Distributor buying groups are
an important part of the supply chain today, but their origin is not widely
known. That is to say, its beginnings are clouded with the mists of time.
Today, there are some half dozen of these groups, each with its own constituency.
It began with the formation
of Network Associates in early l967. Tom Roche, a former Lily-Tulip Cup sales
manager was then managing sales for Franklin & Perkins in Brockton, Massachusetts. Tom agreed with Jean Perkins, president and owner
of Franklin & Perkins, that the distributor group idea was worth pursuing.
Tom saw it mainly as a means to advance sales to large regional accounts. Jean
saw it mainly as a means to leverage collective purchasing power. In any event,
Tom started recruiting members.
Gerry Baum, President of
Eastern Bag & Paper in Connecticut,
quickly signed on. The original founding group, in addition to Eastern Bag and
Franklin & Perkins, were Central Paper Products (New
Hampshire), Clark Paper & Supply (New
Jersey), Ideal Paper (Massachusetts),
Mansfield Paper (western Massachusetts) and
Superior Paper (Maine).
Three remain part of Network today: Eastern Bag (now called EBP Supply
Solutions), Central Paper and Mansfield Paper.
On a snowy night in November
1968, each of the seven founding members brought a $1,000 check to a meeting at
the Holiday Inn in Waltham,
Mass., to seal commitment to the
project. Jean Perkins came up with the name, Network Associates, and Gerry Baum
was elected its first president. Within a short time, seven other Eastern
distributors joined the founders: Bond Paper, Buff-Henley Paper, D.J. Mead
& Sons, J.P. Mead, Monmouth Paper, Paper Enterprises and Peerless Paper
Products. Tom Roche’s wife, Pat, becomes Network’s first employee, handling the
bookkeeping from a desk in Jean Perkins’ office.
They met on a fairly regular
basis and with the assistance of their lawyer, former Georgia Governor Ellis
Arnall, head of the Atlanta
law firm, Arnall, Goldin & Gregory, organized committees and approaches to
the marketplace. Years went by. Little happened.
In late l973, on behalf of
Network, Gerry Baum and Herb Sedler, President of Paper Enterprises, invited
DMS Corporation, a New York
consulting firm specializing in national foodservice chains (now called quick
service restaurant chains) to help propel Network forward.
DMS understood that expanding
Network’s membership coast to coast was essential in attracting both
manufacturers and large quick service restaurant chains. It worked. Under the
leadership of Herb Sedler, who took office as head of Network in mid-l974,
Network became a true cooperative and a force in U.S.
paper distribution. By mid 1975, Network had some 33 members, incuding
two in the West, and a group of manufacturers who provided rebates back to
Network. Soon, it acquired its first major account, Baskin Robbins, that was
truly national in scope.
It also awakened the foodservice industry to the values of having distributors
join forces and operate as a group. Within the next few years, a host of new
distributor groups were formed.
Network led the way in
successfully linking independent paper distributors into a cooperatively
managed venture that enabled them to 1) leverage their combined purchasing
power to secure favorable response from suppliers; and 2) coordinate their
individual sales efforts to secure accounts whose needs encompassed geographic
territory beyond the reach of any one distributor. Although the various groups
have different strengths and points of emphasis, the basic concept was
pioneered more than 40 years ago, and the value of distributor buying groups in
the supply chain remains important today.
