27. JOHN RICE, President and CEO, Unilever Bestfoods, North America and Unilever United States
Key development: Carb Options quick-to-shelf speed put Unilever ahead of the pack in the race to meet consumer demands for convenient low-carb options.
What's next: Continued integration of products and marketing to meet consumer demand.
John Rice's Unilever Bestfoods North America and Unilever United States, Englewood Cliffs, N.J., are poised to drive top-line growth through innovation, integrated marketing and speed-to-shelf.
"We're moving from a strategy called "path to growth" to a strategy oriented around vitality," Rice said. "For us, adding vitality to life means meeting the everyday needs for hygiene, nutrition and personal care with our unique portfolio of brands. The breadth of our portfolio, in my opinion, is one of our competitive advantages."
"Rice has really built a stellar organization around him, from the marketing and COO to the sales team to the logistics team. He's put a total organization in place that can recreate a new Unilever Bestfoods," said Don Stuart, partner, Cannondale Associates, Wilton, Conn.
Rice was appointed president and chief executive officer of Unilever United States in May, adding to his previous duties and title. Prior to this year's promotion, Rice was president and CEO of Unilever Bestfoods North America. In his new role, he took on additional management and operational responsibilities for the organization in other arenas, such as human resources, consumer services, finance and corporate development, among others.
Rice has worked within the food and personal care divisions of Unilever for 23 years. He served as business group president for Unilever Bestfoods Latin America, was president and CEO of Unilever's Lipton USA, and was chief operating officer of Lever Brothers Co. and a board director of Birds Eye Wall's Ltd. in the United Kingdom.
The company's marketing prowess was exemplified by its Carb Options low-carb line that hit grocery shelves before competitors' early this year.
"Unilever Best Foods was the first manufacturer to really stake a claim in the carb segment, and they did it in an innovative way. They had their own brand with Carb Options, but it was also dual-branded and leveraged the power of Skippy and all their other great franchises," Stuart said.
Rice cited the introduction of Carb Options; the extension of Unilever's ice cream businesses with healthy options; and a focus on heart health with its Promise spread as examples of the new company mission focused on helping people feel good, look good, and get more out of life.
The new Carb Options line uses the power of a family or parent brand, such as Skippy, to leverage customer loyalty to drive trial of new low-carb products, Stuart said. Familiar brands were linked with the new low-carb idea with labels reading Carb Options Garden Style Sauce by Ragu and Carb Options Lemon-Flavored Ice Tea by Lipton, for example. "That was a good way to not only develop a brand uniquely positioned against the carbohydrate opportunity, but also to leverage the heritage of the great brands that Unilever Bestfoods has," said Stuart.
The new Carb Options line joined a stable of well-known consumer goods that includes Ragu, Lipton, Wish-Bone, Skippy and Slim-Fast. The line rolled out nationally this past January.
The Carb Options rollout was indicative of another key Unilever strength in the marketing integration that supported the launch. Unilever Bestfoods North America established an entire department dedicated to integrated marketing in 2003. The full weight of that division was put behind the Carb Options line through multiple marketing tools that included television advertising, online ads, print media, customized retailer programs and other outlets to draw consumer attention to the launch.
LIZA CASABONA
28. ROGER DEROMEDI, CEO, Kraft Foods
Key developments: Rolling out new health and wellness and convenience items; increasing global presence.
What's next: Accelerating a shift in its portfolio to align with changes in consumer and customer trends.
It didn't take long for Roger Deromedi to shake things up after a corporate tremor left him the sole chief executive of Kraft, Northfield, Ill. After a two-year power-sharing agreement, Deromedi received the Kraft board's vote over co-CEO Betsy Holden -- ending a structure in place since 2001. Holden, who is now Kraft's president of global marketing and category development, was on SN's 2003 Power 50 list.
Within two months, Deromedi made his first efforts to transform Kraft's portfolio to meet consumers' increasing needs for health and wellness and convenience products.
While Deromedi is proud of Kraft's role in the food industry in a number of areas -- including brand building, food safety and innovation -- he's most impressed with the company's response to issues like obesity.
"We're implementing a wide-ranging health and wellness program to improve the nutrition profile of our portfolio, adjust our marketing practices and policies, provide consumers with more information to help them make informed food and activity choices, and support constructive public policy changes," he said.
While Deromedi was quick to outline his plans, his rise up Kraft's corporate ladder had a setback in March. Just three months after being named CEO, he was hospitalized for a viral infection accompanied by acute dehydration. He remained out of office for about a month and a half.
Upon Deromedi's return on May 10, he wasted no time reaffirming the company's commitment to health and wellness. In a progress report, Kraft detailed the new products designed to meet consumer needs. These include Nabisco 100-calorie packs: portion-control, single-serve products that have 3 grams or less of fat, 0 grams of trans fat, and no cholesterol; Triscuit crackers with 0 grams of trans fat; and the Kraft CarbWell line of salad dressings, barbecue sauce and other products.
Likewise, Kraft has reduced the fat content in, and made other changes to, about 200 products in North America. These products account for about 5% of Kraft's annual North American product volume.
Along the same lines, Kraft is providing additional nutrition information on snack and beverage packages that contain up to four servings. It also plans to provide labels that communicate nutrition content on a per-serving basis and for the entire package so consumers don't have to "do the math" themselves.
CAROL ANGRISANI
29. STEVEN REINEMUND
Key developments: Removed trans fat from all Frito-Lay products; introduced Pepsi Edge and Tropicana Light 'n Healthy lines.
What's next: Having better-for-you products account for 50% of new product revenue over a three-year period.
When it comes to marketing, PepsiCo's Steven Reinemund clearly has an "edge." Proving that a manufacturer known largely for salty snacks and carbonated soft drinks can survive, thrive and even offer solutions in a health-oriented, low-carb marketplace, the $27 billion company just launched its Pepsi Edge soft drink and the Edge line of salty snacks. Pepsi Edge has half the sugar, carbs and calories of regular colas, while Edge snacks have a total of 6 net carbohydrates, 10 grams of protein, and 3 grams of fiber. Both introductions follow other recent efforts aimed at enhancing the healthy profile of PepsiCo brands. Last year, PepsiCo's Plano, Texas-based Frito-Lay division became the first food company to eliminate trans fat from its snack products. Tropicana orange juice now comes in a "Light 'n Healthy" version with half the sugar and calories.
"We've taken significant action to improve the healthfulness of our existing products, and added many new products that contribute to healthier lifestyles," said Reinemund.
Better-for-your products already make up about 40% -- or more than 100 -- of PepsiCo's North American food products. That number still doesn't satisfy Reinemund, who wants at least half of the company's new product revenues to come from good-for-you and better-for-you products.
Reinemund, PepsiCo's chairman and CEO since 2001, said his goal is to respond to changing consumer demands with new products, packaging, marketing and program funding. Just last month, there was the name change of Frito-Lay's Wow! reduced-calorie salty snack line that is now part of the "light" line of Lay's, Ruffles, Doritos and Tostitos. PepsiCo also added about 17,000 new vending machines in schools with juices, Aquafina water and Gatorade.
"We're committed to helping consumers with choices that allow them to consume fewer calories, and burn more of them," Reinemund said.
Still, there are hurdles to overcome. Among them, the Securities and Exchange Commission has notified the Pepsi-Cola and Frito-Lay divisions that it will recommend bringing a civil action against the units, alleging non-executive employees helped struggling Kmart Holding Corp. improperly record the timing of revenue in early 2001.
CAROL ANGRISANI
30. JOHN TYSON, Chairman and CEO, Tyson Foods
Key development: Progress in developing new products.
What's next: Continuing to expand product mix.
John Tyson found himself and his namesake company in the midst of some meaty issues this past year. Through it all, Tyson Foods just kept growing.
Tyson ships about $3 billion worth of meat to 80 countries, so it felt the impact of having doors shut around the world in response to the country's first reported case of mad cow disease and an outbreak of avian flu. Beef represented 49% of the Tyson company's $24.5 billion in 2003 sales. At the same time, bans on poultry were imposed in many countries after outbreaks of avian influenza were reported in the United States. Tyson Foods got 30% of 2003 sales from the chicken segment.
In spite of export restrictions the company posted a 65% increase in second-quarter profit. For the six months ending March 27, Tyson Foods reported a 59% increase in profit compared to the same six-month period the previous year.
"When the beef scares hit, they executed well in a difficult environment," said John McMillin, analyst, Prudential Securities, New York. "How many food companies are walking up the ladder? They're doing a fantastic job."
Tyson also continued to make headlines in other ways. The company prevailed in court when a federal judge reversed a jury verdict in a long-running cattle pricing lawsuit against Tyson Fresh Meats. In March, the company announced the Securities and Exchange Commission had begun to investigate perks given by the company to some of its senior executives, including Tyson and his father, Don, the company's former chairman. The company and an SEC spokesman declined to comment further on the investigation.
As CEO, John Tyson has said his vision is to make the company the "world's premier protein supplier." He wants to establish operations overseas. The company will continue to expand its product selection. More value-added products, which can be more profitable than primal meats, will be introduced, Tyson and Dick Bond, the company's chief operating officer, told shareholders early this year.
"They're improving the product mix and margins," McMillin said, adding that Tyson and Bond make a good team, and deserve credit for the company's performance.
"John's the boss and deserves the ultimate credit, even though the day-to-day work is being done by Dick Bond," McMillin said.
Tyson, who became chairman in 1998 and CEO in 2000, said he favors making his company's board more diverse and less controlled by insiders. The recent election of Albert Zapanta resulted in a 10-member board with five members being considered "independent."
LYNNE MILLER
31. E. NEVILLE ISDELL, Chairman and CEO, Coca-Cola
Key development: Restoring hope at the top-selling U.S. soft-drink maker.
What's next: Catching up in the non-carbonated drink market.
A few weeks after E. Neville Isdell took the top spot at Coke, people started to come to work with a smile again.
That's no small matter for the beleaguered soft-drink giant. The Coca-Cola Co. in Atlanta has been dogged by a languishing stock price, ongoing federal investigations of its business practices, and a slow start in the non-carbonated soft-drink race. Isdell's predecessor, Doug Daft, left before his expected retirement date, ending a short tenure marked by layoffs and a management exodus.
Isdell understands the Coke culture and represents consistent leadership, said Tom Pirko, president of Bevmark, a Santa Barbara, Calif.-based consulting firm that has advised the soft-drink leader, "and that's good for Coke right now."
It's not just Isdell's affable personality that's restoring hope. The 61-year-old Irish citizen spent 35 years at Coke, leading operations overseas, and working with retailers and bottlers. "Neville has worked on five continents," said Don Keough, the retired president and director and influential Coke adviser who rejoined the board in February. "He's got a global view of the business. I think he's the right person at the right time for Coke."
Isdell has moved quickly on symbolic and substantive fronts, chatting up employees in the company cafeteria and visiting India, where Coke has faced pollution and flawed product allegations.
He's named new executives for marketing, human resources and bottling investments. He dismissed President and COO Stephen Heyer, who was credited for improving Coke's marketing, but was considered tough to work for.
Isdell will have to figure out not only how to grow the core product, which is hampered by a mature and increasingly health-conscious U.S. market, but seize opportunities in the faster-growing non-carbonated world, where PepsiCo has had a head start.
Observers will be gauging reaction to Coke's new, light Minute Maid orange juice and C2, its reduced-sugar version of its flagship cola.
Coke also must continue to adjust to the explosion of beverage choices and diminished brand loyalty. Soda makers can no longer "just throw a slogan out there," said Greg Prince, a New York-based beverage consultant.
Chuck Fruit, Coke's new chief marketer, understands that. Coke must strengthen its brands' relationship with consumers through their interests and vary its messages depending on the target, he told SN. "There's more competition for consumers' attention. I think the consumer is more sophisticated today."
LUCIA MOSES
32. AUGUST A. BUSCH IV, President, Anheuser-Busch Inc.
Key development: Led introduction of Michelob Ultra, the best-selling low-carb beer.
What's next: Reaching out to consumers through efforts like sampling "day-fresh" beer.
Long before "low carb" became the industry buzzword, Anheuser-Busch rolled out Michelob Ultra, a light lager with 2.6 grams of carbohydrates per serving.
At first, industry observers were skeptical.
"People thought they were potentially out of their minds," said Don Stuart, partner, Cannondale Associates, Wilton, Conn., a marketing and sales management consulting firm.
Yet St. Louis-based Anheuser-Busch soon proved them wrong. It is now reveling in the low-carb craze that has taken the food industry by storm. Since its 2002 introduction, Michelob Ultra has become the company's most successful new product since Bud Light.
"We are proud to say that because of our focus on innovation, we anticipated the [low-carb] trend, and were the first in the alcohol beverage industry poised to capitalize on it," said August A. Busch IV, named company president in 2002.
New products like Michelob Ultra have distinguished the company in the marketplace, so much so that Anheuser-Busch is the world's largest brewer and maintains a 50% share of the U.S. market.
Busch, who started his career at Anheuser-Busch in 1985 as an intern in the company's corporate yeast culture department, today leads the largest division of the $14 billion Anheuser-Busch Cos. As head of domestic beer operations, he is responsible for all U.S. marketing, production and quality, as well as the division's financial performance.
He led the company to record volume and profit in 2003, helping drive Anheuser-Busch's earnings per share up 12.7%, and will continue to meet the needs of low-carb and other consumers.
This approach is needed at a time when Miller Brewing, Milwaukee, has grown more dominant globally since becoming a subsidiary of SABMiller plc, the world's second-largest brewer, in 2002.
"SABMiller has deep global pockets," said Stuart.
Busch's plan is to set the company apart via product development like Michelob Ultra, and by promoting the quality and freshness of Anheuser-Busch beverages. The company is launching a major sampling initiative that will allow more than 3 million consumers to sample "day-fresh" beer so they can experience why fresh beer tastes better.
The company is also committed to a "seamless selling" relationship between the brewer and its wholesalers. This partnership benefits retail customers through reduced out-of-stocks, improved forecasts and order-taking, and more professional and effective account planning and service, said Busch.
CAROL ANGRISANI
33. STEPHEN W. SANGER, Chairman and CEO, General Mills
Key development: Led growth through new product introductions, extensions.
What's next: Reviving core brands.
The low-carb craze, rising commodity prices and a temporary slowdown of new products to fill consumers' cupboards have slowed momentum at Minneapolis-based General Mills. But Chief Executive Officer Stephen W. Sanger said that's changing.
Sanger, a 30-year veteran of a company well known for driving innovation, is promising a new crop of products that will tap into consumers' desires for convenience and wellness benefits. Sanger said that while low-carb dieting may still tamp down sales in its Pillsbury bakery products, portion and sugar control will have a big influence on consumers' dining habits in the months ahead.
"We certainly weren't active enough in the first half of last year," Sanger said during a June 30 conference call to review fiscal year 2004. But, he continued, he feels "very good about the innovation we have coming this year."
The investment community, after expressing concern that the maker of Cheerios and Betty Crocker baking mixes had set unrealistically high sales growth and capital spending targets, seems to feel better, too. Sales of snack bars, Progresso soups and Yoplait yogurt have helped offset weakness in cereal and carb-vulnerable Pillsbury refrigerated dough. Upcoming products with convenience and portion-control benefits hold promise, and plans to cut 20% of the company's stockkeeping units will improve sales efficiency, food analyst David C. Nelson of Credit Suisse First Boston wrote in a July 1 report.
But General Mills still faces pressure on its bakery and cereal fronts.
"There's definitely a lot of headwind on the low-carb, which they've been slow to respond to," said Michael Sadoff, co-owner of Sadoff Investment Management of Milwaukee, which owns about 230,000 shares of General Mills. "It doesn't seem like it's going to go away, at least not this year."
Sanger also will be challenged to serve up new ways to grow its all-important cereal business, which was one of the company's weakest units, growing volume 2% in the past fiscal year.
"At 20% of the company's sales [and substantially more in profit], the cereal category is still the key to this company's success," Nelson reported, "and Kellogg has been out-innovating [General Mills] recently."
And while General Mills has won praise for aggressively growing its organics business, some said it could do more in functional foods, a category projected to grow retail sales by 39% in 2006 from $1.3 billion in 2001. General Mills has focused mostly on extending its existing brands, rather than creating new functional foods, said Peter Leighton, a principal of Lafayette, Calif.-based Copernican Associates, which consults to pharmaceuticals, packaged goods and nutrition companies.
LUCIA MOSES
34. JAMES KILTS, President and CEO, Gillette
Key developments: A razor-sharp executive who reinvigorated Gillette with a revamped product pipeline and innovative marketing focus.
What's next: Continued growth and innovation.
The blade and razor industry is a cut-throat business. Yet by focusing on product and marketing innovation, James Kilts has kept Gillette at the forefront of the industry.
Kilts fine-tuned the company's new product pipeline and established a noteworthy lifestyle and experiential marketing platform to breathe new excitement into a business that had stalled.
"Kilts inherited an organization a few years ago that had perhaps grown a little complacent. They had healthy margins, but growth was stagnant. He came in and streamlined the organization and brought a new breadth of innovation to bear," said Don Stuart, partner, Cannondale Associates, Wilton, Conn.
Analyst Andrew Shore of Deutsche Bank Securities, New York, likened the pre-Kilts Gillette to "a New England country club." Now, however, "people are accountable in an organization where they weren't accountable before. Jim Kilts is a tremendously disciplined, thoughtful, analytical, no-nonsense CEO. He cares about results."
Giving an example of his discipline that should encourage supermarket retailers, Shore reported that Kilts said no to Wal-Mart when the giant retailer asked to be sold the M3Power razor earlier than other retailers. Wal-Mart ended up with the product on its shelves before others anyway, Shore noted, but that was because of its efficient supply chain, not because Gillette gave it preferential treatment.
Highly regarded throughout the industry as an effective consumer products executive, Kilts' performance at Gillette garnered him a lot of high-profile attention earlier this year as a potential successor to the top position at Coca-Cola. Industry observers said it is Kilts' ability to focus on product innovation and marketing while keeping costs down that has put him in the spotlight, despite running a company that barely falls within the top 50 consumer goods companies in terms of size.
"Kilts is a big-picture guy who has an intense focus on costs, while at the same time looking to grow the top line through new product introductions, which is the perfect executive that you need in the consumer products industry," said Joe Altobello, analyst, CIBC World Markets, New York.
Since Kilts assumed leadership of Gillette in January 2001, the company has introduced a number of new brands, most notably M3Power. Gillette's introductions of the M3Power vibrating razor, and the Mach3Turbo before that, have kept the company at the top observers said.
In addition to continued product innovation, Gillette has put some marketing muscle behind all its brands recently.
"Something new and very important and creative that Gillette has embarked on is lifestyle/experiential product promotion," said Diane Garber, president, In Sight Communications, Buffalo Grove, Ill.
Kilts is the current chairman of the Grocery Manufacturers of America, Washington. Prior to joining Gillette he held positions with Nabisco, Philip Morris, Kraft, and Oscar Mayer.
LIZA CASABONA
35. CARLOS GUTIERREZ, Chairman and CEO, Kellogg Co.
Key developments: Growing stock price against rising commodity costs.
What's next: Continued emphasis on improving corporate culture while developing products for baby boomers.
Carlos Gutierrez has certainly earned his stripes, particularly over the past year. In a period fraught with increasing commodities costs, difficult trading environments, aggressive competitors and low-carb mania, the home of Tony the Tiger saw its stock price rise about 14% on average, higher than the food group and the S&P 500.
Launching low-carb and low-sugar cereals, adding flavors to its best-selling Special K cereal line like red berries with real fruit, and embarking on a massive Spider-Man licensing promotion in 40 countries no doubt are some of the highlights at Kellogg over the past year. Yet Gutierrez attributed the company's success as much to its corporate culture as to its business acumen.
"More and more, we're getting the company aligned -- not just on business strategy, but on cultural values," Gutierrez told SN. "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. That's why I'm so proud of the 24,000 people who work here."
Kellogg had to balance higher commodity costs and distribution expenses, not to mention higher employee benefit costs, against absorbing a lot of restructuring charges, according to Christine McCracken, food analyst at FTN Midwest Research, Los Angeles. Raising prices was necessary, but it didn't hurt the business, she said.
"They have initiated a number of efficiency programs, but rather than take a charge, they actually did absorb that as a regular part of doing business. That's much different than some of their peers. It speaks to the quality of the company," McCracken said. "They have hit on everything that they are supposed to do, and they are doing it right. There's no politics with Carlos. He says what he means, and he doesn't try to play games. He's just a very genuine person. The quality of the people that work with him is a reflection of that."
Next up, Gutierrez said he plans to focus on the "real mega trend" of the aging consumer population by developing some brands targeted at the baby boomer generation.
"That's something that is going to impact us all. We know that the older the consumer gets, the more cereal they consume," he said. "So that's a trend that should benefit us. I see continued growth, continued results, prosperity and, hopefully, a workforce that feels great about being here."
STEPHANIE FAGNANI
36. WILLIAM WRIGLEY JR., Chairman, president and CEO, Wm. Wrigley Jr. Co.
Key development: Achieved milestone $3 billion in sales in 2003.
What's next: Continued expansion into additional confectionary arenas and international markets.
William Wrigley Jr. has set his sights on taking his company beyond chewing gum and turning it into a global confectionary powerhouse. He's not going to let anybody burst his bubble either.
Wm. Wrigley Jr. Co. made significant strides in this direction recently when it closed on its acquisition of Joyco Group of Barcelona, Spain, in April. The move will expand the company's reach into categories like lollipops and hard candies, and into geographic markets that include Spain, India and China.
"While there are no guarantees, the quality and thoroughness of our analysis and due diligence before the deal and of our integration and transplant activities currently under way [have] me excited about the long-term possibilities," Wrigley told SN.
Also in the past year, the company has given a lift to some of its core gum brands through flavor innovation, introducing new versions of its fast-growing Orbit brand, as well as its stalwart Juicy Fruit label. In addition, the rollout of Eclipse breath mints last year marked the company's entry into that category. It achieved all this while witnessing a record $3 billion in annual sales in 2003.
"Top-line and bottom-line sales growth, profit growth, continues at double-digit rates [that are] miraculous in this category, which is just growing a couple percent a year," said Don Stuart, a partner in the sales and marketing consulting firm Cannondale Associates, Wilton, Conn. "They continue with what I would call a pristine balance sheet -- no debt. It's hard to top that."
Topping that is exactly what Wrigley is planning to do.
Future plans call for more of the same in the way of product development and distribution expansion, as well as the implementation of a unified, global technology solution for the company's financial, purchasing and production data systems. A "stepped up" marketplace and monitoring approach and a newly realigned executive team were among the initial steps Wrigley took to ensure his company meets these future benchmarks. "One challenge always on my mind is how to stay 'nimble' as an organization -- how can we 'stay small' in important ways, even as we grow much larger," Wrigley said. "You must stay close to your consumers, your customers and your competitors. You have to also effectively scan the environment to stay ahead of, or at least on top of, the latest concern or craze or desire in the marketplace."
