They say February is the cruelest month. Like so many people wanting relief from winter, food processors last month looked to the U.S. Department of Agriculture for some signs of relief from record commodity feed and/or ingredient costs. It was in February that USDA released its annual acreage planting projections and hosted its annual Agricultural Outlook Forum.
The bottom line? Although experts project something of a return to normalcy (whatever that means in a new biofuels world), these commodities won’t be cheaper anytime soon. OK, that’s cruel.
Now the question is, “How are you going to respond?” I’m not only interested in the “how” that involves your future actions - but also in the “how” that involves your attitude when working through adversity.
Interestingly enough, another February meeting showcased several companies’ actions. Speaking at last month’s annual Consumer Analyst Group of New York conference, executives for Tyson, Kellogg, General Mills, ConAgra Foods (and others) talked about attacking costs and pushing innovation. These strategies involve:
- reducing and/or reconfiguring operations and distribution activities;
- raising prices or reducing package size;
- lobbying for changes to the government mandate on corn-based ethanol and the removal of tariffs on sugar-based ethanol products;
- developing more high-margin products, particularly ones emphasizing convenience and/or health and wellness;
- and revisiting products. General Mills, for example, cut the number of shapes in Chex mix (and other snack mixes) to three from 14. Elsewhere, Tyson said it has been “optimizing” the number of value-added breast portions from each chicken. ConAgra said it will reduce its number of shelf-stable can sizes to 20, from 100, during the next two years.
What steps will your company take during this time? No less important is the attitude your company adopts during this challenging time. Power of Positive Thinking author Norman Vincent Peale says, “Enthusiasm releases the drive to carry you over obstacles and adds significance to all you do.”
I happen to agree and - to my way of thinking - you can tap into a certain organizational energy if you actively lead and direct its course. Rather than look at these next few years as drudgery and cost-cutting toil, I’d suggest that you follow McCain Foods’ example (see our January issue) and creatively challenge your leaders to uncover and adopt best practices in every facet of your business.
Who knows? You might even have fun in the process - and time flies when you’re having fun.
Viewpoint: How Will You Respond?
By Bob Garrison
April 3, 2008
Bob Garrison came in from the cold. A founding editor of BNP Media's Refrigerated & Frozen Foods (R&FF) Bob has profiled industry-leading companies, explored corporate strategies and covered food product development trends at more than 150 leading private and CPG companies since 1989. He has chronicled the histories of leading brands and businesses, including Gorton's, ConAgra Frozen Foods (Banquet) and Swanson's frozen TV dinners. He also has interviewed or profiled such food industry leaders as Mike Harper (ConAgra), Don Tyson and frozen bagel icon Murray Lender.