Snack Food Association - Acrylamide Information Center

A wealth of new ideas and insight into how middle management executives can strengthen the position of their companies for growth was provided by a long list of experts during the SFA Management Workshop held in Gettysburg, PA, Oct. 21-23.

Management consultant Steve Wiley, founder of The Wiley Group, presented the opening address, drawing an analogy between the success of the northern army in the Civil War’s Battle of Gettysburg and success in business. “Leadership made the difference in the Civil War and it is critical to the success of your organization,” he said.

Wiley was one of 13 speakers who covered key topics for the 75 snack food industry sales and marketing and manufacturing and technology professionals who attended the Workshop.

He stressed the importance of establishing positive relationships with customers, noting that 86 percent of sales occur because of those relationships. “People buy from people,” he said, urging sales execs to forgo standard scripts and be flexible with requirements of process and procedure.

Wiley also emphasized the importance of anticipating developments and responding when opportunities present themselves, such as when a competitor stumbles, and he encouraged sales execs to whenever possible “plant seeds” that some day might result in new business opportunities.

Like an army, Wiley said, every successful company must protect the “high ground” – that core quality that provides a point of differentiation. Later, conference attendees suggested those might include a company’s focus on innovation or understanding that consumer concern about health and wellness is growing in importance and then offering products that meet those needs.

“Are you prepared?” Wiley asked his audience.

“I’ve been challenged,” said John Sommers, director of operations at Pretzels, Inc. “These speakers are forcing me to think outside the box. And rubbing shoulders with competitors, vendors and peers, it is pushing us to think and giving us an opportunity to explore ideas. This is an excellent event.”

“This is the best program we’ve had for our middle management people in a long time,” said SFA Chairman Tom Dempsey, Utz Quality Foods. “If you are not sending your people here, you are missing out on an opportunity for personal development.”

Jack Newman, regional sales manager at TNA Solutions, said he had taken three pages of notes during Wiley’s presentation. “I’ve been to a lot of these meetings,” he said. “This is outstanding.”

But the key, said Mike Gilmartin, president, Commercial Creamery Co., is following through. “I will take my information home and get my team to do something,” he said.

Capitalizing on Opportunity

While Wiley challenged his audience to think about their performance as leaders, industry entrepreneur Steven Bernard told the story of how he responded to an opportunity that he recognized and launched Cape Cod Potato Chips, later to sell it – twice.

Now, he and his daughter, Nicole, own and operate Late July Organic Snacks, a new company they launched after recognizing the growing consumer interest in organic foods. They now have plans to take it national, and even international.

Bernard encouraged his peers to pay attention to organics. “It’s such a viable business,” he told conference attendees. “We think we’re onto something,” he said, adding that organic crackers is a category that is “underutilized”.

“One thing I do know,” he observed, “is the harder I worked, the luckier I got.”

Understanding Retail Trends

Sales and marketing executives were encouraged to pay close attention to the changing face of the supermarket industry, which is responding to consumers’ increasing needs for convenience, their interest in health and wellness, as well as the industry’s concern about energy and waste management.

Supermarket s are changing their stores to emphasize the “shopping experience” for customers, and snack food companies should consider how they can be part of these new formats and opportunities, advised Paula Payton, Oxford Institute of Retail Management.

Payton outlined new formats and store designs recently implemented or just being implemented by major chains like Safeway and Kroger and newcomer Tesco from the U.K., with its new 10,000 sq. ft. Fresh & Easy Neighborhood Markets.

She said supermarkets want consistency to meet shoppers’ needs – having items in stock every day; providing a familiar layout and assortment; having price clarity; implementing effective replenishment systems and processes. All these factors are geared, she said, to meeting the customer’s needs for a convenient, stress-free, satisfying and successful shopping experience. Yet, they want stores exciting, too, with new products and fresh approaches that respond to shoppers’ changing needs.

Health and nutrition and energy conservation are both important factors guiding supermarkets today that snack food executives must recognize, she pointed out, noting one supermarket chain that has implemented a “guiding stars” process to let consumers know the healthy attributes of packaged foods.

“I think we’ll see more of this from other companies,” Payton predicted. “Suppliers with products in these areas will be handed a huge opportunity to develop this.”

The focus on “green” in store designs affects packaging, she pointed out, noting that the use of LED lighting changes the appearance of packages previously displayed under florescent lights. It’s a widespread movement that will grow, said Payton.

By recognizing changes at retail, Payton said suppliers “can add value by repositioning their category to better align with shoppers.” Change adjacencies through the use of shopper research and data, she advised, saying that suppliers should make every effort to integrate with private label, which “will be at new levels of quality and innovation.”

Winning suppliers, she said, will be those with “flexible organizations that are able to share information easily across accounts, customers, and functional areas of responsibility.”

Food Security – Be Prepared

Rod Wheeler, food defense specialist at AIB International, encouraged companies to strengthen security operations to prevent product tampering and potential catastrophes.

“Think like an attacker when you are walking through your facility,” he advised, noting that attacks can result from both outside and inside threats and urged employers to conduct background checks when hiring, including temporary and seasonal workers.

He advised companies to use effective security equipment, including cameras, locks, and other electronic devices where appropriate. And, he said,

every company should have an evacuation plan and a Crisis Management Food Defense Team.

“Develop a documented crisis incident plan,” Wheeler said. “You don’t want to wait until the Katrina of the Food Industry hits. You need to have a plan in place in advance. It should include processes for handling threats and actual cases of product tampering and there should be a plan for each facility. All employees should be trained and encouraged to report any sign of possible product tampering or break in food security.”

Stand Up for the Industry, Daryl Thomas Advises

The snack food industry is a solid, growing, responsible industry of which members should be proud, SFA Vice Chairman Daryl Thomas, senior vice president of sales & marketing at Herr Foods Inc., told attendees at the 2007 Management Workshop in Gettysburg, PA October 23.

He pointed out that the industry generates $26 billion in annual sales, has a 4.5 percent annual growth rate, and pays $1.4 billion in taxes and $65 million to charities. “It’s the backbone of many local economies and the source of lifelong careers,” he said.

Thomas, who is slated to become chairman of SFA at SNAXPO 2008 next March, emphasized that snack food products “fit into a healthy lifestyle and a balanced diet,” adding that moderation is “the key” to a healthy diet.

While noting that the snack food industry is one of opportunity, Thomas pointed out that the world is changing. “June Cleaver doesn’t live here any more,” he said, referring to the two-earner households that now dominate the American culture. Other demographic influences, such as the aging of our population, also influence the industry, he said.

“All of this requires that we focus our efforts and respond to make sure that our industry stays relevant in the marketplace,” he said.

Thomas offered this advice:

Be responsive. “You can keep doing what you’ve always done, but there is no guarantee you’ll keep getting what you’ve always got.”
Be aware and willing to react and change.
Be creative. “Don’t just think outside the box. We need to stomp the box into little pieces.”
Stay flexible. “Reconsider how and with whom you are doing business and with what products.”
Continue to evolve. “We need to try new things as well as staying with what’s working.”
No substitute for tenacity. “We have to be positive about our industry. Make sure we stand up and our vocal.”
Be activists. “SFA is the voice of our industry in schools, with government, with the media.

The Challenge of Sustainability

The concept of sustainability – meeting the needs of the present without limiting the ability of future generations to do the same – is becoming a driving force in business and snack food companies were strongly encouraged to get on board during the SFA management Workshop October 22.

Today’s reality, according to Don Carli, senior research fellow at the Institute for Sustainable Communications, is that pressure from retail customers along with government and even consumers mean product manufacturers must find ways to reduce their own “carbon footprint”, limiting their impact on energy, the environment, and natural resources in every aspect of their operations, including the supply chain.

Carli emphasized new policies established by Wal-Mart that will require vendors to meet specific sustainability standards if they want to do business with the world’s largest retailer. He said governments at virtually every level have passed or are considering legislation requiring companies to reduce greenhouse gas emissions and even taxing those emissions.

Consumers and the next generation of employees all care as well, Carli said, and it’s not enough for a company to make positive statements about being concerned about the environment. “All it takes is somebody with a cell phone camera to expose the conflict between what a company is saying and doing,” he warned. “The next thing you know, it’s on a blog, and then it’s on Fox News. And that affects investors, insurers, and brand owners.”

“Sustainability and the way you address it will increasingly determine the value of your brand,” Carli said. “It is the new IQ test for management.”

Management Workshop Takeaways

Selling Based on ‘Values’

The importance of establishing and following a set of core values and principles when selling was emphasized by marketing consultant Tom Richard, Waterville, OH in a sales and marketing breakout session.

“Take a second look at the way you do things,” he advised. “Question everything you do. When you stick to your values, you will make more money and you will have more fun.”

Richard said his sales philosophy is based on this set of values:

Provide value first without expectation of return.
Trust that compensation will be in direct proportion to your service. “You can’t trick anybody.”

Make a friend at all costs – regardless of what they can do for you. New Product Opportunities.

Dr. John B. Lord, professor and chairperson of food marketing at Saint Joseph’s University, advised sales and marketing professionals to examine new product opportunities by analyzing consumer trends, category growth, and category segmentation.

Look externally to demographic and lifestyle data, industry surveys, business publications, category trends and growth segments, as well as at competitive activity. Travel abroad, he advised, to see what is happening in Europe and elsewhere in the world.

Look internally, too, he added, using your own market research, research and development, studying successful ideas from other brands or other markets, and using consumer hotlines and response centers.

Consider the company’s core competencies when considering a new product, noting a need to leverage brand platforms, consumer and customer platforms, distribution and technology. Sales potential must be considered, including market size, anticipated growth rate of sales, and length of the product cycle.

Factors that influence potential profitability, Lord added, include cost of entry, time needed to become established, vulnerability of competition, and the potential to create product advantage.

Successful Recruiting

Stephanie Peters, Regional Vice President, SESCO Management Consultants, offered manufacturing and technology executives advice on establishing a successful recruiting program.

“You need to have a clear, crystal view of exactly what you are looking for,” she said, “not, ‘I’ll know it when I see it.’”