retail news in context, analysis with attitude

PORTLAND, OR. -- The strategies and tactics being used by two very different companies were on display yesterday in two presentations offered at Portland State University’s Food Industry Leadership Center (FILC) 2011 Executive Forum.

One was a global coffee retailer with the stated intention of doubling its size through the expansion of its CPG business; the other was a local supermarket chain on the verge of opening its eleventh store. But both are focused on paths to sustainable growth.

Let’s start with the supermarket retailer. Lisa Sedlar, the president/CEO of New Seasons Markets, talked about the importance of “taking the long view,” and “not making decisions based on quarterly profit. I’m not cavalier about profit, but we want to take the long view.”

Sedlar said that New Seasons has a bottom-up culture, and she said that she was proud of the fact that the company had no layoffs during the recession of 2008-2009 - largely because employees had helped her adjust staffing levels to reduce costs. “I asked the staff for help,” she said, and people volunteered to work fewer hours and even change stores if it would help keep everybody employed through tough times.

The relationship is symbiotic. Staffers act with a sense of ownership, and the company offers a minimum wage of $10 per hour, provides a high level of affordable health care coverage, and shows a real commitment to community engagement and local sourcing.

“As some companies grow, their culture often becomes less robust,” Sedlar said, noting that maintaining New Seasons’ cultural priorities is one of her most important goals. That means a decentralized approach to management, because “even though it increases complexity, “it is worth it.”

One other note. Sedlar did something that I cannot recall ever hearing a retailer do before. When she talked about shoppers, she often referred to them as “eaters,” as in “eaters can relate to food that tastes better.” Which strikes me as an important distinction ... and a good way to maintain focus on the unique relationship between food stores and their customers.

The other company was Starbucks, represented by Jeff Hansberry, president of Global CPG and Foodservice, which means, he said, “everything beyond the third place...across channels, countries and categories.”

Hansberry pointed to two ways in which Starbucks’ growth is going to fueled in coming years. One is the expansion of its single serve business, which was ignited by the introduction of its Via instant coffee product, which exploded into a $200 million business within a year of being launched; this side of the business is expected to get another big boost next week, when Starbucks coffee becomes available for brewing in Keurig single-cup coffee machines.

In addition, Hansberry said, the expansion of Starbucks’ CPG business - into categories where the company can maintain its reputation for having a premium offering that is consistent with the Starbucks experience - is a major initiative that will help reshape the company in organic ways while always maintaing the core value of being “the coffee authority.”
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