Snacking on success
How does one of the world’s largest snacking companies handle a global trend towards healthier food choices? Well, they don’t take it lying down.
With about 60 per cent of beverage sales from sugar-free products, PepsiCo is ahead of the curve when it comes to changing consumer preferences.
PepsiCo Australia and New Zealand CEO Danny Celoni is quick to credit the innovative thinking across all aspects of the organisation.
With popular brands like Smith’s Chips, Quaker Oats and a string of successful beverages under his wing, Celoni is adamant that he will not accept low growth and insists that there is more value to be had in the category.
With a year in the top job under his belt, Celoni talks leadership at all levels and empowering others to fail fast and learn faster.
INSIDE FMCG: Looking back, what would you say has been the highlight of your first year as CEO?
Danny Celoni: I’m just so impressed with the people in the organisation. Literally at all touch points as I’ve gone across the country and in New Zealand, the passion that people have for the business, the focus on growth that I see, people who have ideas flowing consistently about how we get better at what we do; that to me has been one of the biggest highlights.
For quite some time this category was in flat growth, and we took a stance that we will not accept low growth in the snacks category, because we believe there is more value to be had for consumers, retailers and ourselves. And when the team embraced category expansion thinking, really solid innovative thinking came in the innovation pipeline, the way we went to market, our manufacturing footprints. So the mindset change for me was a real highlight; the minute we said it’s all about growth, opportunities in abundance really opened up.
INSIDE FMCG: What would you say is the biggest challenge facing the snacking industry?
DC: I think the first one is really about bringing true differentiation into our retailers. The retail environment is somewhat still consolidated, although we’re seeing more new entrants coming in and new channels opening up, but our retailers have a certain amount of space available for the marketplace. In yesterday’s world duplication was okay, in tomorrow’s world duplication is not okay, it’s all about differentiation and value creation. As suppliers, not only PepsiCo but across the industry, we need to think about category and we need to think about how we bring true differentiation to our consumers because that’s going to warrant our retailers to open up the space.
Secondly, I think it’s important as an industry that we don’t allow consumers outside our offices to run faster than we run inside our offices. We’ve seen this global trend of healthier choices, and the way we mobilise against that, the way we build innovation, creative thinking in the space, manufacturing and supply footprints etc. is really important. So getting ahead of the game on better-for-you options in the portfolio is really important.
I think as an industry we all have a greater role to play on the sustainability agenda. And I think it’s really important that the whole industry, not just in snacks, but all suppliers need to think hard and fast about how we all create more sustainable solutions whether that’s in agronomy, packaging or some of the products we bring to market and ingredients we use.
INSIDE FMCG: How has Performance with Purpose helped PepsiCo become a more sustainable company?
DC: It’s really about having positive impacts on the social environment, economic environment, the broader environment and looking at it through the lens of the products we create or the impact we have on the planet, or even championing diversity through people. I think across all those areas our Performance with Purpose agenda has made huge strides.
INSIDE FMCG: How important is diversity to the culture at PepsiCo?
DC: At the moment 54 per cent of our executive leadership team is women. While we knew we wanted to create a balance, the fantastic element that came to life here, was that we were just looking for the right people for the right role, and they just happened to be female.
We’ve got a really strong balance now on the team and we continue to do that across all facets of our business, and extending that diversity element further because as an organisation we really believe in the importance of bringing different perspectives, different lenses, different global experiences to life, because ultimately the outcomes are just better.
INSIDE FMCG: What is your definition of a good leader?
DC: Where I’ve I had the best experience and where I want to continue in my leadership is to create a strategy that is engaging, motivational and creates a future outlook for our people, our suppliers, our retailers, because I think it really starts from there.
The first step then is to align the organisation behind that, so literally the heart and mind of every single person within the organisation, every touchpoint, has absolute clarity on where we’re going and what role they play.
The second one is building execution as an organisational muscle; getting laser point sharp on understanding what gold standard execution looks like, making sure that our execution delivers our strategy outcomes.
And the final one is renewing. Making sure that we’re scanning the environment to pivot when we need to, not stick to a strategy that may become redundant, but looking into the distance and asking what are the areas that are still relevant and what are the areas that we need to review and how do we adapt on a constant basis.
I think it’s absolutely important that leadership doesn’t live in the boardroom. It’s literally leadership at all levels and I wholeheartedly believe that across every touchpoint in the organisation we have huge value to add. It doesn’t matter whether you’re the most senior person, the most junior person, regardless of function, we have a lot to learn from each other.
INSIDE FMCG: How do you handle failure in business?
DC: We need to lean into big thinking, disruptive thinking, transformational thinking and accept that failure can be an outcome. I don’t want to sound cliché but I think at times failure needs to be an outcome. And if we’re not thinking big enough, disruptive enough, it means we’re just not pushing ourselves big enough.
We need to understand that failure is a possibility and then get on the front end of this and think about all the things that could go wrong and have ready-to-go plans against them. We talk about “fail fast and learn faster”, because the element of failure is important to be a success.
INSIDE FMCG: Who are your biggest inspirations in business?
DC: I’ve a long list of people who have really left a footprint on my heart and my mind in terms of learning things. I think the people who have been really influential are the people who have gone out on a limb for others. I can think of a couple of leaders who have put me into roles where I never would have put myself into. They just had the belief that with the right level of talent, the right support, the right motivation, I would just work it out and they would be there for the good times and bad.
And I’ve taken that through to my own career. About a year ago, I promoted a senior sales leader who was away on maternity leave and didn’t even think about applying for the role because she didn’t think she was right for it. I just knew there was something there and she was a great leader. Now, 12 months down the track, she is unbelievable and adding huge amounts of value.
INSIDE FMCG: What are your ambitions for the company this year?
DC: We took a slightly different approach this year when developing our five-year plan. We built a strategy that was at best 60 per cent completed and I said to the ELT, now I want to get the top 100 leaders in the room for three days and I want us to develop the strategy together. And what we achieved in those three days was absolutely unbelievable. My ambition now is to see these 100 leaders lead the other 2000 people into delivering this great strategy. It’s anchored in growth for us, for our retailers and I think it’s going to bring great consumer choices.
The second thing is, it’s my ambition to make sure that we continue with diversity, the inclusive nature and flexibility in work. The reality is we don’t need to sit around and tell people how to do their job or what time to come in; we just let people know they’re fully resourced and supported and if we’re focused on the outcomes, how you get there doesn’t matter.
This interview first appeared in Inside FMCG’s quarterly magazine. Subscribe now for more interviews with leading figures in the FMCG industry as well as expert advice and opinion.