportunity for the members we serve.

Having undergone consistent refinement over three decades, GMDC's multi-dimensional conference format uniquely enables members to connect with all aspects of the GM/HBW industries in an extremely cost-efficient manner.

GH: Tell us about the rebranding of GMDC. Why has the organization undertaken this strategy?

Nemeth: We have actually talked about rebranding different segments of our member service programs at GMDC for several years now. You're seeing that strategy rolled out now as we have rebranded what was formerly the GMDC Educational Foundation into the GMDC Education Leadership Council. Rather than having this outstanding group of thought leaders function as a board managing financials and other procedural activities that should be handled by the GMDC board, we wanted this group focused on providing leadership in new educational and training initiatives.

Believe me, the name may have changed, but we're more dedicated than ever to providing thought leadership, education and training to our members.

Our rebranding efforts also extend to what was formerly our annual Health and Beauty Care Marketing Conference and is now the Health Beauty Wellness Marketing Conference. We're committed to ensuring our members are at the forefront of innovation and thought leadership in satisfying consumers' health and wellness needs, and that includes ensuring we get the right suppliers together with our members at our conference to ensure the right players are connecting to make this happen.

GH: How is the educational component of GMDC working? Can you provide updates on future activities?

Nemeth: GMDC's education and training programs have never been better. This competency includes our conference educational sessions--business sessions, workshops and roundtables--as well as the new e-learning education programs we will begin deploying in 2007 to connect our members to professional and personal development opportunities.

Ken Nemeth is president of Valu Merchandisers Co., which distributes GM/HBC products to retailers in 14 states.
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Author:Mendelson, Seth
Publication:Grocery Headquarters
Article Type:Interview
Date:May 1, 2007
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