Many of the bluest of blue-chip companies in the food and beverage sector changed leaders toward the start of 2017. Six of the companies have annual sales totaling more than a quarter trillion dollars with industries touching many corners of the food and beverage business, including leaders in confectionery, frozen foods, meat, carbonated soft drinks, coffee and convenience foods.
Announcements of the leadership changes snowballed as the year came to an end. While CEO successions were detailed at Nestle SA and Hormel Foods Corp. in June and September, respectively, four of the announcements came over the span of about a one-month period ending Dec. 22 and included The Coca Cola Co., The Hershey Co., Starbucks Corp., and Tyson Foods, Inc.
In certain instances, the new chief executives come to their positions following long careers away from the food industry, underscoring the determination of the boards of leading food companies to chart a fundamentally different course forward for the businesses. As the new leaders make their mark on their respective companies, the ripple effect across the entire food and beverage industry is likely to be profound.
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Tyson Foods, Inc.
SPRINGDALE, Ark. — Following the acquisition of Hillshire Brands in 2014, Tyson Foods, Inc. executives described the soon-to-be “prepared foods powerhouse” Tyson 2.0. With the Hillshire business integrated into the company, many are wondering what Tyson 3.0 may look like. It will be Tom Hayes’ job to define the Tyson Foods of the future.
Hayes takes the helm as CEO of Tyson Foods, Inc., succeeding Donnie Smith, at a time of transition for one of the world’s largest meat-protein companies. During a Dec. 7 presentation at the Sanford C. Bernstein Consumer Summit, Hayes gave a preview of the direction Tyson Foods may take under his leadership. This past October, Tyson Foods took a minority stake in the plant-based protein company Beyond Meat, El Segundo, Calif., signaling Tyson Foods’ intent to diversify beyond its core market.
“What we want to do is make sure wherever consumers are interested in protein, that we’re providing a solution that is great-tasting and that’s what we’ve been up to for the last several years and, certainly, within the last year,” he said during the Dec. 7 conference.
Hayes has spent 29 years in the consumer products industry. In June 2016 he was promoted to president of Tyson Foods. Prior to that, Hayes was chief commercial officer at Tyson Foods, and before that he was president of food service. Previously, Hayes was chief supply chain officer for The Hillshire Brands.
“When Tyson acquired Hillshire Brands in 2014, with the support of the board and the family, we embarked on a new strategy to integrate the strengths and products of each company into one company, and the resulting hybrid model has been a success in no small part thanks to Tom’s strategic, operational and commercial accomplishments,” Smith said. “I am confident that Tom is the right CEO to continue the transition we have started and lead Tyson in the next phase of its strategic development and growth. I look forward to supporting Tom and the rest of the management team.”
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Hormel Foods Corp.
AUSTIN, Minn. — Hormel Foods Corp. is a vastly different company from the one James P. Snee joined 27 years ago. In that span of time the company has grown beyond its meat-centric roots into a diversified food company with leading positions in the North American markets for peanut butter, sports nutrition and ethnic foods as well as prepared meats. The next stage of development for the company may include international expansion.
Comments made by Snee Sept. 7, 2016, during the Barclays Global Consumer Staples Conference, Boston, show that may be his focus as CEO.
“ … We acknowledge that our portfolio is primarily a domestic portfolio today, but we believe that our international segments will continue to grow organically through our continued expansion in China, as well as the growth in our iconic brands like Spam and Skippy,” he said. “And we will continue to seek opportunities to expand our global footprint through acquisitions.”
Two additional focuses for Snee and his management team may include growing the number of products perceived as healthy that Hormel offers and broadening its snack-centric product lines.
To clarify how Hormel would expand in the health category, Snee referenced the company’s CytoSport brand Muscle Milk.
“One of our goals is to develop products that draw more female consumers to the category, and that led us to launch Muscle Milk Protein Smoothies made with Greek-style yogurt,” he said.
Within snacking, the company is looking to capitalize on two sub-categories: on-the-go and parties. Within the on-the-go segment Hormel Foods introduced Rev Bites, Skippy PB Bites and Justin’s Snack Packs during 2016.
“Snacking also takes place in households and during impromptu parties,” Snee said. “We’re excited about the innovation that we believe can continue to come in this space. And so, as we think about our performance combined, our pepperoni party trays and Rev product lines have been growing at a rate of 6 percent since 2013.”
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Nestle SA
VEVEY, Switzerland —It was more than 10 years ago that executives of Nestle SA, a company best known for its eponymous indulgent treats, first articulated an ambition to become “the world’s leader in health, nutrition and wellness.” In the years since, the company has spent billions of dollars building its portfolio of businesses focused on health and wellness. The recruitment of Ulf Mark Schneider as the company’s new CEO takes this commitment to a new level.
On Jan. 1, Schneider succeeded Paul Bulcke as CEO. Unlike his predecessor, who spent nearly his entire career at Nestle, Schneider comes to his new position from the health care industry. Most recently, Schneider was CEO of Fresenius Group, a diversified health care group based in Germany with business segments specializing in diabetes care; hospital operations; drugs, clinical nutrition and medical devices; and services for critically chronically ill patients. Fresenius has annual sales of €25 billion. In the first nine months of 2016, Nestle sales over the same period totaled about €90 billion.
“With the proposed appointment of Paul Bulcke as chairman of the board and Ulf Mark Schneider as CEO, the board has increased the company’s capabilities to accelerate Nestle’s journey to become the world’s preeminent player in the nutrition, health and wellness sector,” said Peter Brabeck-Letmathe, Nestle chairman. “Together with our excellent executive team, Nestle is well prepared to face the increasingly difficult external environment and deliver on both its long-term and short-term performance goals.”
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Coca-Cola Co.
ATLANTA — Armed with what outgoing CEO Muhtar Kent called “strategic vision and inspirational leadership,” James Quincey will take the reins of the Coca-Cola Co. on May 1.
What lies ahead for Quincey, though, is no easy task.
A 20-year veteran of the company, Quincey has held a variety of operational roles across the globe, including president of the South Latin Division, president of Mexico and president of the company’s Europe Group. Most recently he has been president and COO since August 2015.
Quincey’s ability to build winning cultures will be key as Coca-Cola looks for new ways to grow amid declining soda sales. The company also faces the challenge of dealing with sugar and soda taxes in cities across the United States.
A priority for Quincey in the coming year will be to find ways to accelerate growth of Coca-Cola’s non-carbonated beverages, which include such brands as Gold Peak Tea, Powerade and Smartwater.
In a September presentation at the Barclays Global Consumer Staples Conference in Boston, Quincey said the company plans to pursue growth through a combination of innovation, bolt-on acquisitions and global expansion of premium brands.
“If we build them steadily — the combination of local, bolt-on, and the global expansions — we can build profitable positions in each of these stills categories and continue the ongoing share gains,” he said.
The sum of the actions, he said, may produce a dramatic result over time.
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Starbucks Corp.
SEATTLE — Shareholders of Starbucks Corp. could hardly be blamed for awaiting an impending leadership transition with some trepidation. On April 3, Kevin Johnson, president and COO, will succeed Howard Schultz as CEO.
One of the fastest growing companies in the United States over the last 30 years, Starbucks experienced a rare bout of weaker performance during a relatively brief span when Schultz was not CEO of the company, a 33-month period ended in January 2008.
Johnson joined Starbucks as an outside director in 2009 and became part of the company’s management in 2015 when he was named COO. His career includes 16 years at Microsoft Corp. and five as CEO of Juniper Networks.
Schultz, who will remain at Starbucks as chairman, said the company’s confidence that Johnson will be successful is solidly grounded, noting that Starbucks has had two of its best years ever since Johnson became COO.
“Let me just say personally Kevin deserves a tremendous amount of credit for those results,” Schultz said. “Along the way, Kevin and I have formed a trusting partnership, and Kevin’s collaborative leadership style has won the loyalty and respect of our people while driving the team to deliver record financial performance. Kevin brings to the CEO role an unparalleled understanding of the market dynamics and strategic choices that have driven Starbucks to become one of the world’s most recognized and respected companies and brands.”
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The Hershey Co.
HERSHEY, Pa. — To understand how the future of The Hershey Co. may look under Michele Buck’s leadership one need only think of one word — snacks. In her most recent role as COO, Buck has started Hershey on a journey outside the candy aisle and into one of the fastest growing categories in food and beverage.
Yet Buck also comes to her new job with a decade of inside knowledge about Hershey’s leadership role in confectionery, and that experience prompted the board of directors of the Hershey Co. to elevate her to the position of the company’s next CEO. After spending several years at Kraft Foods, Buck joined Hershey in 2005 as senior vice-president and global chief marketing officer. This past June she was promoted to executive vice-president and COO. Now, she’ll get her turn as president and CEO of the company beginning in March, succeeding John P. Bilbrey.
During her tenure at Hershey, Buck has spearheaded the development and execution of a number of strategic initiatives, including the company’s move from a supply-driven business model to a demand-driven business model. She also has led Hershey’s expansion into broader snacking categories, overseeing the acquisitions of the Krave jerky and barkThins snacking chocolate brands.
In an Oct. 28, 2016, conference call with analysts, Buck provided what might have been a peek under the hood at her strategy for Hershey going forward, stressing the need for “sticky” innovation, projects that have a longer lifecycle and may cross a variety of platforms.
“Having that sustainable big platform innovation gives us sustaining innovation over a multi-year period of time,” Buck said. “And that’s one of the biggest focuses for us; is making sure that we have sticky innovation so that it doesn’t just launch and come out.”
The company’s March 1 investor day, which coincides with Buck’s ascension to the CEO role, is expected to provide more clarity on how the seasoned Hershey leader intends to shape the future of the company.
