NACS Association Collaboration in a Complex World

84th Annual Food Industry Association Executives ConventionNovember 8, 2011

Henry Armour, President/CEO1

Presentation Overview

• NACS »An Organizational Overview»Our Value Proposition»Our Industry

• Top Issues Confronting the Industry• Collaboration in a Complex World

» Our belief in JFK• Open Dialogue Throughout

NACS Overview

• Founded in 1961…50 Years Old This Year! • Mission: Knowledge, Connections & Advocacy• 2,400 retail member companies» Operating 80,000 stores in the USA» Operating 350,000 stores globally» Members in 44 countries

• 2,000 supplier member companies • Governed by a diverse retail board of directors • 58 staff colleagues• Headquartered in Alexandria, VA

The NACS Value Proposition• Knowledge

» State of the Industry Data (SOI) & Performance Benchmarking (CSX)» Consumer Intercept Research (CTP) » NACS Center for Achieving Foodservice Excellence (NACS Café)» Educational Programs

NACS/Cornell University Executive Leadership Program NACS Leadership Challenge for Store Supervisors Over 100 educational workshops and forums Computer based store-level training modules

» Business process improvements/technology standards (PCATS)• Connections

» NACS Show» NACS Global Forum» NACS Leadership Forum» NACStech Show

• Advocacy» Government Relations» Media Relations

4

Key Industry Facts!• Part of the everyday life of the American consumer

»146,000 stores 90,000 single store operators

»160 million transactions/day 82% of motor fuels sold in the USA (#1) 75% of tobacco products (#1) 90% of lottery products (#1) 56% of beer (#1) #2 in salty snacks, candy & package beverage

»1.6 million employees» In virtually every community of America»The store is increasingly relevant

68% of facility gross profit dollars 28% of inside gross profit dollars is foodservice

Weathering the Great Recession!

2007 2008 2009 2010‘10

Change

Industry Stores 146,294 144,875 144,541 146,341 1.2%

Industry Sales $577B $624B $511B $576B 12.6%

Industry Profits $3.4B $5.2B $4.8B $6.5B $1.7B

Credit Card Fees $7.6B $8.4B $7.4B $9.0B $1.6B

Number of Employees

1,714,330 1,727,700 1,580,000 1,601,000 -.-%

Source: NACS State of the Industry Database powered by CSX

Top Advocacy Issues

• Swipe fees• FDA tobacco• Menu labeling• The Nutrition/Obesity Issue• Health care reform• Renewable fuel standard/E15+

Collaborative Advocacy

• Family vs. Share Group vs. Coalition Models• Guiding Principles – JFK’s: Focus on what Unites Us not on what Divides Us» Interest sets and policy positions will not always align

– Always keep the end, the objective, in mind» The poison of association politics

– Understanding Relative Resources» Not everyone brings the same things to the table» Equality of commitment is what’s important» Trust & Respect despite size

Collaborative Model• Family

» NACS and state associations» (Almost) perfectly aligned interests» Synergistic power: resources + grassroots» Respect

• Share Groups» NACS/API/SIGMA/PMAA/NATSO, GGAC» Common interest spheres » Information sharing, POSSIBLE position alignment» Back scratching potential

• Coalitions» MPC, LUST Taskforce» Common issue focus» Resource sharing, common position (but only on this issue)» Can be strange bed-fellows & relative resource contribution friction

So What Do You Think?Q&A Time

NACS Contact Information

Henry ArmourPresident & Chief Executive Officer +1.703.518.4282harmour@nacsonline.comwww.nacsonline.com

FIAE Excelling in Today’s Food Industry

84th Annual Food Industry Association Executives ConventionNovember 8, 2011

12