Berg Tackles Diversified Challenges at Supervalu

MARK HAMSTRA

Julie Dexter Berg, a master of the science of marketing, now also needs to be a quick study in the art of retailing.

Minneapolis-based Supervalu named Berg this month to be its new executive vice president and chief marketing officer, after she had worked for the diversified wholesaler and retailer as a consultant for some time. She is one of the latest high-profile executives to enter the world of food retailing from outside the industry, and she's joining one of the most challenged and complex companies in the business.

Julie Dexter Berg

Prior to founding her own consulting firm — Bellevue, Wash.-based Brandmaking — in 2004, Berg was executive vice president and chief marketing officer for Englewood, Colo.-based cable systems concern MediaOne, and before that was executive vice president and general manager for Airtouch wireless, which is now part of Verizon, New York. She also has nine years of experience in CPG marketing and brand management with Carnation Co. and Nestlé Foods, Supervalu said.

At Supervalu, she joins a company that less than a year ago named a new chief executive officer, Craig Herkert, whom she reports to. Herkert has since revamped the management ranks, and has lost several key executives through his own purging and through attrition caused by the upheaval, sources told SN.

“I think some of the challenges she has are inherent to her situation,” said one source, who asked not to be identified. “She doesn't have a retail background, and while some people might say she has been working with retail as a consultant, it's one thing to work with retailers as a consultant, and it's another thing to actually work in retail inside a company with 200,000 employees, where you own that function.

“The success rate of people coming from other industries to work in the supermarket industry is not great,” the source added. “The attrition rate is very high.”

Berg joins Supervalu as Herkert seeks to revamp the way the company is organized to focus on growth opportunities by geographic market, rather than by banner. However, he has also repeatedly stated the importance of retaining the individuality of the banners in each market.

As chief marketing officer, Berg succeeds Steve Michaelson, the former CEO of New York-based FreshDirect, who recently left Supervalu to pursue other opportunities after about 18 months on the job. Michaelson had succeeded another short-tenured executive at the position, Susan Parker, who came to Supervalu in 2007 from Southwest Airlines as Supervalu's first CMO.

Berg is scheduled to begin at Supervalu on March 15.

She could not be reached for comment to SN for this article. On her website, she presents her marketing philosophy in a video, which stresses the power of customer and market analytics as a tool for creating and leveraging strong brands.

“People talk a lot about the market power of brands, but brand is one of the most undermanaged and, frankly, under-delivered parts of company strategy,” she says in the video.

“What if you had better information about your markets and your customers? And what if you had a systematic way to stay out in front of your competitors all the time?

“With superior market knowledge, your opportunity to repeatedly outsmart your competitors goes way up. Plus, this kind of market intelligence keeps you absolutely honest about your own brand. I spent 20 years creating category-defining brands. At Brandmaking, we know it's crucial to see the world truthfully, the way your customers see it.”

While some observers might question her retail experience, sources said she comes recommended by at least one member of Supervalu's board of directors: Charles Lillis, a partner in LoneTree Capital Management.

Lillis was quoted on Berg's Brandmaking website as saying she is “an absolute truth-teller about customers and markets.”

In her new role at Supervalu, Berg will lead all of the company's marketing activities. Her key areas of responsibility will include customer and brand strategy, advertising, and research and analytics.

Observers said she is known as a highly intelligent and savvy marketer, but she will be working with an array of disparate markets and brands, many of which have been under pressure from the economy and from heightened price competition in the market. Supervalu's core Albertsons chain — which itself operates under several different banners, including Jewel, Acme and Shaw's — is just one component of the network of regional retailers that form the bulk of the company.

“It doesn't matter who has that job — it is going to be a significant challenge,” said Gary Preston, a Philadelphia-based partner in executive recruiting firm Preston and Reffett. “It's a company where not everyone buys into the mission.

“In my opinion, Supervalu's strength has always been in the uniqueness of its local brands,” he said. “If they are trying to make Supervalu into another Kroger, they are in big trouble.”

Berg's lack of retail experience is not necessarily a barrier to her success, said Jose Tamez, managing partner in the Denver office of executive search firm Austin-Michael.

As examples of executives from outside the industry who have enjoyed success in food retailing, he cited Brian Cornell, a longtime CPG executive who ran the marketing function at Safeway and now is CEO at Wal-Mart's Sam's Club division, and Linda Severin, another longtime CPG veteran who joined Kroger as vice president of corporate brands in 2007.

“[Severin] was able to form a fundamental, strong, trusting relationship with the people at Kroger that allowed her to be successful, and Brian [Cornell] was able to do the same thing. They are taking advantage of all the talents and skill sets that they bring to the table, and they were able to fit in.”

One of the challenges Berg faces will be to accomplish a similar feat at Supervalu, he explained.

“It takes a lot of great individual personal traits to work well with all the different people in all the divisions,” he said.

In a prepared statement, Supervalu CEO Herkert said Berg would bring a “disciplined customer focus” to the company.

“Julie has a terrific blend of strong experience in both marketing and operations leadership,” he said. “She has developed and implemented brand and customer management strategies for multiple companies that were effective in building customer loyalty and driving sales.”

She joins a cadre of other new hires from outside of the food-retailing industry, including Steve Jungmann, who was scheduled to begin this month as Supervalu's new executive vice president of merchandising. He succeeded Duncan Mac Naughton, who left Supervalu in October to become chief merchandising officer at Wal-Mart Canada. Mac Naughton had been EVP of merchandising and marketing.

Jungmann, 47, most recently was senior vice president of consumer sales and marketing at Solo Cup Co., Highland Park, Ill., and before that was with Spectrum Brands, another CPG company, and had also spent 20 years in a variety of positions at Kraft Foods.

In addition, Supervalu also named Chuck Elias, a veteran of Home Depot and General Electric, group vice president of strategic planning.