BATTLE CREEK, Mich. -- The nomination last week of Carlos Gutierrez, chairman and chief executive officer of Kellogg Co. here, as secretary of commerce could have positive implications for the food industry, trade executives told SN last week.
Industry leaders interviewed by SN praised Gutierrez for his keen insight into all aspects of food distribution and his awareness of issues that could indirectly impact the food business through changes in policy, from international trade and exports to changes in taxes.
Gutierrez, 51, has been chairman and CEO of Kellogg since 2000. SN named him one of the industry's Power 50 last July.
Under Gutierrez's leadership, Kellogg was able to reduce debt, and narrow its primary focus to cereal and wholesome snacks. Since 1999, when he was named CEO, Kellogg's sales have risen 43%, to $8.8 billion; earnings per share are up 131%, to $1.92; and cash flow has increased 82%, to $961 million.
Another case of a food industry executive to serve in a cabinet position was Robert O. Aders, former chairman of Kroger, Cincinnati, who served as undersecretary of labor and then acting secretary of labor in 1975 to 1976 under President Ford before becoming the first chairman of Food Marketing Institute. John Block, secretary of agriculture under President Reagan from 1981 to 1986, joined the food industry after his government stint to become chairman of Food Distributors International, now a division of FMI.
According to the Commerce Department Web site, the secretary is the voice of business in government, with responsibilities for promoting U.S. business at home and abroad, enforcing international trade laws, developing telecommunications and technology policy, gathering economic and demographic data, issuing patents and trademarks, and managing marine fisheries and sanctuaries.
If he is confirmed, Gutierrez would be the nation's 35th secretary of commerce, succeeding Donald L. Evans.
Jeff Noddle, chairman, president and CEO of Supervalu, Minneapolis, told SN Gutierrez's appointment could be a positive for the food industry "because when he deals with issues that affect us indirectly, such as international trade or proposed changes to the income tax system, I would hope his experience will be helpful to us."
Noddle also said he believe Gutierrez is the kind of manager the government needs. "I've always found him to be very down to earth, very approachable, very selfless and not ego-driven. The government can benefit from that kind of person," he pointed out.
Tom Zaucha, president and CEO of the National Grocers Association, Arlington, Va., said having someone from the food industry in government will eliminate some of the industry's need to educate administrators who enter government from the private sector. "Gutierrez comes to the job with an understanding and knowledge about the grocery industry, so part of that learning curve is already there," he told SN. "He already has the knowledge, information and experience in all segments of the industry, and that should be a positive."
Zaucha said he has been impressed with Gutierrez's ability to motivate people. "At NGA, we have a lot of contact with executives at the trade development level, and to a person, there's an enthusiasm at Kellogg that we haven't seen there for 10 years. That's where a leader like Gutierrez can make a big difference -- not just in his strategic vision, but in his ability to inculcate that into his management team."
During his 29 years with Kellogg, Gutierrez has overseen operations in Mexico, Canada and the Asia-Pacific -- experience that could be helpful in conducting business at the Commerce Department, observers said.
"What Carlos will bring to the job is extraordinary experience and knowledge of the global marketplace," C. Manley Molpus, president and CEO of Grocery Manufacturers of America, told SN. "The years he spent working and travelling around the world have given him real-world knowledge that will be invaluable in his grasp of issues of economic growth and his role assisting the U.S. in international trade and promoting exports. His experience starting at the bottom and working his way up give him unique preparation for dealing with workplace and productivity issues.
Tim Hammonds, president and CEO of Food Marketing Institute, said he believes Gutierrez is an excellent choice to oversee the Commerce Department. "The essential strengths a commerce secretary must possess are the ability to articulate a strong and convincing case for open markets and free trade, and to act as a point person for the president's economic policies when required. Carlos has the strength and credibility to excel in each of these areas.
"We are very pleased to see someone in government who understands the food industry. We are even more pleased to see someone in government who brings the right skills to the right job at the right time."
James M. Jenness, who will become the company's new chairman and CEO once Gutierrez is confirmed and sworn in at the commerce post, called Gutierrez "an amazingly passionate man who's committed to the betterment of what he believes in. That integrity has created a great deal of loyalty among Kellogg personnel.
"People admire Carlos. They see him as someone who turned this company around, and he's made everybody associated with the company proud to be a part of it."
Jenness acknowledged the role Gutierrez played in turning Kellogg's fortunes around over the past few years. "He took a very courageous stand in 2000, at a time the company was struggling, to change the mind-set here from the notion of establishing growth goals that we couldn't deliver on to making sure we could deliver on what we promised on a sustainable basis," he told SN.
According to Jenness, Gutierrez also established a "volume to value" approach in which the company began valuing dollar share and dollar performance as a measure of success rather than pounds and volume. He also put in place a clearer accountability structure for business units.
In an interview last summer, Gutierrez told SN he was interested in making sure Kellogg aligns itself with what is happening with society. "More and more, we're getting the company aligned -- not just on business strategy, but on cultural values," he said. "[That's why] we've been able to achieve really difficult goals -- great sales goals and earnings goals -- at a time when we had so many headwinds coming against us."
Gutierrez said in a Forbes interview he believes in keeping in touch with consumers by visiting supermarkets on weekends to check on Kellogg's displays and talk with shoppers. "In our corporate offices, we talk about reports ... we read reports, we push them around. ... But how many discussions do we have about what's happening in the stores, what are our customers saying, what are they thinking, what's their point of view? That's what's important."
In nominating him as commerce secretary, President Bush called Gutierrez "a visionary executive" and "one of America's most-respected business leaders."
Gutierrez was born in Cuba, where his parents owned a pineapple export business in Havana. He was six when the family moved to Miami after the business was confiscated by the Castro regime.
Gutierrez learned English from a bellhop at a Miami hotel, Bush pointed out, "[and] he will be an inspiration to millions of American men and women."
