Diverse suppliers help companies to innovate and promote economic empowerment
Supplier Diversity
Kroger
By Luana Ferreira
Companies that invest in supplier diversity programs not only strengthen their business but also improve their customer's experience, create economic opportunities for minorities and impact the community on different levels. Kroger, one of the largest grocer in the U.S., is aware of the importance of diversity on different levels and is constantly improving its award-winning Supplier Diversity & Inclusion Program.
Angel Colon has worked at Kroger for nearly 15 years and is responsible for its Diversity Equity Inclusion Initiative. Colon states that its mission is to identify, cultivate and develop partnerships with certified diverse owned businesses. This allows Kroger to deliver exceptional products to our customers and create a positive impact in the communities we live and serve.
Being part of Kroger's diverse suppliers is a process that involves different levels of expertise. "That's very challenging, and we develop webinars and series to focus on those areas they need," says Colon.
The diversity is not only on their shelves. Colon explains that they invest in diverse suppliers when buying raw materials, they use and construction companies to build their stores over the country.
The program was created thirty years ago, and the numbers prove its moving in the right direction. "We create economic empowerment. We want to generate wealth and prosperity in the communities of our suppliers. So through our minority suppliers, we have helped create over 20,000 jobs and over $1 billion in wages. That's a true economic impact because it not only creates jobs and wages but also brings taxes to those communities," says Colon.
Kroger is part of a select group of companies in the U.S. that spends $1 billion or more with their suppliers and investing in diverse suppliers is crucial for them. In 2020, they created a Diversity, Equity and Inclusion framework and committed to spending $10 billion by 2030.
This money can help those communities to build schools and invest in education, for example. Colon defines it as a "tremendous ripple effect." He recalls that one of the suppliers from Ghana started selling their product in five stores and expanded to over one thousand of them. They recently built the first water well in their community in Ghana.
Kroger also benefits from the program. A diverse pipeline helps them better understand their final consumer in a constantly changing country. It assures the company will remain relevant through the years. Diversity also allows companies to have more innovation.
For example, in 2021, Kroger launched a program called 'Go Fresh' and Local Supplier Accelerator Experience, which offered opportunities for suppliers to collaborate and help them grow and innovate. "We selected five winners, four of whom were multicultural or women. And that tells you a lot about the innovation part," says Colon.
Kroger selects their supplies in two different ways. One of them is promoting an annual summit and inviting suppliers and potential vendors. They are also part of certified organizations, which provides exposure to finding suitable suppliers. "We are members of those organizations, and they have events throughout the year. We go to those events and meet the suppliers there and based in the quality of the products or services, they may end up being on our shelves.
When selecting a supplier, Colon looks for unique and sustainable products. They should also have experience working with retail and be able to attend to increasing demands. "We're a large customer, so these companies must be able to scale their businesses. Growth can come quickly and with a high demand for product.”
"We have a Hispanic vendor who's still serving us. Their first purchase order was around $100 many years ago, and today they're doing over $100 million with Kroger. So, imagine the lives they have impacted in their country and here in the U.S. That's what drives me daily," he says.
International foods are driving growth in the food industry now, and Colon believes Latinos should take advantage of that, as Mexican food is among the favorite in the country. Another piece of advice he gives to potential suppliers is to look for gaps in their stores that they can fill.
Colon recommends that suppliers ensure they know their numbers and what is happening in the market. They should ensure that people working with them are familiar with the retail business and understand the expectations of the decision makers and category managers.
After thirty years in the food industry, Colon is inspired to promote inclusion further and help improve thousands of people's lives. "At the end of the day, we want to see other communities flourish."
** Editor’s pick: When selecting a supplier, Colon looks for unique and sustainable products
Photo credit: Courtesy of Kroger