2024 ARG Anniversary

Alliance Companies marks two decades of service, simplifying the complex

What differentiates the Hendersonville, Tennessee-based Alliance Companies, which is celebrating its 20th anniversary this year, is the ability to simplify the complex and provide wholistic solutions, all the while being transparent and driving a tremendous value proposition for its retailers as well as a measurable return on investment for its vendor partners.

Founded in 2004, the company is a one-point contact in all senses of the word. With just a single appointment, a vendor can execute a merchandising plan for 1,400-plus stores.

While operating as a virtual chain, Alliance Retail Group gets a measurable cost of goods advantage with its scale that benefits retailers. What’s more, all of its retail stores pay the same weekly fee to fund ARG’s cost of operating.

Then there’s the unique payout structure. ARG is a non-profit company, which means it passes 100 percent of the promotional dollars directly to retailers, which in turn pass the savings onto their customers.

“Between doing a better job at negotiating and then having the tools that iPro Systems gave us, it allowed us to negotiate better and get more money,” said Randy Stepherson, chairman of Superlo Foods, one of the six founding retailers.

Alliance CEO Jena Sowers expanded on this point.

“The value proposition of being a part of Alliance or doing business with Alliance is staggering,” she said. “We also provide tremendous simplification for retailers and vendors in a very complex independent grocery environment.”

Added ARG President Michael Donkin, “Yes, we negotiate the lowest cost of goods, but we also provide our retailers with the flexibility they need to make the best decisions possible in their markets while passing on all the promotional funds from our vendor partners. This is a major point of differentiation in the industry and one that we are proud of.”

No shortage of tools

The company’s ability to provide competitive and affordable turn-key advertising/marketing and technology solutions in the independent grocer space is unique.

Having the capability to analyze stores’ scan information each day through iPro Edge, the company’s new item and category management program, is a definite competitive advantage. This data helps ARG make daily fact-based decisions that benefit both retailers and vendor partners.

The new item program facilitates speed to shelf for vendors as well as their retailers and consumers.

“We simplify the entire process and provide execution at the shelf for both parties, getting new items into consumers' hands, homes and mouths as quickly as possible,” said Jeff Hunter, SVP of merchandising and category management.

From a marketing perspective, the company strives to provide retailers complete solutions.

“We take on the brunt of the work and engage consumers in a way that drives trips, baskets, loyalty and

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Jena Sowers

Jeff Hunter

Michael Donkin

overall engagement to our retailer’s stores. Additionally, we are implementing AI models to drive incremental successes in all areas of consumer engagement,” said Whitney Parse, SVP customer engagement.

Going the extra mile

Whitney Parse

While other companies are cutting back on customer service, ARG’s leadership team has purposely gone in the opposite direction, increasing its emphasis. In fact, most at the company would agree it is one the biggest points of differentiation.

Recognizing the frustration inconsistency can cause, each retailer is assigned a dedicated, experienced staff member at ARG.

“Clients know that when they call us, not only will they talk to an experienced teammate, but it will be the same person every time,” Sowers said.

Account execs also are tasked with interacting face to face with retailers. They regularly do store tours and get to know the owners and managers.

“It’s important that they get a feel for what’s happening in the stores locally and connect one on one with our retail clients,” Donkin said.

It is this personal touch that resonates in everything the company does that helps ARG stand apart. The desire to exceed expectation is well-received by clients and reflected in the high retention rate.

“We know they have choices, and we hope they see value in the services we provide,” Sowers said. “Customer satisfaction is important to us and drives everything we do."

Vendor partnerships

ARG has clarity that without its vendor partnerships, it simply couldn’t support its retailers the way it does.

ARG’s goal is to provide simplification and solutions driven by data and be recognized by vendor partners as their most trusted advisor, delivering wholistic solutions that direct consumers to their brands.

With its vendor partners, ARG strives to be collaborative by listening and following through on their commitments by doing what they say they will do.

“We treat our vendors as true partners and work hard to drive their business to achieve the best return on investment possible. When vendors request different solutions to facilitate their success, we listen,” Sowers said.

Through the data and analytics capabilities offered by iPro Edge, vendors quickly see financial benefits.

On average, vendor partners are seeing 4.8 percent dollar growth and 4.1 percent unit growth the year after they have subscribed to iPro Edge.

For officials at Dairy Farmers of America, it’s all about trying to find ways to streamline and simplify the process as much as they can.

“The solution is difficult because there is no one-size-fits-all approach.

Through our partnership with ARG, we’ve been able to continue to evolve and help retailers with their ever-changing environment – that’s the best path forward for everyone,” said Scott Aldridge, VP of sales.

“Engaging with ARG allows you to interact with thought leaders who can help you maneuver and navigate through the complexities of the wholesale and retail environment that we find ourselves in. Working with them, we have a sense of true transparency and communication.”

Kevin Post, customer business lead for Mondelēz International, said his company would not be able to accomplish necessary day-to-day tasks without the services of ARG.

“The flexibility of program options across all these customer groups in different states has allowed us to do what we do. That partnership is paramount to our business and allowed our team to continue to excel,” Post said.

“Looking at the 1,400-plus stores we manage through ARG, there’s no way my team or business could touch that many stores the way Alliance does. I can’t imagine doing business without Alliance in our portfolio today.”

Added Donkin, “We pride ourselves in being one of the best returns on investment in the independent retailer space. We won’t ask a vendor to run a program with our retailers that doesn’t also drive their success.”

ARG has evolved to offer suite of services, including technology, marketing

Twenty years ago, Joe Wolf and Barry Maddox set out to create a company different from all others that serve independent retailers.

Having been in the industry for decades, Wolf and Maddox intuitively knew they could get independent retailers more promotional trade dollars by working directly with consumer-packaged goods companies than what the retailers could negotiate on their own.

The pair believed this was a crucial step in helping independents become more competitive in their respective markets.

They named the company Alliance Retail Group, or ARG, and started the business in 2004 with six independent retailers – Randy Stepherson, Joey Hays, Gene Wade, Ward Ragland, Greg Neumann and Scott Means.

While giving the “little guys” a leg up drove everything the company would set out to do, its founders created a unique business proposition to help them stand apart.

It was also important to them that the company be built around a strong work culture backed by a key set of core values and guiding principles.

Suite of services

Without a doubt, doing business has grown more complex over the past two decades. Engaging shoppers is now a multi-faceted endeavor.

Recognizing the need to help retailers be stronger, more profitable and navigate these changing times, ARG successfully diversified its business reach over the past two decades.

The company realized that for everyone – retailers, vendors and their teammates – to thrive, it would need to offer a suite of services that included

AT A GLANCE

▶ It is a 100 percent pass-through company, run by and for independent retailers.

▶ Negotiation strength through $16.5 billion in retail buying power.

▶ Comprehensive TPR program and long-term EDLP programs to enhance price perception in all departments.

▶ iPro and iPro Edge provide best-in-class technology and analytics to drive fact-based decisions at retail and with vendor partners.

▶ Best-in-class category management utilizing sales data, market data and consumer trends.

▶ State-of-the-art technology that provides a touchless billing and adjudication system driving reduced A/R, improved billing accuracy and the ability to track and bill complex offers and consumer events.

▶ Lowest cost of goods driven by wholistic marketing solutions with data driven ROI analysis and true sales results.

technology and marketing expertise.

In addition to negotiating the lowest cost of goods for AWG-supplied retailers, ARG’s services include full-service category management and new items programs. Those services are supported by the organization’s technology company, iPro Systems, who provides many other technical solutions to ARG retailers, the flagships of which are iPro Billing and iPro Edge. iPro Billing is a touchless billing and adjudication system that offers timely and simplified billing, and iPro Edge is an independent friendly analytics platform that uses both scan and purchase data to illuminate action ready business analytics. In addition to negotiating and technology services, ARG also provides access to a full-service marketing agency. Leveraging the strong deal negotiations from ARG and data from iPro, ARG Marketing is a uniquely positioned agency that can not only provide top-of-the-line marketing solutions and materials but measure the sales impact of those marketing vehicles in near real time to provide a receipt to retailers.

It’s the depth and breadth of services that has helped the company grow and thrive. Today, ARG members grow an average of 6.1 percent in retail sales as a direct result of the impact of these combined services.

Alliance Retail Group started out with a customer base of 56 stores supplied by Associated Wholesale Grocers. Today, it is a virtual chain of more than 1,400 stores, representing $16.5 billion in annual sales, or 70 percent of AWG business.

The group – which is celebrating its 20th anniversary – is now the largest self-negotiating ad group by retail volume in the country.

“Independent retailers are up against Kroger, Walmart and other large national chains,” said Jena Sowers, CEO of Alliance Retail Group. “To stay competitive and best serve their consumers, they look to Alliance to provide affordable services and advanced solutions that level the playing field.”

Adapting to changes

From the very first days in business, the goal was finding ways to help independent retailers move forward and spend their dollars wisely while minding a budget. Having the ability to find all the services they need under one roof has been a huge competitive advantage.

According to Sowers, the company’s iPro division was created to provide a touchless and automated billing and adjudication system for ARG retailers for scan promotions. And for ARG’s vendor partners, to be a one-stop shop to execute those scan promotions across all ARG retailer’ stores versus having to manage them store by store.

Today, iPro is the leading technology company for independent retailers in the country, supporting more than 4,000 stores. It offers complete visibility to scan and shipment data for 70 percent of AWG business. ARG’s iPro Edge

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offers best-in-industry data and analytics, utilizing shipment and consumption data.

“The forethought from our founders to create our technology subsidiary in ARG’s early years has continued to be a catalyst for our success. iPro and the technology it’s created has facilitated so much of what we are able to do for our retailers and vendor partners and is truly one of our key differentiators that we will continue to keep as central focus.” Sowers said.

ARG also owns a full-service, not-for-profit marketing agency that facilitates its retailers engaging consumers by creating custom, hyper-local advertising that resonates.

ARG handles the ads for all its clients, negotiating and publishing more than 10,000 items for temporary price reductions, with incremental trade funds for reduced shelf price.

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2006 – Houchens Industries joins, pushing the total store count beyond 200. Promotional dollars paid out to retailers that year totals $16 million.

2015 – Store count grows to 680, representing $152 million in promotional dollars paid out.

2017 – When Central Grocers in Chicago files for bankruptcy, ARG expands significantly to the north, capturing the majority of the business AWG acquired in that area.

2019 – ARG’s store count jumps to 1,000, with retail sales volume exceeding $10 billion.

2022 – Alliance negotiates, collects and pays retail members more than $310 million.

2023 – ARG serves 1,400 customers and payout exceeds $440 million for the year, with retail volume surpassing $16.5 billion.

ARG also coordinates EDLC pricing on key items that are regularly reviewed against chain competition’s everyday value pricing. “We have the ability to implement any pricing strategy with our software,” Sowers said.

The group works off one national base ad but can customize for its many independent retailers based on geography, which means it can customize an ad to match local items with the stores in that area.

She added that the three companies exist to provide retailers with solutions and services that allow them to thrive in an ultra-competitive grocery landscape.

2004

Company forms with a store count of 56

TIMELINE

Focus is on creating best-in-class personal relationships backed by integrity

When Alliance Retail Group was founded in 2004, it was with the mission to create a business model that stood out. From the start, it was important to the founders that strong business metrics were ingrained in the company’s culture.

To some, it might seem old fashioned, but they were going to build the business by doing things the right way. To them, this meant pledging to treat clients with respect and to always be transparent. It also meant always doing what they promised and, if a mistake happened, making things right.

Celebrating the company’s 20th anniversary this year, the Alliance team is continuing to follow these tenets, focusing on creating best-in-class personal relationships backed by strong integrity, believing that everything builds from there.

Not surprisingly, nearly all ARG’s business continues to come from word of mouth. As a company, ARG emphasizes personal touch with its partners.

“Our employees are dedicated to our retailers and vendor partners and their success,” said Jena Sowers, CEO. “We know if they don’t succeed, we don’t exist. Our business has always been a relationship business, and we feel it is important to truly understand our customers’ needs and help them anyway that we can.”

Guiding principles

ARG’s guiding principles are structured around the three constituents it serves – retailers, vendor partners and teammates.

• Retailers: Every decision at ARG is driven by what is in the retailers’ best interest, while protecting all information that is critical to their continued success.

ARG strives to exceed their retailers’ expectations by providing the best customer service in the industry, with prompt responsiveness and complete transparency.

• Vendor partners: By being transparent and easy to do business with, ARG strives to be the first choice of vendor investment. It seeks to drive execution and deliver the best return on investment within the wholesaler environment for vendor partners. It approaches this with the core values of professionalism, high ethical standards and transparency.

• Teammates: ARG endeavors to treat all constituents, retailers, vendor partners and employees with courtesy and respect while working as a team to drive retailer success. The company strives to protect the brand by being stewards of the business, driving transparency, respect and professionalism. ARG looks to continuously grow, learn, simplify the complex and level the playing field for independent retailers.

“We feel that if we serve and support our constituents true to our guiding principles, we will find success for all three,” Sowers said. “Having core operating values speaks to the culture and employee expectation of how we conduct business daily. We are a nonprofit, whose sole mission is doing everything we can to facilitate our retailers’ and vendor partners’ success.

“We believe that being transparent with promotional dollars, the data (business analytics) and our simplified fee structure is the key to success and differentiates us in the industry.”

Having their backs

Believing in the mission independent retailers follow and doing everything in its power to help them succeed are two more reasons ARG is successful.

“To survive through multiple generations, independent grocers need to possess a strong entrepreneurial spirit. We believe that by working as team we can level the playing field and help our retailers flourish,” Sowers said.

Regardless of where a store is located, ARG offers everyone the same expertise and resources to help them thrive.

Sowers cited the company’s mission statement: “We believe in the power of the little guys. We believe in great independent retailers winning over the big box banners. We believe in the power of family-owned stores. We believe the local grocery store is the heart of their community. We believe you can succeed, and we can help you get there.”

Go-to-market strategy

The company follows a simple six-point strategy that includes:

• 100 percent of the vendor trade funds that they negotiate go to Alliance retailers.

• Help their retailers compete at the highest level by capturing a disproportionate amount of trade funds.

• Be the CPG’s partner of choice through best-in-class performance and retail execution.

• Continue to invest in technology to provide best-in-class analytics to drive sales and profitability.

• Leverage size and scale while continuing to provide flexibility and autonomy to their member retailers.

As any smart company does, ARG invests in their team to ensure their principles and mission are carried out at the highest level possible with retailers and vendor partners as well. “Our staff is composed of experienced, dedicated professionals passionate about the independent market. Our relationships with vendors are central to our mission and every single decision we make is influenced by helping our members’ bottom line,” Sowers said.

Closing technology gap between independents, their chain store competition

ARG’s technology has continued to evolve along with its retailers over the last 20 years based upon the changing market and competitive landscape.

As company officials have noted, this includes leveraging the advantages of data utilization and machine learning on its repository of retailer data to deliver solutions for individual stores that they are not resourced to do on their own.

“Our goal,” said iPro President Mike Bokarae, “is to close the technology gap between our independents and their chain store competition. Utilizing data through our custom-built technology solutions provides an insulating advantage for our independent retailers, affording them the opportunity to experience lower costs, save time and money and see incremental revenue increase.”

ARG’s technology efforts apply to vendor partners as well.

“Our vendor partners are subjected to the same changes in market dynamics, and we continue to enhance our solutions to meet their new business needs,” said CEO Jena Sowers.

Data mining is just one example of how the company is helping independents compete. Through iPro Edge, ARG offers retailers and vendor partners a simplified business analytics tool.

“iPro Edge is the only tool of its kind in the independent retailer space that allows both retailers and vendors to share fully representative data and enjoy simplified, action ready business metrics at their fingertips,” said Megan Cappel, EVP iPro Systems.

Providing this, she added, facilitates a driving principle of ARG’s business management approach – facts matter.

“When all parties can drive the business with the same fully representative data as a single source of truth, the speed and efficiency of execution against that data delivers exponentially more for everyone,” she said.

Data analytics, category management and demand forecasting have always been important in the grocery industry. But today, these metrics are indispensable “must-haves,” Bokarae said.

“With the combination of iPro Edge, our robust category management and execution program and our AI-enhanced recommended ordering tool, we continue to evolve our solutions in this space,” he said. “These areas will continue

to be the center of focus for us and are where competitive advantages for ARG retailers will be created.”

ARG collects sales data nightly from 17 different POS systems at more than 4,000 independent retailer locations.

New ventures

ARG launched a retail media network in Q2 of this year with partner Swiftly. This new platform allows its retailers to monetize their ad space on their digital channels to brands.

“Data shows that consumers are shifting their time and attention to digital media. This is a $100-billion-a-year business that’s still growing, and we wanted to offer our retailers a seamless way to capture this interest by helping them invest in digital circulars and online media,” Sowers said.

“Similar to the original reason for creating ARG, we must leverage the size and scale of our retailers to begin collecting this incremental revenue stream that is critical for them to compete in the grocery industry.

Bokarae added, “CPGs are continuing to search for the most efficient and impactful ways to engage consumers with their brands and undoubtedly digital platforms are where they are investing. Historically, the independent landscape has been too segmented to provide a consistent ROI in the digital space.

“We are launching our own digital coupon solution free of any clip or redemption fees while reaching a virtually untouched independent shopper. This allows ARG retailers and vendors alike to unlock marketing dollars that were historically earmarked outside of the independent space, creating new consumer reach and incremental promotion.”

Future

With business strong and new ventures launching, it would be easy for ARG to sit back and relax. But that is simply not in the company’s future.

With Sowers at the helm, plans include continuing to evolve and provide retailers with solutions and services that make them as competitive and healthy as possible.

“Our end goal is to level the playing field for independent retailers and be the best investment for our vendor partners,” Sowers said. “We are only as successful as our retailers, so we will continue to listen to their needs and react accordingly.”

The same is true for vendor partners and teammates.

“Facilitating success for those three constituents will always be our focus,” she said. “Technology will play a huge part in everything that we do, but we will never lose our relationship-driven culture and doing what we say we will do.”

Mike Bokarae

Megan Cappel