I once thought I knew a lot about the food industry. Especially the retail supermarket end of it. I studied it. I researched the 50 major markets in the U.S. I had them all plotted on a big map in the FOOD FOR ALL “war room” in our national headquarters at 112 ½ East Olive in Redlands. I knew who all the major players were in each of those fifty. I had actually lived in several of them: Los Angeles, Boston, San Francisco, St. Louis, and Minneapolis. We had managed somehow to have a presence in eight of them and were positioned to add three or four more in the next couple of years. It is the fall of 1996.
As I mentioned in the previous episode, FOOD FOR ALL was at a turning point. We had determined policies from the conception of our project that would require us to attract the participation of supermarket operators in a year-round effort, and that would make it imperative to attract support from food manufacturers and suppliers to sustain this program aimed at nothing less than reducing and ultimately eliminating hunger. The policies were simple. Ninety per cent of every dollar contributed at a supermarket checkout would go directly to those nonprofits working in the anti-hunger field, three-fourths to the local area where they originated, and one-fourth to international projects that were aimed at self-sufficiency.
I had also done the math. We needed to have FOOD FOR ALL displays in about four thousand supermarkets to make our program sustainable. We were currently in a little over thirteen hundred.
So what was making this such a difficult idea to sell? We could say the business environment. We might assign it to corporate greed. Competitiveness for the consumer dollar. I am continually haunted by the conversation I had with a food industry lobbyist at a Food Marketing Institute convention a few years back: “I applaud you for your efforts. But I must tell you that you have no idea of the forces that are marshalled against everything you stand for.” I took that into my subconscious but it did not immediately register. What were these “forces” he referred to? I have now reflected on this and have decided that I have not a clue. But I have named these forces “mergers & acquisitions.”
When we first introduced the idea of a “supermarket checkout bar-coded contribution to help end hunger,” we had no idea of the environment we were entering. We lived in Redlands, California, a small community in the Inland Empire, an hour from downtown Los Angeles. We lived two houses down from Gerrard’s Cypress Center. We shopped there. We also shopped at the Lucky Store on Cypress and Redlands Blvd. There was a Vons Supermarket in the Redlands Mall. Stater Bros. had one store just off the 10 freeway on the north side of Redlands. That was the extent of our knowledge of the food distribution system. It wasn’t long before the Vons store closed and moved out to a location where the Big Lots store is now and then closed.
This is the environment we entered with FOOD FOR ALL in 1986. On the occasion of our first test in two supermarkets we received a check for $250 from Stater Bros. supermarkets, with a letter that endorsed our program but essentially bowed out of the initial test. This was after a meeting with Jack Brown, then CEO of Stater Bros. in which we were given the clear message that “this is a great idea and I am sure it will be successful. Stater Bros. will probably be one of the last companies to participate.”
What was not clear at the time of our meeting was that Stater Bros was in the midst of a fight for control of the company. Jack had been hired as CEO in 1981. Shortly after that he engineered a buyout of the company with his La Cadena Investments Group, and then tried to take the company public in 1985 (the year FOOD FOR ALL was incorporated). In 1986, Ron Burkle and his Yucaipa Companies attempted a coup which was unsuccessful. Jack Brown was elected chairman and by 1987 Stater Bros. became a private company again. It was not the last company to join FOOD FOR ALL. Neither was it the first, as Jack has been quoted saying. He may be referring to that first check. I have my story and Jack has his, but as our congenial Vice President, Joe Biden, says: “They have a right to their own opinions, but not their own facts.”
The environment Lucky Stores, our actual first major chain participant, was operating in was just as volatile. This was the time of mergers and acquisitions, leveraged buyouts, boardroom battles and stockholder proxy fights. Lucky was being acquired by American Stores, a large holding company that owned Alpha Beta Markets, Jewel-Osco stores in Chicago, and several others around the country. Eventually, Albertson’s would acquire American Stores and the Lucky brand would disappear and become known as Albertson’s. Back room deals were being made.
Offers tendered and rejected and re-offered. Supermarkets were being sold to competitors and many closed to complete the deals. We were at the mercy of forces way beyond our control and my pay grade. My friend and FOOD FOR ALL board chairman John Benner once said to me when we were trying to figure out our next move: “One thing I’ve learned is that when the elephants are dancing, it’s best to stay off the floor.” These forces I mention both helped and hindered us. FOOD FOR ALL displays did make it into a number of Albertson’s divisions and Jewel-Osco in Chicago.
Vons had a similar exposure during the FOOD FOR ALL era. A leveraged buyout meant a change in management just at the time we were approaching them. Then Safeway Stores, which was just leaving the Southern California market as we arrived, managed a partial purchase of Vons and will take total ownership in 1997.
Ralphs, one of our strongest supporters and participants, was acquired in 1994 by Yucaipa Companies, headed by Ron Burkle, who had made the attempt to acquire control of Stater Bros. when FOOD FOR ALL began. He sold the company after only three years to Fred Meyer, another big operator in the northwest, which was in turn bought by Kroger, a Midwest giant.
I give you all of this as background to the mergers and acquisitions theme as it played out in the life of two nonprofit organizations, FOOD FOR ALL, Inc. and Food Industry Crusade Against Hunger (FICAH). I had attended one of the very first meetings of the FICAH board in 1985 in Washington, D.C. to enlist their support of our idea. At the time I was assured that there was no conflict between us and we should continue to cooperate where possible. But they were not ready to adopt us. FICAH ran a holiday fundraiser using coin canisters at supermarket check stands. FOOD FOR ALL displays were year round. Both organizations depended on the supermarket companies for display space and promotional support. At some point, after FICAH hired an executive who was a marketing professional, bar-coded tickets began to replace FICAH’s traditional coin boxes. Although it was still a Holiday appeal, retail supermarket executives began to see the two approaches as duplication of effort. Especially since we were both approaching their suppliers for financial support. Most of them did not really understand the differences and never quite got what a strong connection FOOD FOR ALL made possible with their customers, many of their employees, and the local nonprofit agencies we were supporting.
During our fiscal year 1996-97 we were approached by Michael Donkis, staff executive of FICAH about joining our efforts and eventually merging our organizations. It sounded like a good idea. We began with a meeting between John Benner and me and three board members of FICAH. Things moved quickly after a joint committee was appointed. Our attorneys drew up a plan for dissolving FOOD FOR ALL as a corporation and merging it into FICAH. So we would become a wholly owned division. I later learned that the FICAH board viewed our merger as an acquisition. Since I was approaching my 60th birthday and Michael Donkis was much younger, we decided that he would be the new President/CEO and that FOOD FOR ALL would be the name of the point of sale programs. Further decisions about staffing would be made after the experience of merging our two boards and staffs, their four persons based in Washington and our thirteen plus in Redlands, Newark and Hartford.
FOOD FOR ALL’s Newly Named Newsletter Fall 1996 Edition
The merger was completed in January 1997. Linda and I were now officially reporting to Michael Donkis and so began a swift transformation of a grassroots, bottom up, participatory organization into what it would inevitably become. I will leave this chapter of the story of FOOD FOR ALL with these words:
“May the forces be with you!” They most assuredly will.