Almost a century has passed since Kellogg’s products first hit Aussie shores, quickly becoming a staple in Australian households. And though the name is more recognisable than ever, the last decade hasn’t been without its challenges for the cereal giant.
Between 2009 and 2014 global cereal sales dropped 5 per cent, as health-conscious consumers turned to açaí bowls and smashed avocado. The cereal giant listened to the cries for better-for-you options, improving the nutritional value of many of its cereals and diversifying its range.
Last year, things started looking up for its ANZ operations. With Belinda Tumbers at the helm, the business began a turnaround journey.
The woman tasked with leading the company into the next phase of that turnaround journey is Esme Borgelt, a leader with extensive experience across major industry players, including Kimberly-Clark.
After nearly 15 years at the iconic cereal giant, Borgelt quietly took the reins of Kellogg’s Australia and New Zealand operations in January this year.
She spoke to Inside FMCG about her goals as managing director and how she plans to create a more integrated work culture to ensure the business powers through the tough times ahead.
INSIDE FMCG: Where do you hope to make the most impact as managing director of Kellogg’s ANZ?
Esme Borgelt: We’ve been on a turnaround journey in ANZ for the last couple of years to get the business back on track and we delivered a solid set of results at the end of last year. My number one focus now is not only to sustain that growth but to fuel the momentum that we’ve built. I think to do that we’re going to have to look at how we can do things differently.
We need to drive behind our greatest opportunities with our food, the way that we work and for our people. Our people are our competitive advantage, so we really empower and challenge them to drive the business forward as if it were their own company. What’s important is that people feel that they can make an impact here and have the opportunity to thrive. What I’d really like to see is how we truly break down functional silos and then we give people the chance to work more broadly across the organisation and in a more integrated way.
INSIDE FMCG: How would you describe your leadership style?
EB: I would say that my style is open and direct. I really value having honest and transparent conversations with the team about the job to be done. The challenges we face and then working together to find solutions to overcome those challenges or to unlock the opportunities that we have.
I also pride myself on taking the time to really listen and understand other people’s points of view. I like to hear what is happening for them and their roles, with their teams or outside of work as well. I guess for me it’s about leading with empathy and to deliver impact knowing your people and what makes them tick, where their challenges lie and then creating the environment to enable them to be their best and challenging them to make an impact here at Kellogg’s.
INSIDE FMCG: Kellogg’s is responsible for so many classic breakfast items, but how is it continuing to innovate to remain at the forefront of the category?
EB: I think innovation must be supported by a process that drives value creation. Typically, this sits with our R&D department, and though that’s still the case and we look to unlock the functional expertise in that process, I think innovation touches the whole organisation in some shape or form.
We’re starting to harness the thinking from across the business to drive that process to a better outcome at the end. That is providing a win-win for the business but also for people who are now getting exposed to things that they typically wouldn’t have when you’ve got a very functional approach to business.
INSIDE FMCG: How is Kellogg’s ANZ working towards better sustainability in the supply chain?
EB: Taking care of the planet is very important to us and is one of the key pillars of our company’s corporate responsibility strategy. We focus on reducing energy and water use across our business, sending zero waste to landfill and sourcing our top 10 ingredients responsibly.
We’re making progress on our global packaging commitments, which we announced last year, to get 100 per cent of our packaging to recyclable, reusable or compostable by 2025. We’ve got lots of work to do in that space but we’re on track. We’re also very excited to announce a new power purchase agreement with a new solar farm in Beryl, NSW, to acquire the equivalent of 100 per cent of our energy requirements from its manufacturing operations.
INSIDE FMCG: Kellogg’s ANZ is a great example of a company that promotes and encourages female leaders. How does the company continue to drive diversity across all levels of the business?
EB: That is a personal passion of mine around diversity and inclusion as well and I’m really proud that this isn’t new for us. This commitment can be traced back to our founder, W.K Kellogg, who was a pioneer in employing women and reaching across cultural boundaries many years ago.
We are focused on accelerating our gender equity progress to increase female representation across all areas of the business.
Diversity goes across gender, culture, generation and experiences and by harnessing all of that it makes us stronger and it’s the key reason for our business success over the past 100 years. We started up another local group in ANZ called Kommunity (with a K, of course!) with a bunch of passionate people who act as ambassadors and they champion inclusion, wellness and generational initiatives in our workplace.
INSIDE FMCG: Kellogg’s has come under criticism in the past for the use of cartoon characters to promote ‘sugary’ cereals. Do you think it’s time to rethink the marketing of these products or is the criticism unjust given the steps already taken to reduce sugar?
EB: Our characters are a strong part of our Kellogg’s heritage and who we are, and there’s a lot of nostalgia for Snap, Crackle and Pop, Tony the Tiger and Coco Monkey. I’m sure that plenty of people have very fond memories of growing up with them. I think the criticism towards the food industry and Kellogg’s doesn’t take into account the science or the work that we’ve done to respond to what consumers are wanting or looking for.
From a food point of view, we’re consistently working to reformulate and launch new food to meet people’s needs. We’ve removed artificials, reduced sodium and sugar and focused on delivering more fibre and wholegrains into the diet. The nutrition science shows cereal is a great way to start the day and that people who eat cereals have better diets overall with higher levels of vitamins and minerals like iron for energy and higher level of fibre for a healthy gut. We also know from this research that cereals only contribute 2 to 3 per cent of the sugar intake.
INSIDE FMCG: Who or what inspires you in business?
EB: Here at Kellogg’s we talk a lot about leadership courage and embracing nimble learning as key competencies. I’m incredibly inspired by the story of Malala Yousufzai, a young Pakistani girl who at age 15 was shot in the head by the Taliban and survived. She was shot because she relentlessly defended the right of girls in Pakistan to have an education. This very soft-spoken young girl has proven that just one voice can truly change the world. Her personal leadership is grounded in kindness, grace and humility, but she perfectly embodies courage and fearless determination, all qualities that I aspire to have as a person and as a leader.
INSIDE FMCG: What’s FY20 looking like for Kellogg’s?
EB: We’ve just closed out our first quarter this year and the team has delivered a terrific performance. I think it’s a tough year. Australia is experiencing the worst drought in living memory, and there are a lot of Aussies that are doing it pretty tough right now. We’re very focused on making a difference to our people and the community that we are a part of and to live to our purpose, which is to nourish families so that they can thrive through our foods and our brand.