Food Industry Business: A Bumper Crop of New CEOs

Baby Boomers (and one Gen Xer) are taking the helms of top food companies.

By Diane Toops, News & Trends Editor

Share Print Related RSS

Maybe it was the recession. Maybe the golden parachutes. Perhaps there's too much pressure now at the top. It seems to us there has been an unusually high turnover among chief executive officers at leading food & beverage companies over the past 14 months.

Since November of 2009, we count six new CEOs (plus two divisional CEOs, three COOs and three unit presidents) among the 37 largest U.S. and Canadian food & beverage companies (as ranked by the Food Processing Top 100©). Interestingly, six in this story have taken over just this year.

It looks like the baby boomers are taking over. Between 46 and 65 years old, those postwar babies are in their prime to be leading companies. However, one CEO included in this report – John Bryant at Kellogg – is one year too young to even qualify as a boomer.

A generation some 76 million strong, the first wave of baby boomers turned 65 on Dec. 25. According to Pew Research Center, the typical boomer feels nine years younger and thinks "old age" starts at age 72. It's no wonder many are vigorously ensconced in their career success and continue to lead their companies to success. At the same time, we see several choosing to retire early to spend some quality years enjoying the fruits of their labors.

Of the leaders we highlight -- three are foreign-born — from Britain, Australia, Spain. Three are veterans of Proctor & Gamble's world-famous management training program, most have international experience and, unlike our 2008 report, which included two new female chief executives, all are men (Denise Morrison, CEO-designate at Campbell Soup, took a last-minute pass on this story, Sarah Robb O'Hagan of Gatorade is featured).

By the way, there remains a job opening at the top of Sara Lee, in case any of you are interested.

We asked them to give us outlooks for the whole food industry on the year ahead and for their companies, and to hint at some of the changes they'll be making now that they are in charge.

CEO: Donald (Donnie) Smith, Tyson Foods Inc.

Since being named Tyson Foods Inc.'s  CEO in November 2009, Donnie Smith has steered the Springdale, Ark., company through one of its most tumultuous periods. Worldwide sales that year had dropped (not an unusual thing for Tyson) and the company reported a huge net loss of $551 million. Dick Bond, leader since the 2001 IBP acquisition (where he came from), left suddenly at the start of 2009, and Tyson temporarily was being headed by its 71-year-old former CEO from the 1990s, Leland Tollett.

While he can't take full credit for the turnaround, Smith, then just 50, certainly was a part of it as senior group vice president of Tyson's key poultry and prepared foods business. Sales in fiscal 2010 jumped 6.5 percent, to $28.4 billion, and more important was the $765 million net profit. It's all good news for the 115,000 team members employed at more than 400 facilities and offices in the U.S. and 100 countries around the world.

Smith joined Tyson in 1980 right out of college; he graduated from the University of Tennessee with a degree in animal science. He's a classic case of learning all the ropes. In his 30 years at Tyson, he worked in purchasing, environmental, health and safety, food safety and quality assurance, manufacturing services, information systems and logistics.

"Looking forward into 2011, we obviously have some turbulence to deal with," Smith says. "Inputs, especially corn, are going to be a challenge, but we're doing everything we can to offset those inputs through pricing, operational efficiencies and managing our product mix."

The 2009 stall in capital investment is over. "We began in late 2009 and we'll continue through 2011 investing capital in the vast majority of our domestic chicken plants. In our fresh plants, the primary focus of our capital spend is to increase yield, labor and line efficiencies while concurrently improving our flexibility to produce a more market-relevant product mix," he said. "We're also investing in our further-processing plants to improve line efficiencies to keep pace with customer demand for our value added products. The investment and size of the profit improvement projects differ from plant to plant, but many of them will produce a return of between 25 percent and 40 percent. We still have work to do, but we feel very good about our ability to mitigate at least some of the increased inputs with lower conversion costs."

On the demand side, Smith doesn't see any decline in U.S. protein consumption in 2011, but it looks like growth will be limited.

"In foodservice, if current trends hold, we predict sales to be about unchanged to maybe up 1 percent," he said. "Several foodservice operators are reporting positive comps, but there are still plenty signs of weakness. We think chicken volume at foodservice may be up around 1 percent in 2011 [driven by lower supplies and higher prices of competing animal proteins]. Intuitively, you would think chicken demand would improve as beef and pork prices increase, but there doesn't appear to be protein substitution on the menus at this point."

"Consumers are still cautious about the economy," he sums. "With that said, based on everything we can see now, 2011 will be a good year for us because of our multi-protein, multi-channel business model."

CEO: John Bryant, Kellogg Co.

One Australian native just handed the baton to another at Battle Creek, Mich.-based Kellogg Co.. John Bryant – at 45, he's among the first wave of Generation X -- was promoted from COO to president/CEO effective Jan. 2, following the announcement that A. D. David Mackay decided to retire after four years as CEO to spend more time with his family.

"While there is no question that 2011 is going to continue to be a tough environment for the entire industry, Kellogg is focused on regaining our momentum to deliver the sustainable results that we've seen for most of the last decade," Bryant, told Food Processing. "Our categories are very responsive to brand-building, innovation and nutrition. We plan to further increase our investment and activities in these key areas."

Kellogg is one of several companies we noted in our Top 100© report that saw its sales dip in 2009 (down 2 percent to $12.6 billion worldwide) but its net income increase (up 6 percent to $1.2 billion). But it hasn't been easy. Kellogg expects low single-digit internal net sales growth in 2011, flat to down 2 percent internal operating profit, and low single-digit earnings-per-share growth.

With all those numbers to crunch, maybe the company needs to be led by an accountant.

Bryant received his bachelor's degree in commerce from Australian National University and is a chartered accountant of the Institute of Chartered Accountants In Australia. He also earned an MBA from University of Pennsylvania's Wharton School. He held a leadership position with Lion Nathan Australia, a beer, wine and spirits distributor, where he served as a planning director from 1997-1998.

Bryant joined Kellogg in 1998 and has held numerous leadership roles. He led the Kellogg North America and Kellogg International business units, served as CFO from 2002 to 2004, as well as from 2006 to 2009, and assumed his the role of COO in 2008. Last July he was elected to the board of directors.

Bryant kind of dodged our question about changes he plans to make now that he is CEO. "One of the great things about this company is our rich heritage of success -- we have more than 100 years of legacy that we are building on. Our goal is to leverage that great strength and to bring it to life in the future. This requires us to change our approach with the changing consumer landscape. For example, we have an increased focus on areas such as Hispanic marketing and social media."

But he implied the company needs to crank up the new product machine. "In 2011, we have a significantly stronger innovation pipeline than we had in 2009/2010. We are excited about the launch of a great lineup of new products, such as Kellogg's Crunchy Nut cereal and Special K Cracker Chips."

COO: Neil Cracknell, Golden State Foods

Golden State Foods is one of those stealth food processors. Despite having $4 billion in sales, you won't find its name on anything; you won't even find its products in a grocery store. But you will at McDonald's restaurants.

It helps the Golden Arches shine with products including beef patties, Big Mac sauce (which it helped formulate), buns, ketchup and mayonnaise. Golden State distributes goods to more than 20,000 quick-service eateries from 20 distribution centers. It helped launch McDonald's in international markets, which currently span more than 120 countries, and has diversified with 50 more customers since 1967. And up until last December, it was run by a small group of insiders at Wetterau Associates, the investment firm that owns it, with Mark Wetterau remaining Golden State's CEO.

With a number of retirements and other changes at the top, Golden State, Irvine, Calif., plucked ingredient supplier Sensient Technologies' president/COO Neil Cracknell, to be Golden State's executive vice president and COO.

A graduate of England's Loughborough University with a B.S. in human biology, Cracknell earned his MBA from the University of Bath. His whole career has been at Sensient, starting in sales and marketing in 1994 at Sensient Food Colors Europe. He became vice president of pharmaceutical technologies at Sensient Colors Group, division president at Sensient Dehydrated Flavors Group, president of Sensient Flavors and Fragrances Group and then president and COO at Sensient Technologies.

So while new to Golden State, Cracknell has watched the pulse of the food industry for years. "2011 will see an increasing focus in the food industry on nutrition and sustainability," he told us. "As the nutritional demands of consumers change, there are tremendous opportunities for us to demonstrate our expertise at formulation, whether it is reformulating an existing product with a lower sodium content or developing entirely new products, such as beverages.

"As [foodservice] customers look to enhance the sustainability of their supply chain, we have a tremendous opportunity to innovate in our facilities, through new practices or technology, to improve the efficiencies and security of our supply chain.

"Food safety will continue to be a paramount priority in the coming years within the foodservice industry," he continues. "Thus, GSF has chosen to certify its manufacturing plants through BRC accreditation as part of its global food safety initiative."

As a relatively new COO, what changes does he plan to make? "Building on GSF's values-driven success for more than 60 years, my goal as COO is to continue to drive profitable growth, while maintaining those values which have made us successful decade after decade," he says. "One of the main challenges is managing that growth, particularly with our 1,000 new associates and hundreds of new positions created over the past year; it is a period of dynamic evolution at Golden State. One of the great strengths of the company that I have observed so far is the ability of the team to take on new challenges and accept growth-related change as the company has evolved."

How will Golden State maintain growth? "We must continue to provide innovation in product and service to our customers, while delivering industry-leading standards of quality and service," he responded. "We will certainly review opportunities to enter new product and geographic markets. In particular, we see significant opportunities for GSF to expand globally. Likewise, we will continue to develop our people at GSF, expanding our GSF University training and education program internationally, a wonderful tool to ensure that our associates are equipped to deal with tomorrow's challenges."

CEO: Brian Driscoll, Hostess Brands

Hostess Brands Inc.  finally may be on firm footing again. With Interstate Bakeries Corp. emerging from bankruptcy protection under the Hostess name in early 2009, Craig Jung felt he could retire after shepherding the company through four-plus years of reorganization. Now majority-owned by private equity firm Ripplewood Holdings, Hostess moved to Irving, Texas, after many years in Kansas City, Mo.

Meanwhile, Brian Driscoll was instrumental in Kraft Foods' early 2010 acquisition of Cadbury PLC. He was Kraft's president of sales, customer service and logistics. Perhaps he, too, felt "mission accomplished," and it was time to move on to another challenge.

Well, they found each other. Driscoll, 51, was appointed CEO of Hostess Brands in June 2010.

Driscoll earned his B.S. degree from St. John's University College of Business Administration, and completed Northwestern University's Kellogg School CEO Perspective Program while at Kraft. He began his career in 1980 as a metro New York sales rep for Procter & Gamble, rising in the sales ranks before joining Nestlé Foods in 1985, where he served in a variety of executive roles in sales and management. In 1995, he joined Nabisco to lead their warehouse products sales and integrated logistics organization, then was promoted to senior vice president for biscuit direct store delivery sales and customer service.

He went to Kraft when it acquired Nabisco in 2000.

"Hostess is an iconic brand name in the fresh-baked bread and sweet goods sector, and I believe we have many opportunities to leverage our brand and expand market share," says Driscoll.

"We are moving into a new phase of growth at Hostess Brands which we believe parallels perfectly with the broad food experience that Brian brings to Hostess," said Chairman John Cahill. "Brian is a proven leader with the ability to unlock brand power, enhance distribution systems, and inspire people. We are confident that he will quickly gain the trust of our valued employees, as well as customers at more than 190,000 locations across the nation."

Operating 39 bakeries throughout the U.S. with some 21,000 employees and with 2009 revenues estimated at $2.7 billion, Hostess has some challenges ahead. At a time when consumers want foods perceived as natural, healthy and premium, changes will likely be made in its sweet goods, or snacks. Bread, on the other hand, is a real opportunity. Hostess has partnered with the National Sodium Reduction Initiative (NSRI), to reduce sodium levels in its bread portfolio by 2012. And the introduction of the Nature's Pride bread, a line of whole wheat bread with no corn sugar, trans fats or artificial ingredients, was the centerpiece of post-bankruptcy new products activity in 2009. The introduction proved pivotal in the overall 7.7 percent gain in unit sales for Hostess in 2009, as measured by Symphony IRI.

Four Divisional Presidents and an Interesting EVP

Share Print Reprints Permissions

What are your comments?

Join the discussion today. Login Here.

Comments

No one has commented on this page yet.

RSS feed for comments on this page | RSS feed for all comments