I don't think "crisis" is too strong a word for what I am seeing in the industry.
 
The business school experts call it "commoditization," a fancy word for when a market starts caving in on itself through unrealistic price competition and less-than-ethical business practices. And nobody is immune - even in industries that depend on experience, skilled labor and expert consultation, like foodservice.
 
Is chasing after the lowest price, either as a supplier or a buyer, really the best choice for the long-term health of the industry as a whole? Every industry has its share of slash-and-burn practitioners who will do anything to make the sale. For some, the short run windfall is all that matters, even if it brings mayhem and sickness to an industry already under threat with increasing costs and global competition.
 
Unless we start playing by a better set of rules, we could all end up working for minimum wage - or not working at all.
 
The question is what do we do about it?
 
It's time to start thinking about new business models that will give us a fair shot at a healthy future. FIA will provide a forum for an open discussion and exchange of ideas. It starts with this newsletter and continues with a dialog - and when professionals throughout foodservice start to rethink the way we do business. Our members are the smartest people in the industry and I am confident we are up to the challenge.
 
Business is like a healthy tree. It's not just a plant - it's a whole community of creatures in synergy. Moss, bugs, birds and everything in between thrive there when things are in balance. Introduce a disease and things change quickly for the worse. The disease kills the tree and damages all the other things that depend on it. Then the disease must move to another tree to survive itself, until it's stopped or the forest is gone.
 
It's something we see everywhere - in society, not just in business. In this election year, you can even argue that the political process has been polarized through commoditizing voter-friendly issues.

There's really only two ways to reach the lowest price: by reducing materials costs or labor costs. Cut too deep and margins start to shrink. Then service, quality (or both) follow ... or sellers have to find ways to make up the difference. That often involves smoke and mirrors - charging for things that used to be included, like warranty service. And that hurts everybody: managers, executives, decision-makers, sellers, buyers and customers.

So we have to ask: what is the true cost of the lowest price?

I firmly believe we can tackle this issue with education, new ideas, guts and careful planning. As always, I welcome your ideas and input. Drop me an e-mail anytime. email John

-John Egnor

Read more about surviving the price wars with insight from the Harvard Business Review:

When Your Product Becomes a Commodity by: John Quelch

Commodity Busters: Be a Price Maker, Not a Price Taker Published by: Benson P. Shapiro 

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I am very excited to be here - because I believe in FIA's mission to bring the many different specialties within foodservice under one umbrella. We have a lot to teach one another. The more we share ideas, the better our industry will be.

A lot has happened in a short period of time - here is a wrap of what has been keeping me busy:

Action Teams:
The Houston Symposium was a terrific success. It was wonderful being there to meet so many of you in person. We not only had an excellent turnout, but the people that attended were really energized about the information presented and several have volunteered to participate in Action Teams. They are off and running, putting the symposium recommendations into action.

It's a wonderful example of thinking globally and acting locally to make real changes. FIA is stepping out - with tools that will empower FIA members nationwide to communicate the benefits of careers in foodservice and help sharpen the industry image to a variety of key audiences.

Read more on Action Teams

Strategic Alliances:
We are happy to announce the first partnerships with three key industry organizations, ASHFSA, the American Society for Healthcare Food Service Administrators; HFM, the National Society for Healthcare Foodservice Management and Mid-Atlantic NACUFS, the mid-atlantic region of the National Association of College and University Food Services.

FIA is taking a leadership position in the industry and establishing strategic partnerships will benefit both FIA and the organizations we partner with. It's all about broadening our knowledge base and providing new opportunities for collaboration and education.

Most organizations have diverse memberships with their specialty - but there is a lot of opportunity for crossover, shared knowledge, professional development and relevant programs that we can share. Getting together with pros in other areas of specialty is what FIA is all about - it's a win-win.
 
Events:
The calendar is filling up quickly. New symposiums are in the works and FIA will be back on the road this year

View FIA's calendar

Website:
We're making outstanding progress on the FIA website, making it easier to navigate and adding more content every week.

The website will keep you informed about what's going on and where FIA will be in the coming weeks - plus members-only access via secure login.

Take a look and be sure to bookmark the FIA Site.

Program and membership development:
My daily focus is on designing programs and services that translate into real value for you, your company and your industry colleagues.

FIA's mission of education and collaboration across all the different professions is what drives the train - and we have already seen the benefit of bringing experts together to tackle industry-wide challenges.

There is real power in our collective smarts and experience. I look forward to hearing from you - contact me with ideas, questions or comments.

 
email Marsha

Read more about Marsha's background and career