USC Industry Training Program Celebrates 50 Years

ELLIOT ZWIEBACH

For the past 50 years, employees of supermarket chains around the nation and the world have been able to boost their knowledge — and their job prospects — by attending the Food Industry Management program at the University of Southern California in Los Angeles.

“I still use the tools and techniques I learned there,” Mike Proulx, president and chief operating officer of Bashas', Chandler, Ariz., who graduated from the program in 1996, told SN.

The Western Association of Food Chains, which sponsors the program, recently acknowledged it at the WAFC annual convention for its first half-century of providing advanced education to food industry executives.

WAFC members first decided at their 1956 convention to look into establishing a supermarket program at a university in the West. A food distribution curriculum had already been set up at Michigan State University in 1950, but operators in the West were concerned about the expense and distance involved in sending employees to the Midwest.

After contacting 17 universities and finding interest from a handful, the association chose USC over the University of Arizona to host the program because of its location in a metropolitan area, the reputation of its business school and the high degree of interest in the program among Southern California retailers.

According to the program's website, the FIM curriculum is designed exclusively for high-potential employees from food retailing, wholesaling and manufacturing companies with positions in operations, sales, marketing, warehousing, distribution and processing.

“What we want are seasoned managers who have already accomplished a lot in their companies and whose companies see potential for these students to move up several levels,” said Tom Arnold, the current director of the USC program.

Students are selected by their employers. Their tuition is paid by the WAFC out of funds donated by 50 vendor companies and, in recent years, by several individuals as well. Books, transportation and other costs are paid, in most cases, by the students' employers.

When the program began classes in the fall of 1959, WAFC companies set aside a total of $12,000 to pay for 37 scholarships.

Carole Christianson, executive director of WAFC, said tuition costs vary from year to year, with the cost of scholarships this year at $17,606 per student. She expects it to exceed $18,000 next year.

The original director of the Food Industry Management program was Merle McGinnis, a veteran executive of Safeway and a former teacher, who had been instrumental, through his interest in higher education, in establishing programs at Michigan State in 1950 and Cornell University in 1958.

While the programs at those two schools were focused on agriculture, McGinnis felt that the USC program should focus on food distribution in the retail industry.

When McGinnis retired in 1971, he was succeeded by Jim Stevenson — a former professor of agriculture at Purdue University and an economics professor at Washington University in St. Louis who was working in Mexico City to create synergies in food and agriculture among businesses and universities in Latin America.

Stevenson told SN he had three goals when he joined the program: To move the program closer to the food industry; to increase the number of faculty members; and to upgrade the level of students, including broadening the program to include more international participants and more students from outside California.

He accomplished all three.

When Stevenson retired as director in 1998, he was succeeded by Arnold — by trade an electrical engineer and a lawyer with a strong interest in business — who spent several years working with the USC program in the early 1980s as an instructor in computers. He was also a key figure in designing and implementing the computer simulation of the food industry that serves as the basis for the entire course of study in the FIM program.

The Food Industry Management program was originally a series of courses spread over a year's time, during which students worked part time at their regular jobs; in 1996, it was consolidated into a one-semester, 14-week curriculum to accommodate employers who didn't want to lose their executives for a full year.

An offshoot of FIM is the Food Industry Executive program, a four-day spring seminar designed for senior managers; costs for that program are paid by the companies or by the individuals who attend.

Since 2000, the WAFC has also sponsored a retail management certificate program — a 10-course curriculum offered by community colleges in the 14 Western states that give potential industry workers the opportunity to take foundation courses.

According to the association, “Traditionally the retail industry has relied on internal, on-the-job training programs to prepare employees for positions within their organizations.

“Such teaching is still effective and appropriate for most entry-level positions where the focus is basic skills but is no longer efficient or sensible as a means to fill the ever-increasing, more complex skills needed by managers and supervisors in the retail industry.”

Approximately 1,600 industry professionals have gone through the FIM program in its 50 years, according to the WAFC.

In interviews with SN, several graduates from different eras offered memories of their university experience.

Sue Klug, president of the Southern California division of Albertsons, a division of Supervalu, Minneapolis, who graduated from the program in 1984, said she believes higher education “makes the industry a lot more powerful and more attractive to younger folks today.”

It also opens doors for women to move into higher positions of responsibility, she pointed out, “because, after all, women are our target customers in this business.”

Klug said the ultimate legacy of the program “is a focus on getting smart, young, educated people into the pipeline to add value.”

Bill Roulette, a retired Gelson's Market executive and a graduate of the first USC class in 1960, said the program “opened my eyes to the whole food distribution network. It was also an opportunity for sharing ideas with different people and seeing how each company approached [the same] issues.”

Al Marasca, retired president and chief executive officer of Ralphs Grocery Co. and a 1964 graduate, said the most important benefit for him was “the competitive advantage it gave me, because when you completed the program, people looked at you differently when opportunities for promotions came up.”

For Jim Lee, president and COO of Stater Bros. Markets, San Bernardino, Calif., who graduated in 1976, “Just because you attended the program didn't mean you'd been anointed to go on to grand things, but I believed the FIM program would provide me with the experience and the ability to do a job, and if just one position were open, that education would give you an edge.”

According to Kevin Davis, president and CEO of Bristol Farms, Carson, Calif., a wholly owned subsidiary of Supervalu, who graduated from the program in 1978, “The FIM program taught me how to be an executive and a leader. And it really creates a fantastic network of classmates so that, when you need help or advice on particular issues, you can bounce them off each other.”

Karl Schroeder, president of Safeway's Northern California division and a 1988 graduate, said the USC program “opened up a much broader world that I hadn't thought about, [because] it enabled me to study the industry as a whole rather than from just the perspective of my store within my company. I also got faster on my feet, which is a skill I use a lot today.”

Mike O'Donnell, executive director of procurement for Unified Grocers, Los Angeles, who graduated from the program in 2003, said the opportunities he had in the program to interact with other young executives from across the industry was invaluable. “Where else can you spend time with 30 students with an average of 20 years' experience from all segments of the industry?” he said.

“The USC program is a gem,” said Proulx. “It's an opportunity to learn and grow, and it has a proven track record of 50 years of executives who have gone through the program and come back to add value to their companies and the industry as a whole.”

Stevenson told SN that when he was contacted by representatives of the Food Industry Management program at USC, the university was looking for someone with academic credentials who knew the food industry.

When he came on board, there were only two faculty members — one teaching marketing and one teaching management, and neither of them was connected with the food industry.

“I recruited some additional instructors from the USC faculty and taught them about the food industry, and I brought in some executives from the industry and taught them how to teach,” Stevenson recalled.

Among the industry executives he recruited were Gene Walsh of Ralphs, Dale Lynch of Safeway and Bud Fisher of Lucky.

“Rather than ask them to talk theory, I asked them to share their thoughts on strategy, leadership and how the industry was changing, based on their own experiences coming up through the industry,” Stevenson explained.

Originally, scholarships were donated to the university by suppliers to pay the full tuition for students to attend the program. But over time it was decided that the money should go to the WAFC as part of its general scholarship fund, with some of the money earmarked to pay for students to attend the FIM program and some to help other students attend certificate programs at local junior colleges.

Class sizes were kept to a maximum of 40 students. Stevenson said in his early years, the average age of students was about 25, but as the program evolved, the average age rose to about 35.

“In my first years there, most of the students were checkers or cashiers or came from other low-level jobs at their companies, so it was easy for the companies to let them go for nine or 10 months,” he said. “But once they completed the courses, many would leave their companies. So we changed the requirements and said students had to have completed at least two years of college and had to be high-potential candidates within their organizations who were committed to their companies. Once we did that, the retention rate of graduates of the program was much higher.”

The school also began recruiting students from other areas of the country and even from outside the United States to provide a broader industry perspective. Over the years, there were students from Europe, Australia, South America and Mexico.

The school also began allowing suppliers to send some of their employees to the program to broaden the perspectives of everyone involved.

In 1973, the school introduced the Executive in Residence program to enable smaller companies and independents, who in many cases could not afford to send someone to study for a year, to participate in a one-week management program. Aside from highlighting some of the instruction from the regular program, the school also had a top-level industry executive spend half a day talking about their experiences.

By the mid-1990s, with more students coming from the district-manager level, some companies were struggling to let people go for a year, so it switched from a two-semester program to a one-semester program, Stevenson said.

“We looked at the courses and decided we could get 70% of the program into 50% of the time,” he explained. “And as a four-month program, it was like giving someone maternity leave, and the companies were happier.”

Although the USC program started at about the same time as food industry programs at Michigan State and Cornell, “we pretty much went our own way,” Stevenson said.

“One major difference between those programs and ours,” he said, “is that most students at the other schools were regular undergraduates who took the food-related courses as electives, whereas our students came exclusively from the industry and were committed to careers in the industry.”

When Arnold, who became director of the program in 1998, first came to USC as a graduate student in the early 1980s, the Graduate School of Business offered him free tuition to teach MBA students about computers. One of his students was in the Food Industry Management program, and he told Jim Stevenson about the class and suggested FIM should have a computer class.

“Jim was able to recognize the long-term value computers would have in the industry, and he asked me to teach a short, no-credit course on computers for his program,” Arnold explained. “That course really took off. It replaced the standard data analysis course with one that used the computer to analyze data — comparing advertising programs with sales results, for example — and, over time, the course grew and became more tool-oriented. To many students, spreadsheets were a miracle.”

In the late 1980s, Stevenson wanted to create a computer simulation of the food industry to add more variables and make the course more complex.

“We were able to collect data from various companies in the industry that showed what happened to sales when prices were raised, or lowered, or raised and followed by promotions, or raised right before a competitor lowered prices,” Arnold said.

The data was fairly consistent from one company to another, though there were some variations by region. The result of all that data was FIMSIM, a computer program that simulates competition for teams of students, who run their own companies as part of their classwork — not just in a theoretical sense but running real stores with real results to help students understand how the variables interact and what they can expect from any action, Arnold said.

That “helps develop a process in the student's mind about the kind of decision-making required so when they leave, they can do a better job,” he explained.

“FIMSIM changed the Food Industry Management program because it created a common experience for all students,” he said. “It became the centerpiece of the FIM program because all courses tied into the simulation, and when we talked in class about accounting and finance or capital expenses or communications, we had a common point of reference.”

The current program has a faculty of four. Arnold teaches a class on data analysis and strategy (FIMSIM); Ed Hill, a former executive with Alpha Beta and Abco, teaches a course on organizations and strategy; Ruben Davila teaches an accounting class; and Donna Miles teaches communications. Davila and Miles are members of the USC faculty.

The program now takes a maximum of 35 students a year.

“The main goal of the program is personal development — to enable each student to change how they are as a person and to enable them to learn more about themselves,” Arnold said. “They are here not just to learn how to execute a plan but also to learn how to figure out a plan and hand it to someone else to execute. Those are the kinds of people I look for, and you can't get that from the general student body.

“When students evaluate the courses at the end of the school term, they say they've learned more from each other than from any single course, book or speaker.”

The experience level this year is 12 years in the industry and an average age of 39, though 37 is more typical, Arnold said. But the average age is increasing, and the experience level is also increasing.

“The program always changes but the fundamentals don't,” he said. “Whatever skills and talents one needs to be successful in business — up to running a company — those skills and talents are the same: To know yourself, have integrity and be smart. There are a lot of different management theories, but they all boil down to good management and the skills and talents to get there, which are timeless.”

In the fall, when classes are not in session, Arnold visits companies and asks what industry issues the school needs to focus on.

“What we've been told in the last two years is that the industry needs more leaders who can help them to move faster in terms of identifying a problem, analyzing it, building a plan to fix it, executing that plan and moving on to the next problem,” he said. “The best compliment I get from industry executives is when they tell me, ‘You sent me back someone different than I sent you — someone who can build teams and solve problems and become part of the leadership of a company.’ That's what this program focuses on.”

The USC program is funded by approximately 60 donor companies, including some of the largest CPG vendors in the world, who contribute between $5,000 and $45,000 a year to the WAFC, which distributes the funds as scholarships.

Nestlé — now as Nestlé Purina PetCare, St. Louis — has been making contributions since the second year after the USC program was established in 1958. At 48 years, that's longer than other supplier.

General Mills, Minneapolis, has been donating for 47 years, and Kraft Foods, Northfield, Ill., for 46 years. Two companies have been on the donor list for 45 years — C&H Sugar Co., Crockett, Calif., and PepsiCo, Purchase, N.Y. Coca-Cola, Atlanta, has logged 42 years of donations.

In the last few years a handful of industry executives have begun making contributions, through a trust or as individuals in tandem with their wives:

The WAFC itself also sponsors a scholarship in the name of Jim Brown — former executive director of the association and a longtime Ralphs executive — and his wife Janet.

Another unique donor is Friends of the Industry, a group of CPG and service companies — some of whom donate to WAFC on their own — whose annual dinner, sponsored by Kies Consulting, Chicago, provides funding for various educational organizations, including the WAFC.

Student Voices: Bill Roulette, Class of 1960

Bill Roulette, 73, was part of the first Food Industry Management class at USC in 1959-1960. At the time, he was a 25-year-old assistant manager for Vons. Roulette retired in June 2003 as senior vice president of operations for Gelson's Market, Encino, Calif., after a career with the company of nearly 40 years.

“I was a junior at Long Beach State, working part time at Vons as an assistant manager, when a supervisor approached me and asked if I would be interested in attending this program the industry was starting at USC. In fact, at that point it was a single class taught by a single instructor — Merle McGinnis. He was the entire faculty, but he set up a lot of field trips.

“What the program did for me was, it opened my eyes to the whole food distribution network. I was so caught up in retail that I never thought about other aspects of the industry. But there were a variety of students in the class, including brokers, manufacturers and sales reps, as well as retailers, and I learned about different ways of looking at the business. It increased my knowledge of the industry and hooked me on the food industry.

“It also was an opportunity for sharing ideas with different people and seeing how each company approached issues like merchandising, personnel and security. You know what works for you is good, but it may not be the only way, and the program taught me to look at competition and see the good points that you could incorporate in your own company.”

Jim Lee, Class of 1976

Jim Lee, 57, attended the Food Industry Management program at USC in 1975-1976 when he was a 26-year-old in-store service manager at Ralphs. After 20 more years with Ralphs, he was named president and chief executive officer of Wild Oats Markets, Boulder, Colo. He left that position in 2001 and retired, until he was asked to become president and chief operating officer of Stater Bros. Markets, San Bernardino, Calif., in August 2002.

“I knew of several students who had gone through the USC program whose careers seemed to advance rapidly, and I was encouraged by my district manager to apply. Pat Collins [Ralphs' president] used to say that just because you attended the program didn't mean you'd been anointed to go on to grand things, but I believed the FIM program would provide me with the experience and the ability to do a job, and if just one position were open, that education would give you an edge, though you still had to earn it and make the most of the opportunity.

“The students competed with each other as teams, so it provided a great opportunity for teamwork. Through interactions with other students I learned there were a lot of similarities across the different companies but also different priorities and ways of getting things done that I found fascinating. It gave me a great foundation and helped all of us become more professional managers.

“After I graduated from the program, Pat Collins had enough confidence in me and others to have us work together to develop Ralphs' first electronic ordering system.”

Al Marasca, Class of 1964

Al Marasca, 66, had recently graduated from Loyola University in Los Angeles, with a degree in business. Aged 20, he was working as a part-time cashier and grocery clerk for Ralphs Grocery Co. when he attended the USC program in the 1963-1964 school year. He retired in 1997 as president of Ralphs.

“I had been working at Ralphs for six years, and I really liked the business, and I thought attending the USC program and going on to get an MBA in food marketing management would help me establish a point of difference with my peers in the company.

“The program gave me a technical education about the food industry that I couldn't have gotten anywhere else. For example, although I had a general business background, the FIM program talked about issues specific to the grocery industry — things like real estate site location, gross margin management, pricing and product mix management — that you wouldn't learn anywhere else.

“About 75% of the class were retail students, and the rest were from supplier companies, so I was able to relate to people with a manufacturer background that was a world-expanding experience for me.

“Everyone who has gone through it always has a sense of giving back and trying to maintain its quality, so I became a champion of the program at Ralphs and helped direct others toward the program over the years.”

Kevin Davis, Class of 1978

Kevin Davis, 54, is president and chief executive officer of Bristol Farms Markets, Carson, Calif., a wholly owned subsidiary of Supervalu, Minneapolis. At the time he attended the FIM program in 1977-1978, he was a 25-year-old assistant dairy/deli manager with Ralphs.

“I was interested in the USC program because I wanted to go to law school, and I was told if I went through the FIM program and wanted to continue my education, Ralphs would help me, which sounded really neat. So I transferred from UCLA to the USC Business School and was able to complete my bachelor's degree the year after getting my certificate from FIM.

“When I came out of the USC program, I was a store manager within a year, which was unusually fast.

“I got a great education through the FIM program, and it taught me how to be an executive and a leader. The program takes people who are already educated and know how to learn, and positions them with the perspective of an executive and the polished skills to be an effective leader. Those are things you can't get anywhere else.

“And it really creates a fantastic network of classmates so that, when you have questions later on or need help or advice on particular issues, you can bounce them off each other.”

Sue Klug, Class of 1984

Sue Klug, 48, was a 23-year-old computer programmer for Vons when she attended the USC program in 1983-1984. Today, she is president of the Southern California division of Albertsons.

“I knew a number of people at Vons who had gone through the program and who spoke highly of it, and I saw Vons was fast-tracking them through the organization, and it seemed like a way to get more experience and exposure in the industry.

“But when I applied, I was told I didn't have enough seniority to be selected, so I asked to speak to Jim Stevenson, the director of the program, so I could tell him how this was my dream and desire. When I did, Jim agreed to let me into the program, but he told me, ‘Don't disappoint me!’

“Most of the people in the class were at least 10 years older than me, and out of 33 students, 30 were males. So it's pretty exciting for me now to see more diversity in the FIM classes, which is reflected in the diversity in the industry.

“One thing about the program that was particularly interesting for me was the opportunity to meet people from all over the U.S. and the world. It was fascinating just to get insights from different people about how they approached problems and issues in their companies. I knew the Vons way, but I got to talk with students about the Kroger way, the Bi-Lo way, the Acme way and even the Jusco way with a student from Japan, so I got different perspectives that were all very enlightening because they gave me a broader view.”

Karl Schroeder, Class of 1988

Karl Schroeder, 49, attended the USC program in 1987-1988 while he was a 29-year-old store manager in Safeway's Phoenix division. He currently serves as president of Safeway's Northern California division.

“Like a lot of people in the industry, I was going to college part-time and taking one or two classes a semester in business management at a junior college in Phoenix. But when I saw a bulletin about the USC program, I saw it as a potential career opportunity — a way to set myself apart from other store managers.

“I was an above-average store manager who had opened a couple of stores for Safeway, but the program opened up a much broader world that I hadn't thought about. It enabled me to study the industry as a whole rather than from the perspective of just my store within my company.

“There was a lot of conceptual learning involving industry case studies, plus a fair amount of emphasis on communication and public speaking. It was also very practical because we were critiqued all the time, and I got faster on my feet, which is a skill I use a lot today.

“There was also a lot of self-assessment and looking inward at your own personality. The classes tested your learning style in terms of personality traits and how you related to others. You would take your history and how you scored on a personality test and then apply that to your professional life and set goals and figure out how to achieve them.”

Mike O'Donnell, Class of 2003

Mike O'Donnell, 47, attended the program in 2003 when he was a grocery manager for Unified Grocers, Los Angeles. Five years later, he is executive director of procurement for Unified throughout California.

“I've always been very pro-education and like to take advantage of opportunities to take classes to increase myself personally and professionally. I had heard a lot about the USC program over the years, but as much as I expected it to be, it turned out to be a lot better than I anticipated.

“The benefit I got from it came from my interaction with up-and-coming people from across the industry, which was great. Where else can you spend time with 30 students with an average of 20 years' experience from all segments of the industry? And most of the instructors had been there a long time, and their expertise added to my overall knowledge.

“One piece of information I learned that has stayed with me came from Ed Hill's class on organizations and strategies, which helped me deal with and evaluate people. We learned there are four types of personalities — dominant, inductive, steady and compliant — and knowing that has helped me get the maximum out of each relationship with the people I work with.”