BUSINESSWEEK ONLINE:   Business Week ebiz


Business Week e.biz
Movers & Shakers By Steve Hamm August 11, 1999


Can She Build a Global Food Exchange out of Bytes?
efdex CEO Ellen Marram is a food and beverage veteran with a keen eye for the customer. That should help bring industry players into her electronic trading system

As the CEO of Tropicana, Ellen Marram in just five years transformed a stagnant brand into a highly profitable market leader capable of commanding a premium price for its orange juice products. Now she's hoping to use her 30 years of food and beverage experience to help streamline the entire $11 trillion industry. How? By creating a worldwide electronic trading system for everything from soup to coconuts.

On Aug. 4, Marram was appointed CEO of Internet player efdex. The Stamford (Conn.) company -- whose initials stand for electronic food and beverage exchange -- plans to launch an online trading site in Britain in November and in the U.S. early next year.

 IBM'S AID. efdex is the brainchild of Tim Carron-Brown, its British chairman, a former food-business trade-magazine publisher who was inspired by Netscape Communications Corp.'s Web browser and formed the company in 1995. The idea was to provide food industry companies with comparative pricing along with supply information and analysis. Plus, an electronic marketplace would bring together thousands of buyers and suppliers who could conduct transactions with the push of a button. "We are helping people to migrate from the phone and scraps of paper to electronic business," says Brown.

It took four years to build the technology underpinnings for that migration. But with a lot of help from IBM, the platform is ready to go, so Brown set out to find a CEO who can turn his vision into a virtual reality. Marram, age 50, fits the bill thanks to her deep knowledge of the food industry and commitment to meeting customer expectations. "She's almost obsessive about understanding the customer," Brown says. And she has managed a worldwide operation at Tropicana, he notes.

 

Her approach: Don't flip out food execs. "This starts off being evolutionary, not revolutionary"
 

Now the question is whether Marram can handle the huge task of persuading thousands of companies to trust her outfit's technology and choose it as their beachhead in the new world of business-to-business E-commerce. Her approach: Don't flip them out. Rather than shaking up industry executives by preaching that they have to do everything differently, she's urging people to start by migrating their existing business relationships online. Later, they can find new customers or suppliers through the exchange and perhaps remodel their businesses in more profound ways. "This starts off being evolutionary, not revolutionary," she says. "You can make a lot of improvements to an industry like this without radically transforming it all at once."

efdex is in for the long haul. It has raised $40 million from individuals and institutional investors and is about to raise $75 million more to pay for the British and U.S. buildouts. A trial program launch now is designed to get customers comfortable with an online community and to give them time to set up electronic links with their trading partners. There already are 200 buyers and sellers participating -- a number Marram expects to grow to 3,000 by the end of October.

 PERSONAL TOUCH. Some of the early adopters have high expectations. "There are tens of thousands of hotels and restaurants we need to reach," says Steve Gray, a managing director at Italian pasta maker Barilla, which is participating in efdex' test run in Britain. "Now...we can get our message out to the right people in a timely and efficient fashion."

Marram's goal is to make that process as painless as possible. The system is accessible via an ordinary Web browser that uses simple commands. But efdex is serious about providing a personal touch, too. "The key is customer service," she says. "We can't just sign a lot of companies up. We've got to train them on how to use the system." That's no idle promise. Nearly half of efdex' employees are in customer support and consulting. Eventually, that number is expected to increase to 60% or 70%.

 

As CEO, Marram turned Tropicana's use of fresh juice into a marketing coup and made the company truly global
 

Marram's success at Tropicana came largely because she was attuned to customers' needs and tastes. Before Marram was hired by Seagram's in 1989 to run the juice subsidiary, Tropicana saw itself as a commodity orange juice business: If you squeeze it, they will come. But Marram saw that consumers were increasingly interested in healthy beverages. She made a marketing coup out of Tropicana's process of using fresh juice -- not concentrate. She added vitamins and minerals, like calcium. And she got the American Medical Assn. to endorse orange juice and slapped that label on Tropicana cartons.

Her other breakthrough was transforming Tropicana into a global organization. Previously, it had been Florida-centric. But she established new plants in Europe and Asia and bought Asian orange groves. She also cut worldwide deals with distributors and large grocery chains. Perhaps the most important thing she did was persuading Tropicana employees to take a fresh look at their business. "She convinced the organization that the way of the future was a more distributed environment -- and that that would result in growth and profits. And that happened," says Terry Danahy, director of human resouces at Tropicana, who worked for Marram for four years.

After Marram fattened Tropicana up, Seagram sold it to PepsiCo for $3.3 billion last summer -- reaping a nice profit on a property they had paid just $1.2 billion for. Marram decided to take some time off to recharge. She traveled, took a French class, bought a PC, and tried surfing the Net. When she was rested, she began casting around for her next job -- which she hoped would be heading a company. She didn't want to run an old-fashioned business, and she thought a lot about the Internet startups, which were working on "solutions searching for problems." But efdex seemed just right. "It's a combination of E-business with an industry I've been in for 30 years," she says.

 SEEING THE "PAIN POINT." Her first priority is building the staff and organization that can support thousands of customers. efdex' business model is to sell advertising, charge participants for information and analysis -- then take a commission on transactions. Marram vows not to rush things. She wants to get it right the first time.

But she can't afford to dawdle, either. Another company, Instill Corp. of Palo Alto, Calif., already has a headstart in providing an electronic exchange for large food suppliers in the U.S. And VerticalNet Inc. of Horsham, Pa., operates 43 industry-specific communities -- including several in the food business -- and plans on creating exchanges for all of them.

Marram may have some advantages over the competition, however. Instill doesn't provide real-time trading. And some observers think VerticalNet is trying to do too many things at once. "It's very important to have somebody like Marram who knows an industry and is focused on doing one thing well," says analyst Leah Knight of market researcher Dataquest Inc. "It takes somebody with industry experience to understand where its pain point is."

If Marram can kill pain as effectively as she squeezed oranges, efdex may yet become a major player in E-business.

Hamm covers software for Business Week in New York.


_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _


Ellen Marram: CEO of efdex


WEB POINTERS
Click here to visit sites mentioned in the story:
efdex (under construction)
Instill
VerticalNet
Dataquest



Copyright 2000, by The McGraw-Hill Companies Inc. All rights reserved.
Terms of Use   Privacy Policy