Online Grocer Exchange Heralded

SAN MATEO (06/14/2000) - Forty nine food and beverage companies from The Grocery Manufacturers of America (GMA), including The Coca-Cola Company and Kraft Foods, on Wednesday announced the formation of a new business-to-business e-marketplace, Transora.com, at a Web cast from New York.

The companies, which represent more than $500 billion in sales annually, committed close to $250 million to fund the new exchange. Transora is expected to begin handling transactions at the end of 2000.

The idea for the exchange was formulated in March 2000, when e-business executives from food and beverage suppliers met in New York to discuss e-business. They put together an executive steering committee and hired PricewaterhouseCoopers LLP for e-business consulting support. Wednesday's announcement was the result of their efforts.

Although a CEO has yet to be named, the announcement did outline the business model for Transora. GMA plans to make the exchange more than a simple procurement site and wants to provide vendor and product catalogs, online order management, supply-chain collaboration, and financial services.

The move was the latest example of well-established brick-and-mortar companies with equity asserting themselves in vertical markets.

Matthew Sanders, an e-business analyst at Forrester Research Inc., of Cambridge, Massachusetts, believes Transora has a good chance for success because the business model was thought out diligently before Wednesday's Web cast. GMA said it was not motivated by any thoughts of a hurried IPO to cash in on their new exchange.

"Companies need to understand that vertical markets are not a financial venture, but rather a business solution," Sanders said.

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