Featuring Walter Rach, Managing Director, Food & Beverage
Special Series: Part 3 of 3
No doubt many were glad to see 2009 in the rearview mirror. As we approach the midpoint of 2010, some business leaders may wish for a crystal ball to see what the rest of the year and 2011 holds in store. For now, the forecast of experts are as close as anyone will come to a glimpse of the future. Cook Associates recently asked three specialists to reveal their predictions and offer guidance for 2010 and 2011. One resounding theme is that the customer is king.
Walter Rach, Cook Associates, Inc.
2010 will be a year of cautious optimism for the Food and Beverage Industry as the overall U.S. economy, while still facing challenges, shows signs of improvement. Executives can expect to see some strategic growth opportunities opening up, but they need to be prepared to meet with stiff competition from strong companies that identify the same trends. Survival of the fittest will continue and hiring will need to be done on a very focused and strategic basis. Executives would be wise to pay equal attention to company cultural fit, as well as skill set fit with new executive hires. As economic conditions improve, a greater likelihood of merger and acquisition activity will increase in the food and beverage industry. This has been a relatively quiet area over the last couple of years but will offer additional ways to achieve growth in 2010.
Sean McGirr, CEO of Cliffstar (retired)
The most important trends that I see are developing in private labels. Companies should make a move to strongly market multiple tiers of store brands within the same product category - a good, better, best - approach that covers the generic, national brand equivalent, and premium segments. This allows the retailer to present innovative new products, versus being a ‘me too' alternative or ‘every day low price' option. With suppliers and retailers now competing on a more balanced playing field with the national brands, the other trend to watch is increased attention to executing strong marketing campaigns, similar to those of national brands. The industry is attracting strong consumer package goods talent to its mission and is raising the standard of performance. These factors will strengthen the private label industry in general and well into the future.
Tomas Maruri, Operations & Supply Chain Consultant
An important emerging trend for food manufacturers is the advent of the Global Food Safety Initiative (GFSI). The initiative started in 2000, but only in the last eighteen months has it been widely understood and put into practice. Food manufacturers are being told by their customers to get certified. The progressive, forward-looking manufacturers are already deeply involved in gaining certifications from the accrediting bodies. The wise food manufacturers will not wait to be told. They are already in front of this trend and many major food manufacturers have heeded their customer's demands to conform. In 2010, we will see proclamations of compliance, with more and more labels bearing reference to certification as a global food safety certified supplier. Those that reach this goal early will enjoy - if correctly marketed and publicized - a brief significant increase in consumer awareness, product loyalty, and incremental sales.
RISING SENSE OF OPTIMISM
Walter Rach, Managing Director of the Food and Beverage Search Practice for Cook Associates, agrees with the positive forecast for the food and beverage industry. Amongst executives Rach has recently contacted, he says there is a noticeable sense of optimism, "Like many industries, food and beverage has moved cautiously through these difficult economic times. Many companies have cut their management teams to the bone, so to speak. Food and beverage executives that I have spoken with see a light at the end of the tunnel and predict that strategic growth opportunities will increase."
However, Rach cautions that organizations will need the right people in place to lead this growth, and many companies will need to seek external candidates. As companies have made the move towards minimized teams, internal resources may have become too lean, or those in the talent pipeline may lack the proper skill sets to maximize new growth opportunities.
When examining 2010-11 opportunities, one must also remember that consumers are critical to recovery and future growth in the industry. In this case, it seems the optimism of those in the industry is supported by data. In the same KPMG survey referenced earlier, senior executive respondents were asked to identify the triggers they think will spur a U.S. economic recovery. The top three factors, at nearly identical mid-forty percentage rates, were increased consumer spending, an increase in employment, and improved consumer confidence. If the sense of optimism can be sustained, the industry is well-poised to take advantage of an economic recovery, and perhaps rebound ahead of the rest of the U.S. economy.
Walter Rach directs the Food & Beverage sector within the Executive Search division of Cook Associates, Inc. Since joining the firm in 1983, he has specialized in driving search strategy programs and complete search project management and execution for Food Processing clients. Walter has built a strong following in the Food Industry and has successfully conducted search assignments for senior level executives for Fortune 500 companies as well as publicly and privately held firms of small to medium size.
As a Managing Director, Walter conducts executive search assignments at the CEO, COO and divisional President level, as well as functional heads of Sales, Marketing, Operations, Supply Chain, Finance, Technical Services and Human Resources for the all Food & Beverage industry segments.
A native of Chicago, he received his MBA from the University of Wisconsin - Madison and his BS, Business Administration from the University of Illinois - Champaign/Urbana.