SN'S POWER 50 2003-07-21 (3)

Stephanie Loughran / Carol Angrisani / Karen Demasters / Robert Vosburgh / Barbara Murray / Kelly Ga

25) Charles B. Strauss

President and CEO, Unilever United States

WHY: A corporate ringmaster who has the ability to juggle diverse interests.

WHAT'S NEXT: Growing Unilever's leading brands like Suave, Hellman's and Ben & Jerry's.

Unilever's Charles Strauss knows how to multitask.

As director and chairman of Unilever's North America Committee, president and chief executive officer of Unilever United States, and president of Unilever's Home and Personal Care division, Strauss and his marketing and sales team have the mighty task of focusing on the growth of Unilever's various master brands, which include Dove, Suave, Lipton, Ragu, Skippy and Shedd's Country Crock, among others.

"There's two fundamental ways that Charlie stands out as a leader who's rising above exceptional challenges," Don Stuart, partner, Cannondale Associates, Wilton, Conn., told SN. "One is with a diverse organization that spans food, health and beauty care, and home care categories. Two is his relentless focus on the master brands in the Unilever portfolio. He has been a strong proponent in the master brands focus, and in the process Unilever has whittled its portfolio to 400 brands globally."

Based in London and Rotterdam, Netherlands, Unilever -- the $47 billion Anglo-Dutch consumer products juggernaut -- acquired Bestfoods in October 2000 and, in the process, added culinary leadership with brands like Knorr.

Unilever brands account for about $17 billion in U.S. retail sales today, and more than half are merchandised through supermarkets, according to Strauss.

Strauss landed at Unilever in 1986, initially as president and chief executive officer of Ragu Foods. Within the company, Strauss worked at Unilever subsidiary Langnese-Iglo in Hamburg, Germany, and then became president and chief executive officer of Lever Brothers, New York. Strauss was appointed director of Unilever, chairman of the North America Committee, and president, chief executive officer of Unilever Bestfoods North American, Englewood Cliffs, N.J., in May 2000.

Unilever's Anglo-Dutch ties -- it is part of the Unilever Group owned by Netherlands-based Unilever N.V. and London-based Unilever PLC -- poses both challenges and opportunities for the company.

"Diversity can make the company powerful on a global basis, but it's also Unilever's most significant hurdle that they must overcome," he said.

Those hurdles have not stopped Unilever from brand expansion and innovation. For example, its Dove brand, originally a bar soap category staple, recently became a more complete body care brand.

On the food side, Unilever's Hellman's and Bestfoods launched Hellman's Dippin' Sauces last month as an extension of the popular Hellman's mayonnaise brand.

In a prepared statement, Strauss said, "Looking ahead, we're focusing on the growth of our leading brands, here and globally." He cited Dove as a prime example. "Dove is a $2 billion global brand, half here in the U.S. and growing annually well into double-digits. We have similar ambitions for our recently acquired brands in the U.S...great brands like Suave and Degree, Hellman's, Knorr, Slim-Fast and Ben & Jerry's."

STEPHANIE LOUGHRAN

26) A.G. Lafley

Chairman and CEO, Procter & Gamble

WHY: Focusing on what Procter & Gamble does best, A.G. Lafley is delivering results.

WHAT'S NEXT: Prilosec is set to launch as an OTC switch product this fall.

With a conservative style and message in keeping with the giant CPG firm's culture, Alan G. "A.G" Lafley has reinvigorated Procter & Gamble, Cincinnati, and charted a course that has so far resulted in significant sales growth.

Like the consumer packaged goods his company produces -- toothpaste, laundry detergent, deodorant and toilet paper, among a large array of other everyday household goods -- Lafley went back to the basics when he took over the Procter & Gamble helm three years ago, boiling down his message to tenets such as focus on the core brands and, above all, make the consumer the boss.

The focus and strong leadership have worked. The "800-pound gorilla in U.S. consumer products" that's famous for its Tide, Crest and Pampers brands has grown sales 7% over the last seven quarters, according to analysts.

"For a company that's $43 billion in size, that's an enormous performance," said William Steele, analyst, Banc of America, New York.

Lafley turned the Tide at P&G, quite literally.

He took over the company reigns in 2000. Durk Jager, P&G's previous CEO, fell out of favor after several missteps in company strategy and culture, analysts told SN. "The previous CEO wanted to change things 180 degrees, grow at all costs," said Joseph Altobello, research analyst, CIBC World Markets, New York. "Lafley really got it back on course, primarily through a renewed focus on core brands and core capabilities."

Lafley's diligence in lifting consumer awareness has not been limited to national advertising and promotions. He also stands out for his dedication to retail customers and their consumers, said Rob Steele, P&G president, North America. "While A.G.'s business results speak for themselves, it is his passion for spending time in stores and with our customers to find new ways to better serve their shoppers," he said.

P&G became bullish on brand extensions. When Dr. Johns Products created a sensation in the oral care category with battery-operated toothbrushes a few years ago, P&G acquired the company in late 2000 and leveraged the stalwart oral care Crest brand by creating the Crest SpinBrush, one of the most popular oral care products on supermarket shelves today.

Additionally, P&G purchased the Clairol hair care brand in 2001 for $4.95 billion and the German cosmetics company Wella earlier this year for $6.9 billion. Last year, it licensed the marketing rights for the over-the-counter heartburn product Prilosec from AstraZeneca, Wayne, Pa. Prilosec will go on store shelves in September, supported by P&G's biggest marketing campaign in recent years, said Jeff Barker, director of the company's Healthcare Marketing Development Organization.

"What A.G. is bringing to the company is a flexibility of mind that I haven't seen at Procter before," Steele of Banc of America said.

Clearly, flexibility, focus and leadership seem to agree with P&G and Lafley, but he's not one to rest on his laurels.

"In terms of the future, we will not become complacent," Lafley told SN. "We are competing in a very tough global marketplace, and it's only going to get tougher. I am confident we have the clarity of purpose, values and principles; the focus of clear strategic choices; and the strength of leadership to continue growing."

STEPHANIE LOUGHRAN

27) Betsy D. Holden

Co-CEO, Kraft Foods, and president and CEO, Kraft Foods North America

WHY: Oversees about 72% of the $30 billion in revenues at Kraft.

WHAT'S NEXT: Managing tactics designed to make Kraft No. 1 in addressing obesity.

Fortune magazine named Betsy Holden the No. 2 most powerful woman in business last year. It's easy to see why. Holden oversees about 72% of the $30 billion in revenues at Kraft, Northfield, Ill., whose products are found in more than 99% of U.S. homes.

She spearheaded the company through Kraft's initial public offering in June 2001, the second largest IPO in U.S. history. The company's stock has since gone up 9%.

Holden started her career at General Foods Corp. (which later merged with Kraft) in 1982 as an assistant product manager in the Desserts Division. After a series of promotions, she was named co-chief executive officer (with Roger K. Deromedi) of Kraft Foods, and president and CEO of Kraft Foods North America in 2001. She was first named president and CEO of Kraft Foods North America in May 2000.

Holden has used her position to give Kraft a leadership role in the food industry on many issues. Just weeks ago, the company announced several initiatives aimed at addressing the rise in obesity. Among them: capping the portion size of single-serve packages and eliminating in-school marketing.

Among other achievements, Holden managed the integration of the Nabisco business. The acquisition was one of the largest in the food industry, and helped to transform Kraft's business, Holden told SN.

Throughout the process, Holden made sure that Kraft paid attention to its employees, keeping them up to date on what was happening and why.

Another of Holden's top priorities is food safety and security.

"Food is ultimately about trust," Holden said. "If consumers don't have that trust, the entire industry is affected."

That's why Kraft lets other companies know about its food safety advancements, she said.

When it comes to brand identity, Holden wants Kraft's brands to be consumers' first choice.

"We look at what's most important to consumers, such as convenience, quality and value, and then build that into our products, packaging and services," Holden said. Holden never loses sight of Kraft's core business: providing consumers with the right products to put together tasty, nutritious meals for themselves and their families, said C. Manly Molpus, president and chief executive officer of the Grocery Manufacturers of America, Washington.

"As a working mom herself, Betsy is right in tune with core consumers, and that vision and focus is what keeps Kraft ahead of the curve with the right products at the right time," Molpus said.

CAROL ANGRISANI

28) Steven S. Reinemund

Chairman and CEO, PepsiCo

WHY: Bringing snack smarts to a multi-category company.

WHAT'S NEXT: Moving into the better-for-you arena.

Steven S. Reinemund is known as a hard-driving, ambitious man who sets far-reaching goals for any enterprise he heads. His two-year tenure as chairman and chief executive officer at PepsiCo is no exception.

Reinemund, who was groomed for several years to take over the top spot in the world's fourth-largest food and beverage company, wants to make PepsiCo the predominant company of its kind in the nation. If his track record is any indication, he has a good chance of achieving his goal.

A marathon runner who keeps himself in good physical shape, Reinemund sees two forces dominating the food industry for the future: good-for-you products and convenience. Despite the fact that his company sells soft drinks and snacks, he has taken both trends into consideration in planning PepsiCo's future.

Frito-Lay, which is owned by PepsiCo and was headed by Reinemund for three years in the late 1990s, expanded its line of snacks at that time to include low-fat and no-fat snacks. He now plans to have half of the product line in the better-for-you food category within five years.

Due mostly to changes initiated by Reinemund while he headed the North America division and then the entire company, Frito-Lay increased its U.S. market share from 39% to 57% in the 1990s. It is now 59%, and no other salty snack company can come close. Now, PepsiCo, based in Purchase, N.Y., has hired nutrition experts to help make it a much more health-oriented company.

The other force driving the market is the fact that people have less and less time to focus on food and meals.

"Today, our businesses are squarely focused on the most important consumer trend in decades: the demand for convenience," Reinemund said. The consumer desire for convenience is driving the market for those products up faster than other food and beverage categories, and "we have the capability to capture a lot more of this opportunity."

Reinemund's drive has put him in several different lists of the best company heads in the country. Business Week voted him one of the top 25 managers in the country last year based in part on the growth in sales for the company as a whole and the acquisition of Quaker Oats Co. for $14 billion, which included the sports drink Gatorade.

A survey of portfolio managers and sell-side equity analysts named him top executive in the beverage industry earlier this year, and Worth Financial Intelligence magazine named him one of the best CEO's for investors in 2002.

"Steve Reinemund has demonstrated unparalleled strength in his organizational and leadership skills," commented Manly Molpus, president and CEO of the Grocery Manufacturers of America. "He has great creative abilities and vision."

He has "demonstrated foresight about the need to provide good nutrition and that the food and beverage industry has a major role to play in addressing the obesity issue," Molpus added.

Part of the growth of the company has come from aggressive promotions, such as the $200 million deal to replace Coca-Cola as the official drink of the National Football League, which was consummated last year.

Reinemund does not shrink from a challenge and, in fact, said he feels the competition with Coca-Cola helps the company.

"We would be a far less capable company if we did not have that competition," Reinemund said in a recent interview with SN. "And we can learn from anybody who provides the same products we do, whether they are large or small.

"There has never been a more exciting time to be in the consumer products industry because the consumer is changing so rapidly," the CEO continued. That change in the marketplace is part of what is driving changes within the company.

PepsiCo has become known for aggressively promoting diversity within all levels of its work force. That is good for the employees but, according to Reinemund, it is also good for the company because without employees who understand the consumers, the company cannot succeed.

He plans to take full advantage of the economics of scale that can be implemented because of his company's massive size.

"The consumer is more complex today. We can provide the right product mix to meet each retailer's needs. The same demographic work we do for one division, to understand the consumer, is true for other products. And that provides more exciting opportunities for growth."

KAREN DEMASTERS

29) John Tyson,

Chairman and CEO, Tyson Foods

WHY: Made Tyson a multiple-protein brand name.

WHAT'S NEXT: Look for domestic product refinement and international branding initiatives.

Don't call John Tyson chicken.

The company he's been running since 1998 is chicken, beef and pork -- the largest processor of proteins in the country. In fact, one of Tyson's first big challenges was the contentious courtship and acquisition of meat packer IBP in October 2001. The $4.6 billion deal created a Fortune 500 company that is the dominant force in poultry, beef and even pork.

"They're about as large as they can get," said Christine McCracken, who follows Springdale, Ark.-based Tyson Foods for the equity research firm FTN Midwest Research, Cleveland. "They've put together the premier protein complex in the industry."

Industry observers were impressed with Tyson's guidance during the integration of both companies, which given their individual size, was speedy. The Tyson brand name was quickly expanded to cover beef and pork products: Tyson replaced the Thomas E. Wilson name on IBP's premium line of prepared entrees in 2002, and most recently the company unveiled a line of packaged, shaved and self-serve deli meats; case-ready pork; meal kits; frozen steaks, chops and roasts; and even shelf-stable grocery items like bouillon cubes and chunk chicken breast in cans and pouches.

The aggressive moves reflect a corporation under the firm control of a single vision that belongs to Tyson, who is the grandson of the company founder.

"I had the benefit of having a lot of good people both from the historical Tyson and IBP companies that truly believed that what we were trying to do was the right thing," Tyson recalled for SN. "When everybody had the right vision and the right belief, it became easier for all of us to focus on what we had to do."

"John came on board when Tyson dominated the chicken market for such a long period of time and was looking for new opportunities of growth, and John clearly recognized that," said McCracken, noting there was in-fighting among the board -- including Tyson's father, Don -- over the proposed IBP acquisition.

"It's a real tribute to John's persistence for staying behind the acquisition and staying committed to it," she said.

The attributes of commitment and perseverance have also helped Tyson guide the company through scandal. The company has been cited in cases ranging from insider trading to White House patronage. The most notorious was the 1998 convictions of a Tyson executive and its chief Washington lobbyist regarding $12,000 in improper gifts from the company to then-Secretary of Agriculture Mike Espy. The company paid $6 million in fines and costs, though Espy was eventually acquitted of all charges after a trial. While the incident occurred before Tyson's ascension to the top position, he has been at the helm during other tribulations. Most recently, Tyson successfully fought off a multi-count indictment alleging the company recruited illegal aliens to staff its facilities. On March 26, 2003, a federal jury acquitted the company of all charges; earlier the judge had dismissed 24 of the original 36 counts against the company.

"I think they are a natural target," said McCracken. "It's not a pretty business to be in."

In the meantime, he was busy working on one of his top priorities: to recraft the board of directors as the company grows out of its provincial origins to a truly global business force. Tyson won in his effort to reduce the size of the board from 15 to 10 members, and to add more outside directors. "We'll have opportunities to serve both their domestic market and to supplement our customers worldwide," Tyson said. "It's all about options." ROBERT VOSBURGH

30) Douglas N. Daft

Chairman and CEO, The Coca-Cola Co.

WHY: For re-focusing Coke's internal efforts and energies, and remaking the lines.

WHAT'S NEXT: Integrating the Minute Maid division into Atlanta headquarters.

By the time Douglas N. Daft was elected chairman and chief executive officer of The Coca-Cola Co. in early 2000 he had already put out some internal fires at the company during his tenure as president and chief operating officer and was ready to revamp his beverage platform.

Coke expanded into new markets when Daft led the launched of its Dasani line of bottled water -- which became the fastest-growing bottled water in the U.S. -- and revitalized its soda business with new cherry and vanilla versions of the classic Coca-Cola carbonated beverage. The latest introductions, Sprite Remix and Barq's Floats, are receiving a lot of attention.

The company is also currently revitalizing its Minute Maid juice and Powerade sports drink brands and is in a better position to play across all beverage categories than it has ever been, according to Neil Stern, senior partner, McMillan-Doolittle, Chicago.

"Like a lot of things, the death of carbonated beverages has been greatly exaggerated. In some ways, they are reaching maturity in the U.S., but Coke is even a more powerful brand internationally," Stern said.

Daft has also been able to start a new strategy that has proven successful for the company to date: independent market vigor. He is credited with giving independence back to the bottlers. Additionally, he made the decision to integrate Minute Maid into the parent company, which no other CEO had done, even though Coke has owned the orange juice company since 1960.

Daft never expected to be the head of Coca-Cola, deciding to join the company in 1969 as planning officer in his native Sydney, Australia office, because he "wanted to travel," he told SN. He went on to hold positions of increasing responsibility throughout Asia and eventually was elected president and COO in 1999.

His leadership skills will be put to the test in the coming months, as the road ahead for Daft is far from being obstacle-free. Coke is embroiled in an investigation into allegations of marketing fraud and product contamination, made earlier this year by an employee laid off during a company restructuring in March. This followed Coke's admission that managers in its food services unit rigged marketing tests three years ago in order to win business from the Burger King chain of restaurants.

Meantime, Daft is sticking with a plan he implemented right after taking over as president to de-centralize Coke's mammoth marketing infrastructure. Some observers fear the decision harms Coke's singular, iconic image, but others note Coke's diversifying product line demands more flexibility.

"Everybody looks to advertising to be the magic bullet, but it hardly ever is," Stern said. "Coke does a very good job of place advertising, building multiple points of purchase. Coke puts a lot of emphasis on being everywhere."

BARBARA MURRAY

31) Carlos M. Gutierrez

Chairman and CEO, Kellogg Co.

WHY: Successfully maneuvered Kellogg through acquisition of Keebler while remaining focused on growing the cereal business.

WHAT'S NEXT: Restructure snacks business and continue to grow the cereals.

As Tony, the Frosted Flakes tiger, might say: Carlos Gutierrez has done a "gr-r-reat" job during his extensive tenure at the Kellogg Co., particularly since taking over the reins as chief executive officer in April 1999.

Overseeing the Battle Creek, Mich.-based company that produces more than 40 different cereals with plants in 19 countries on six continents, Gutierrez has managed to see past cereal to other potential growth categories.

The consumer packaged goods giant acquired Keebler Foods in early 2001 and, despite the minor financial drawbacks common to a large acquisition, has increased dollar share in the U.S. cereal category.

Now, with the cookies and cracker business not performing as it should be, Kellogg is focusing on a restructuring this year, moving away from the integration of acquired assets and more toward stepping up organic growth. What this will entail is a certain degree of brand building -- which has begun with a return to cultivating the brand equity of Ernie the Keebler Elf -- combined with new product innovations.

Having worked his way up the ranks since joining Kellogg de Mexico in 1975 as a sales representative, the Cuban-born Gutierrez is more than ready for the task. He has held numerous positions in many of the global company's offices. Gutierrez believes his biggest accomplishments have been building teams of leaders "who have gone on to achieve extraordinary results" and his "27-year journey from a sales van in Mexico City to the corner office in Battle Creek."

He has pulled together a management team that has "really jelled," according to Christine McCracken, vice president at the Los Angeles-based FTN Midwest Research. "I think it's a function of the fact that people like to work with Carlos. He's a good leader; he sets a good example; he's very level-headed.

"Now the focus is on innovation, as it is with most of these packaged foods companies," McCracken told SN. "They've done a good job collecting a very strong portfolio of licenses [like Disney and Nickelodeon], and have come out with products that create a lot excitement in the category. And they will use that same strategy to go into the biscuit category."

Going forward, Gutierrez wants to see the Kellogg cereal business grow. "Our sales in many key markets around the world last year confirmed our belief that our cereal business can continue to expand." He also wants to capitalize on the growing interest in the wholesome snacks category and explore other growth areas, such as natural and organic foods. To this end, Kellogg will extend its Kashi brand of natural and organic foods to categories beyond cereal, he said.

"Most of all, we want to stay focused. Unlike other food companies, we are focused on key categories and capabilities instead of being a broad food conglomerate," Gutierrez said.

Stephanie Fagnani

32) Stephen W. Sanger

Chairman and CEO, General Mills

WHY: Has successfully driven growth of organic foods at GM.

WHAT'S NEXT: Getting Pillsbury performance up to speed.

Stephen W. Sanger already oversees the production of everything from Wheaties to Green Giant vegetables, but that variety is not enough to secure a place for General Mills, Minneapolis, at the top of the food industry. Sanger has dedicated much of his tenure as the head of the food giant to introducing new products.

Most recently, the desire for innovation has prompted the chairman and chief executive officer for General Mills to introduce and heavily promote organic lines of products in a way that is making the rest of the food industry sit up and take notice.

Consumers' desire to eat healthier is driving the organic and natural-food industries. Sanger has taken full advantage of this trend by establishing a Health Ventures division that includes Cascadian Farm and Muir Glen brands, as well as 8th Continent, a soy products joint venture with DuPont.

"Steve Sanger has had a long-standing and significant devotion to driving organic growth through innovation and marketing that makes it a fundamental core driver for profit and growth in the company," said David Adelman, a managing director with Morgan Stanley investment advisors and an expert in the food industry.

"Many companies say they want to promote organic, but few are truly devoted to it, and at the same time, effective in their execution," Adelman said. "Sanger is, and that distinguishes him from other executives."

Sanger has a business career that stretches back more than 30 years to his first position with Procter & Gamble. He joined General Mills in 1974, and worked his way up the ranks from marketing management to the top of the company, which he reached eight years ago. Since then, he has brought the cereal manufacturer to the head of the food industry through introduction of new products, despite a stagnant economy and slow growth in much of the food industry, particularly in the cereal industry.

"The other thing that distinguishes Steve Sanger is that he has been able to attract and retain extraordinarily talented business managers to General Mills, and he has been able to motivate them," Adelman added. "He has developed a tremendously talented organization of people who share his values."

Sanger has said turnover costs companies more than many other expenses combined, and he has worked hard to institute company policies that make General Mills and its many divisions worker-friendly. He has been lauded by Working Mother magazine for policies that encourage families and provide flexible time for long-term leaves and varied hours during the work week.

The biggest challenge facing Sanger is to bring Pillsbury up to General Mills' standards. The merger of the two companies in 2001, creating one of the largest food companies in the world, took longer than expected -- and started out with Pillsbury products performing poorly.

"Pillsbury moved from problematic to neutral, and is now performing acceptably," noted food expert Adelman, "but it needs to move up to the higher performance level expected of General Mills."

KAREN DeMASTERS

33) Douglas R. Conant

President and CEO, Campbell Soup Co.

WHY: Successfully initiated the most extensive product revitalization in the history of the Campbell Soup Co.

WHAT'S NEXT: Introducing a new "Kitchen Classics" line to its collection of soup offerings.

Douglas R. Conant has the Midas touch when it comes to revitalizing food companies.

As the 11th leader of Campbell Soup Co., Camden, N.J., in its 133-year history, Conant came to Campbell's after a memorable five-year stint as president of Nabisco Foods Co., where he led the $3.7 billion business to five consecutive years of double-digit earnings growth.

Appointed president and chief executive officer at Campbell Soup Co. in January 2001, Conant expanded his senior management team by adding eight seasoned consumer goods executives, four from Nabisco.

The group immediately implemented a strategic three-year Transformation Plan for strengthening Campbell's earnings, which had fallen significantly during the latter half of the 1990s.

The plan entailed revitalizing the U.S. soup category and strengthening the broader portfolio for consistent sales and earnings growth -- while continuing to drive productivity and improving organizational excellence and vitality.

Having rejuvenated Nabisco's core LifeSavers candy and Planters nut brands and directing the launch of the company's SnackWell's and LifeSavers Creme Savers, Conant was prepared to focus on major product changes at Campbell as well.

The most significant product launch under his watch was the 2002 introduction of the company's microwaveable Soup at Hand products, Campbell's response to the consumer demand for more convenient, portable foods. "We intend to make the 'C' in Campbell synonymous with convenience," Conant told SN.

Campbell's simultaneously introduced six new varieties of its Chunky brand soups and four new Select flavors, available in single-serve, microwaveable bowls.

Other changes made during Conant's two years in office:

Reorganized Campbell Soup's North American business operation into two separate business units, with new senior management professionals in place to ensure that greater efficiencies are met.

Revamped Campbell's Red and White line of soups by making cream flavors creamier, and through the use of a cold-blend method, added brighter, richer ingredients to numerous varieties.

Expanded Campbell Soup's international business by acquiring Australia-based Snack Foods and Irish company Erin Foods.

This fall, the company will be adding easy-open lids to its entire line of Campbell's Red and White condensed soups, and will continue to roll out gravity-fed shelving designs expected to make shopping for Campbell's soups easier and more convenient for consumers.

In 2004, Campbell's will replace its ready-to-serve Campbell's Classics line with a line of 10 ready-to-serve Kitchen Classics.

"I live for the success of the enterprise and the people associated with it, and I think people get a feeling for that as soon as we start working together," said Conant. "If you want to differentiate yourself from others, you have to have a culture of extraordinary people all focused on doing extraordinary things collectively."

KELLY GATES

34) Howard Schultz

Founder and chief global strategist, Starbucks

WHY: Built the Starbucks empire.

WHAT'S NEXT: Look for more Starbucks stores in exotic places.

Howard Schultz made Americans wake up and smell the coffee. In little more than 20 years, Schultz took Starbucks from a chain of four Seattle coffeehouses to a global behemoth with more than 6,500 retail locations around the world.

Starbucks sells more than just a cup of coffee, Schultz has said in describing the Starbucks "experience."

"You get more than the finest coffee when you visit a Starbucks. You get great people, first-rate music, and a comfortable and upbeat meeting place," said the founder and chief global strategist. "We establish the value of buying a product at Starbucks by our uncompromising quality and by building a personal relationship with each of our customers. Starbucks is rekindling people's love affair with coffee, bringing romance and fresh flavor back into the brew."

It didn't take long for Americans to buy the message.

"They're selling a beverage, but they're selling more than that," said Dan Geiman, with McAdams Wright Ragen Inc., also based in Seattle. "They're selling an experience. I think Starbucks is certainly a reflection of [Schultz's] vision and his drive."

Furthermore, licensed Starbucks locations can be found in supermarkets, bookstores, airports and office buildings, while store shelves are filled with branded packaged coffee, ice cream, and bottled and canned coffee beverages.

This year is another good one for the company. Starbucks reported same-store sales jumped 10% in June, while total sales went up 27% to $410 million. That news sent the company's stock price soaring.

In the beginning, Schultz had no particular expertise in brewing or marketing premium coffee. In fact, the 49-year-old Brooklyn, N.Y., native grew up in public housing where instant coffee was the norm. In 1981, Schultz was a vice president at a Swedish maker of stylish kitchen equipment and housewares, and Starbucks was one of his company's customers. The coffee company's orders for a special type of coffee maker caught his eye. When he visited the stores, Schultz sensed the small company had potential far beyond Seattle. He was hired the following year to head up marketing and oversee the stores. Schultz left the company to open his own string of specialty coffee shops, Il Giornale Coffee Co. He then bought the original Starbucks franchise in 1987 and, over the next five years, opened 150 more stores.

Having made his brand a fixture here, Schultz is focused on foreign expansion. The company operates stores in about 30 countries, Japan being the biggest overseas market. Lately, the company has struggled in various foreign cities, contending with fierce competition from established coffee houses and skeptical consumers who have not fallen in love with Starbucks' products. The company's Japanese business recently reported losses.

"I guess the difficulty or challenge is to expand in the right way and make sure it's effective expansion, including placing stores in the right places," Geiman said. "There's great opportunity out there."

LYNNE MILLER

35) William Wrigley Jr.

President and CEO, Wm. Wrigley Jr. Co.

WHY: Reinvigorated the company with new products, alliances and attitude.

WHAT'S NEXT: A continued development of the gum category.

It's no longer just chewing gum as William Wrigley Jr. works to reinvent the company. Under Wrigley's direction, the company pioneered Eclipse breath mints and breath strips, and, in introducing product with Procter & Gamble, has been trying to marry gum with health benefits. But what really took observers' breath away was its $12 billion bid last year to take over Hershey Foods, a bid that was ultimately unsuccessful, but which sent a strong signal to the business community about Wm. Wrigley Jr. Co.'s position.

"It's a new company, since [Bill Wrigley took over]. They've innovated more than they've ever done in the past. They've become externally focused more than insular, they've shown boldness, even audacity," said Neil Stern, senior partner, McMillan-Doolittle, Chicago.

"For a company that has never really had long-term debt to suddenly spend $12 billion reflects the aggressiveness of young CEO Bill Wrigley," wrote research analysts at Prudential Securities back on Sept. 18, 2002, when the bid was rejected by the charitable trust that owns the Hershey company.

"Bill Wrigley has done a great job of recruiting and surrounding himself with good players," noted Bob Hilarides, a partner in Cannondale Associates, a consultancy in Evanston, Ill., and Wilton, Conn. "There had been a very longstanding Wrigley culture that he has gradually shaken up. He's brought in new talent and listened to what they had to say. He has been very willing to take chances, and do things differently, like joint ventures, pursuing acquisitions, and the use of gum as a delivery vehicle, like for antacid. He's been investing in new products. He has been very eager to reinvent, but also nurturing of the core."

There is a much greater level of excitement and energy within the halls, observers noted. The company had a lot of good people already, but brought in some top-notch marketers. "It's been kind of fun to watch this company. They have turned themselves around, kept what is good," said Hilarides. "There were always a lot of positives about the way they had been managing the company for decades, but they brought some new thinking to the category."

Don Stuart, also a partner at Cannondale, pointed to the new products like Eclipse and the new flavors and packaging that were given to old standbys Juicy Fruit and Doublemint. "Globally, they're very strong, almost like Gillette or Coke," he said.

Stuart mentioned Wrigley's newly aggressive advertising, particularly with the tennis champions and sisters Serena and Venus Williams.

The challenges are to keep the gum business healthy, watching out for new competition now that Adams is part of Cadbury.

The great-grandson of the founder, Wrigley, 39, is the fourth generation to head the global company, taking over leadership upon the death of his father in March 1999. Since he joined the company in 1985, he has been active in every geographic region and every aspect of the business. He has also served on the company's board of directors since 1988.

BARBARA MURRAY

36) Tim Smucker

Chairman and Co-CEO, J.M. Smucker Co.

WHY: He helped build and now leads expanded EAN International.

WHAT'S NEXT: Adoption of data synchronization and other global standards.

In a world increasingly torn by international tensions, anyone who can play a role in bringing global cooperation and harmony is to be commended. Tim Smucker, chairman and co-chief executive officer, with his brother Richard, of 106-year-old J.M. Smucker Co., Orrville, Ohio, is one such individual.

Just as Pierre-Olivier Beckers, president and CEO of Delhaize Group, has worked as a retailer in promoting global electronic trading standards for retailers and manufacturers such as data synchronization and the electronic product code (see Page 42), Smucker, 59, has done so on the manufacturer side.

Smucker's involvement with standards goes back to 1995, when he joined the board of governors of the Uniform Code Council, Lawrenceville, N.J., for which he was board chairman in 1998 and 1999 and where he remains on the board and the executive committee.

Early in his tenure at the UCC, Smucker joined the Global Policy Committee -- of which he is now co-chairman -- to work on unifying the UCC and EAN International, Brussels, UCC's counterpart outside North America. Those efforts culminated last December when UCC, along with the Electronic Commerce Council of Canada (ECCC), became member organizations of EAN International.

In the course of his work on the Global Policy Committee, Smucker became more active in EAN International, leading to his election as vice president last October and president in May. "Tim has been working to bring the world together," observed C. Manly Molpus, president and CEO, Grocery Manufacturers of America, of which Smucker is a board member. "He has made it his crusade to bring the two primary CPG standards bodies together and to ensure that global standards for data synchronization are developed efficiently and quickly."

Smucker has helped the EAN board to expand to provide global representation, particularly at the CEO and chief operating officer level, noted Tom Rittenhouse, president and CEO of UCC. "Another benefit of having a leader like Tim is that he is not just a figurehead -- he knows firsthand the value of standards."

Rittenhouse is one of many who regard Smucker as an excellent listener and consensus-builder -- "two traits that are absolutely essential for leading a global standards organization," he said. Jack Haedicke, president, Arena Consulting Group, Eden Prairie, Minn., observed that Smucker "can be effective with a diverse group of people that don't get along all the time."

Smucker told SN that he is "very encouraged by the progress of electronic global standards. You can see the action now -- it's bubbling to the top." But he warned that companies "need to stay engaged," and urged top management to be "aware of who is involved in the standards process."

MICHAEL GARRY

SN'S POWER 50 ASSOCIATIONS/COUNCILS SUPERMARKET NEWS (SN)>

SN'S POWER 50

ASSOCIATIONS/COUNCILS

Byline: Michael Garry / David Ghitelman / Carol Angrisani / Elliot Zwiebach / Stephanie Fagnani / Robert Vosburgh

37) Tom Rittenhouse

President and CEO, Uniform Code Council

WHY: He shepherded the Uniform Code Council through unprecedented expansion.

WHAT'S NEXT: The slow-but-steady growth of the EPC.

Tom Rittenhouse, president and chief executive officer, Uniform Code Council, is adventuresome when it comes to branching out.

Since he took the helm in 1997 of the UCC, a nonprofit organization based in Lawrenceville, N.J., Rittenhouse has initiated such new ventures as its partnership with EAN International, the 2005 Sunrise initiative, its UCCnet data synchronization subsidiary, its eBusiness Ready software interoperability testing program, and most recently, its commercialization of the electronic product code (EPC) developed at MIT.

Moreover, thanks to Rittenhouse, the UCC is not just concerned with the retail industry anymore, reaching out to others that include medical and high technology (in its acquisition of RosettaNet). Since Sept. 11, 2001, UCC has even engaged in discussions with the Department of Defense and Office of Homeland Security, among others, on ways to track food and other items. And it has branched out internationally, joining IOS (International Organization for Standardization) and EAN International, UCC's counterpart outside North America.

Prior to coming to UCC, Rittenhouse, now 60, had a long career as an executive for department store retailer Strawbridge & Clothier and helped create the VICS (Voluntary Interindustry Commerce Standards) organization, for which the UCC became secretariat in 1998. He was the 2001 recipient of VICS' Roger Milliken Career Achievement Award.

Former supermarket executive Alan Haberman, who helped pioneer the Universal Product Code and the Electronic Product Code and has been a board member of the UCC for decades, gives Rittenhouse credit for driving the recent growth of the organization. While sharing predecessor Hal Juckett's vision of a broader organization, Rittenhouse took a more proactive approach in reaching out to other organizations and industries, said Haberman.

"He was receptive to new ideas," added Haberman, pointing out the UCC's adoption of Reduced Space Symbology codes for perishables; cooperation with the Global Commerce Initiative; and becoming a member of EAN International. The latter effort was not easy. "We wanted to keep our independence, and so did they ... Tom tied us closer together."

Also under Rittenhouse, Haberman noted, UCC decided to work with MIT to create the future of automatic identification technology -- the EPC -- at what became the Auto-ID Center. In May, UCC announced the creation of AutoID Inc., a new UCC/EAN subsidiary responsible for commercializing EPC technology.

Rittenhouse told SN, "The UCC does not arbitrarily select initiatives. We are guided by the business needs of our industry users."

While Rittenhouse has been criticized for reaching too far too fast, Haberman believes that approach is justified. "He sees time passing," Haberman said. "Technology goes so fast, and we had to learn to go fast."

MICHAEL GARRY

38) Tim Hammonds

President and CEO, Food Marketing Institute

WHY: Gives the food industry a strong voice in Washington.

WHAT'S NEXT: Continued work on several national issues.

In the decade since Tim Hammonds became president and chief executive officer of the Food Marketing Institute, Washington, the organization has scored several major successes with Capitol Hill and the White House.

In 1995, it successfully concluded 10 years of lobbying to convince Congress to phase out annual licensing fees assessed grocers and wholesalers under the Perishable Agricultural Commodities Act.

Two years later, the association played a leading role in inaugurating a joint government-association consumer-education campaign on safe food handling.

Then in 2001, it achieved two more long-term legislative goals when Congress passed and President Bush signed measures to repeal the estate tax and to scrap the ergonomics regulations issued by the Occupational Health and Safety Administration during the Clinton administration.

And last year, FMI joined in a public-private partnership that will enable the food industry to report, identify and reduce its vulnerability to attacks.

This spring, while the nation went to battle in Iraq, Hammonds kept busy pushing the industry's agenda through the corridors of power. "In the public affairs arena, there have been a lot of things under way, even as the war occupies attention," he told SN in April.

Among his priorities were lobbying for the passage of Bush's tax cuts, including the permanent elimination of the estate tax; making sure any prescription drug plan for seniors takes into account the importance of retail pharmacists; and encouraging producers to join the rest of the retail food industry in opposing the country-of-origin labeling provision passed by Congress last year.

According to Ron Pearson, chairman and chief operating officer, Hy-Vee, West Des Moines, Iowa, and immediate past chairman of FMI, "The Congressional delegation has the highest respect and rapport with the Food Marketing Institute. Tim has fostered that and grown it dramatically. I give him great credit for that. It's this ever-changing field, and public affairs are extremely important to the institute."

Hammond's personal background is not in government and law but farming and academia. Raised on a dairy farm in the Finger Lakes region of New York, Hammonds was a professor of agricultural economics at Oregon State University, Corvallis, before joining FMI in 1975.

And Pearson noted that Hammonds is more than just an effective spokesman to the government for the industry. "Tim is also a very good businessman," he said. "He has a good sense of what is needed for his members. He's very aware that just as we have to serve our customers, he has to serve his members."

The future of FMI is likely to involve continued growth, Pearson observed. On Jan. 1, Food Distributors International became a part of FMI, a move Pearson called "the biggest merger in the last 25 years, and it went almost so smoothly nobody knows about it."

Pearson said he expects FMI to continue growing through additional mergers. The industry is changing and has changed over the past several years," he said. "There's been multiple mergers and acquisitions, and FMI has to be a reflection of the industry. There is a need for more consolidation in the trade associations, and I see FMI being in that particular area because we have a great model. We have a number of very large companies, a number of independent players, and we're serving both constituencies very well."

DAVID GHITELMAN

39) C. Manly Molpus

President and CEO, Grocery Manufacturers of America

WHY: Helped to develop industry collaboration tools.

WHAT'S NEXT: Continue to foster collaboration between industry channels.

C. Manly Molpus' contributions to the food industry date back to the days when he was vice president of corporate affairs for Kroger Co., Cincinnati, where he played a role in the creation of the Food Marketing Institute.

His services continued when he moved to the American Meat Institute. As president and chief executive officer, he worked aggressively to boost meat consumption, which was on a decline at the time.

Molpus hasn't stopped since.

In the 13 years that he's been head of Washington-based Grocery Manufacturers of America -- the world's largest association of food, beverage and consumer packaged goods companies -- Molpus has made it a priority to address industry changes, including technological developments and industry consolidation.

"He recognizes the transformational nature of our industry and makes sure that the GMA stays focused on areas of importance," Richard H. Lenny, chairman, president and chief executive officer, Hershey Foods Corp., Hershey, Pa., told SN.

This demonstrates that he has a firm grasp and solid understanding of the needs of GMA members, Lenny noted.

"He understands our lines of business and the issues we face, whether it's efforts to build brands with consumers or collaborative efforts with our partners," Lenny said.

Indeed, collaboration across industries and channels is a major focus for Molpus. In an interview with SN, Molpus said it's critical to unify the industry through alliances and partnerships.

One way GMA did just that is by working with FMI to launch Efficient Consumer Response, which Molpus describes as the most important collaborative effort in the industry since the creation of the Universal Product Code.

"ECR was the bedrock upon which we began to think about collaboration on a host of industry issues, focusing on the supply chain side to get products to the shelf faster and cheaper, to the ultimate benefit of consumers," Molpus said.

GMA's extensive collaboration with FMI on ECR led to the first-ever joint board meeting with FMI, and eventually the adoption of the Global Technology Initiative on e-collaboration.

"We've been able to build industry consensus on standards for data synchronization and e-collaboration," Molpus said.

Among other moves, the GMA was instrumental in the creation of Transora, the electronic trading exchange, and has played an important role supporting the Uniform Code Council and UCCnet.

"Manly has put the GMA on the forefront of adopting changes and taking all unnecessary costs out of system and building a value-added supply chain," said Lenny of Hershey.

Molpus has made it a priority for GMA to develop significant resources and leadership on the issue of biotechnology to ensure that U.S. consumers wouldn't react as negatively as European consumers did to the technology. One way this was accomplished was through the creation of the Alliance for Better Foods, a North American communications effort. Likewise, GMA led the effort that overwhelmingly defeated proposed labeling of biotech foods in Oregon last year.

"Manly knows what the important issues are, what resources are available and how to allocate them," Lenny said.

CAROL ANGRISANI

40) Thomas K. Zaucha

President and CEO, National Grocers Association

WHY: Champion of the independent sector.

WHAT'S NEXT: To pursue NGA's 10-point agenda.

Tom Zaucha is confident the independent retail sector will continue to thrive and grow.

"Wal-Mart is driving forward while the top conventional chains are falling back into the pack as they struggle with debt and other problems, and it's at their expense that independents will gain sales," said Zaucha, who heads the National Grocers Association, Arlington, Va.

NGA defines independent operators as those that are community-focused and privately owned or controlled and that operate a variety of formats, rather than as owners of conventional grocery stores operating 10 or fewer units -- the definition that was in place when NGA was formed in 1982. Under the new definition, independent operators control a 45% market share, Zaucha said, and he anticipates that figure will rise.

His optimism is based on the determination of independent operators to grow, he explained, "and on their inherent ingenuity, creativity and ability to differentiate themselves from competition." Diversity is the key, he noted. "Diversity is valuable to consumers, and it's the keystone of our efforts to maintain a level playing field because with concentration comes a loss of price, variety and service, and that hurts consumers and suppliers."

Zaucha has been an advocate for independent operators for more than 30 years, initially with the Cooperative Food Distributors of America.

NGA membership totals 1,500 companies representing 25,000 stores. "We find ourselves attracting retail companies that 10 years ago thought they were fairly large chains," Zaucha pointed out. "But in today's environment, they understand their interests and needs differ from those of the Wal-Marts and mega-chains of the world."

Zaucha said he respects Wal-Mart, but is dedicated to helping independents survive against its onslaught. "Independents don't have to beat Wal-Mart -- they just must learn to compete with it," he explained.

"For independent operators in most parts of the country, they've learned how to differentiate themselves in terms of what to do and what not to do, so the brunt of the Wal-Mart hurricane is past. And although operators in other parts of the country, particularly California, have yet to face the hurricane, they have more of a track record to learn from, and our job at NGA is to make sure they are aware of that record."

Looking ahead, Zaucha said NGA plans to actively pursue its 10-point agenda: competing effectively against supercenters and other power buyers; repealing the estate tax; creating a level playing field; reinventing the supermarket as a lifestyle destination center; winning back center-store sales; recruiting and retaining a new generation of quality managers; enabling retailers and wholesalers to operate as a virtual chain; taking full advantage of all available technology; creating new synergies to achieve more competitive economies of scale; and accessing competitive growth capital.

ELLIOT ZWIEBACH

41) Brian Sharoff

President, Private Label Manufacturers Assocation

WHY: Advocate of store-brand development.

WHAT'S NEXT: Executive education on the power of private label.

It's been hard to put a label on Brian Sharoff. Too, his life has been anything but private. Yet since being elected president of the New York-based Private Label Manufacturers Association in 1981, he has become known as the force that has steered the organization, which is dedicated to the promotion of store brands, to its current position, with more than 3,400 worldwide members ranging from supermarket retailers and food manufacturers to suppliers and brokers.

The retail world was not new to Sharoff, who served as executive vice president of the Metropolitan New York Retail Merchants Association from 1977 to 1981, which represented large department store chains. During this time, Sharoff associated with the heads of major U.S. department stores, which he told SN gave him an understanding of the unique way in which retailers look at business. He also served three terms as a member of the New York State Legislature, which no doubt helped to cultivate his leadership skills.

"The personality traits that I would ascribe to him are someone who has vision, but is grounded in reality and pragmatism as well, and then someone who is simply always looking for the next best thing. And I think that plays itself out in the programs that we have done," said Joe Azzinaro, a longtime consultant to the PLMA.

One of the projects under Sharoff's helm saw the PLMA making strides in erasing the borders that separate domestic and international retailers through the creation of the PLMA's "World of Private Label" International Trade Show in Europe in 1986. Coupled with the association's annual trade show held in Chicago every fall, it gave the private-label industry a major boost as worldwide retailers and manufacturers began to learn from each other's successes and failures.

Attendance at the fall show continues to grow each year. "His organization has accomplished a most unique feat -- growing their annual trade show attendance, while most others are in a steep decline," said Ralph Jacobson, retail food industry marketing leader for IBM Corp., Los Angeles.

Sharoff also spearheaded the creation of the PLMA's annual Private Label Yearbook in the 1990s in conjunction with Information Resources Inc. in the United States and ACNielsen in Europe, making private-label sales data available for the first time.

"Once this information came out, the true growth of retailer brands became indisputable," Sharoff told SN.

Looking toward the future at the changing retail landscape, Sharoff believes private-label products will play a major role in how retailers serve their particular customer base. Continuing in its role of educator, the PLMA will move forward with its three-year-old executive education program, which brings together retailers and manufacturers in a relaxed setting to conduct scenario-planning sessions and case studies in partnership.

STEPHANIE FAGNANI

42) Bryan Silberman

President, Produce Marketing Association

WHY: Produce industry's go-to person.

WHAT'S NEXT: More intense global outreach.

It was international outreach that brought Bryan Silbermann to the Produce Marketing Association exactly 20 years ago. Global issues remain a primary focus as he moves the organization forward.

Silbermann's sure, steady leadership of PMA, Newark, Del., since assuming the president's position from Bob Carey in 1996 is reflected in the more than 2,400 companies that are currently members, all of whom market fresh fruits, vegetables and related products worldwide. His is not an easy role. Besides administering to immediate membership needs, the produce business itself is increasingly complicated, having grown from a small department of 200 items to a super-category featuring more than 600 products sourced from around the world year-round.

"Bryan is extremely bright, personable and a real consensus-builder," said Dick Spezzano, an industry consultant who was highly involved with the PMA during his retail years as vice president of produce at Vons. "The things we are doing require consensus, and he's great at getting things done and all the details taken care of."

During his tenure, Silbermann and PMA have encountered numerous challenges as the industry began undergoing a bout of growing pains: retail and supplier consolidation; food safety; consumption levels; transportation; and technology.

Keeping close to PMA's mission ("To sustain and enhance an environment that advances the marketing of produce and related products and services"), Silbermann worked to highlight the enhancement of the produce industry, both internally and with consumers.

One of his key responsibilities early on was to help develop generic price-lookup codes for produce and floral. Spezzano, who headed up the produce electronic identification board in the late 1980s, said Silbermann was familiar with technology long before many of his peers.

"Bryan was in charge of bringing PMA into the next century when it came to computerization and programs and computer-based training," he recalled. "You can only do that by being good at what you do, and providing value to the membership."

Silbermann was also a point person in helping create the Produce for Better Health Foundation in 1991, the nonprofit organization responsible for the national "5 a Day" campaign.

"The entire industry is coping with the changing realities of the global marketplace, whether it's sourcing or exports or regulations or culture or language," Silbermann said. "PMA will continue to be a home and a learning network for produce marketers. Within that global context, individuals and companies have to find their place and prosper. We must make sure we grasp individual member needs and provide relevant tools for their success."

ROBERT VOSBURGH

43) David T. McConnell Jr.

President and CEO, GMDC

WHY: Leading GMDC to record growth at a time when other trade groups are struggling.

WHAT'S NEXT: Broadening participation in GMDC's trade conferences, and a GM and HBC "Merchandising Roadmap."

There is power that comes from listening. From all accounts, that is David T. McConnell Jr.'s greatest strength in guiding the industry's pre-eminent nonfood organization.

But listening does not mean passivity. Far from it. As president and chief executive officer of the General Merchandise Distributors Council, Colorado Springs, Colo., McConnell takes what he hears from membership and turns it into initiatives that have resulted in growth for this association at a time when many other trade groups regard staying even as a major victory.

In a collaborative environment like GMDC, industry observers say they have a difficult time giving credit for specific accomplishments. But McConnell is seen as the team leader who gets members to check their egos and self-interests at the door when they sit down to do the business of the association.

"He is able to generate and utilize excitement and support from the entire membership, and position it in such a way that is positive, not only for GM and HBC, but for the industry as a whole," said Rick Tilton, president emeritus of GMDC. Tilton, who was McConnell's predecessor and mentor, also cited his industry knowledge, public speaking ability and personal relationships as keys to his success.

"The source of Dave's power is the ability to put retailers, wholesalers and manufacturers together in a positive environment, as well as his ability to see changes in the marketplace and adapt quickly to take advantage of them," said Jeff Manning, managing partner, F&M Merchant Group, Lewisville, Texas. A former nonfood executive with Bashas' and Fleming, Manning also was a long-time GMDC board member and has served as chairman of the group.

"We're a 33-year-old successful trade association that has to think like a startup," McConnell said. "Startups are lean, mean, hungry and innovative. My job is to ensure that the GMDC boards and staff work in concert so that our services are innovative, cutting edge and above all, relevant in today's marketplace."

McConnell joined GMDC in 1980 as director of membership and served in a number of other executive posts until he was named president and CEO on Jan. 1, 2000, upon Tilton's retirement. He has played pivotal roles in many of the association's successes, such as the establishment of the GMDC Educational Foundation in 1993 and the technology-based UCCnet in 2000.