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Taking the Pulse of the Consumer Landscape: A conversation with Ready Pac Foods CEO Tony Sarsam

he produce department is fresh food theatre at its finest. You have your drama, your intrigue, and your art. And even more so, you have your players striving for the spotlight. In the competitive landscape of fresh produce, the consumer basket is changing, and one of those categories bringing flavor, vibrancy, and excitement to the stage is within fresh prepared meals, or as I like to put it–the “Band-Aid free zone.” Locate the value-added produce and salads section, and the wall of salad art will stop you in your tracks. Helping to lead the charge in this category, is Ready Pac Foods, U.S. producer of convenience fresh meal solutions, salads, and fresh-cut produce.

Having recently entered into an agreement to be acquired by France-based, global vegetable titan Bonduelle, Ready Pac Foods Chief Executive Officer Tony Sarsam joins me from his desk in Los Angeles, California, to dish on the company’s plans for growth, what tenets are driving the company forward, and how the recent acquisition provides more fuel for its fire.

“As we look to the rest of 2017 and beyond, we are accelerating our growth with four key macro-trends: health, convenience, value, and indulgence,” Tony shares with me. “Through an intense and dedicated focus on what is missing and needed in the market place, we found that these areas of distinction align with Ready Pac Foods’ vision for value-added offerings and fresh produce progress.”

"We are accelerating our growth with four key macro-trends: health, convenience, value, and indulgence" - Tony Sarsam

These four macro-trends have played a central role in defining Ready Pac Foods’ strategy and innovation over the last several years. In fact, they played an integral role in establishing the company’s mission–Giving People the Freedom to Eat Healthier. The company’s vision and signature strength help it further differentiate from competitors, giving Ready Pac Foods a true purpose and identity.

 

HEALTH, CONVENIENCE, VALUE, AND INDULGENCE

So, what exactly do these macro-trends communicate about Ready Pac Foods’ focus over the next five years? Are they fads for the short term, or points of differentiation that the company sees as long-term areas for increasing profitability for the company and their customers? I put these questions to Tony.

“The desire of consumers to have higher value, more complete eating experiences made us look at our evolution as a company and the need to reflect that desire,” he shares, adding that it was clear to the team that they all were more than a commodity chopped salad and produce company. “We shifted our strategy and focus as part of that evolution. We are a fresh food company. This opened up more options and possibilities for us to meet the needs of our consumers who want innovative fresh prepared meal and snacking options that are healthy, convenient, and accessible. These trends are not a fad, and we are not just looking for line extensions. We are focused on the macro-trends which is one major driver of our innovation.”

As consumers’ tastes change, Ready Pac Foods works hard to innovate and keep up with these trends—which is where convenience, healthy foods, and value come in. For indulgence, consumers are seeking bolder flavors within convenient fresh meal solutions, salads, and fresh-cut produce, Tony notes.

“Their demand for flavorful experiences doesn’t stop at the chip aisle. We continue to see consumers who are variety-seeking, looking for ethnic and regional flavors, as well as seasonal and limited-time offerings. We have worked hard to provide this,” he says.

In the end, it is about delivering a consumer experience that fulfills a consumer’s wants and needs, while also creating value for the retailer, foodservice partner, or online buying community. Trends help guide Ready Pac Foods to where the pulse of the consumer landscape is, or is going. The growth of fresh foods in the perimeter of the store continues, and fresh vegetables have been a focus.

“Over the past five years, there has been a significant increase in fresh food offerings as there is more and more consumer demand,” Tony tells me.

Additionally, there has been significant growth in fresh prepared foods, driven most recently by the expansion of added-value fruits and vegetables. Coupled with consumers looking for convenience in the foods they purchase, the demand for more prepared fresh food will just continue to grow. In fact, according to Nielsen, the prepared foods market is forecasted to grow at an annual pace of 4.5 percent through 2019.

“This all points to the fact that consumer expectations around convenient meal solutions will continue to grow,” Tony shares, “and we will continue to leverage our expertise and history in fresh to fulfill this need.”

2017 AND BEYOND

“As I mentioned before, we have a five-year plan that is designed for significant growth and it comes down to leveraging those macro-trend areas,” Tony shares, adding that currently the company’s fastest growing segment is the complete meal segment with it popular line the Bistro Bowl® opening the doorway for other such innovations.

There has been a lot of growth around the Bistro Bowl and the permutations that have since followed, including line extensions to the Bistro Bowl, different size portions, and flavor profiles.

“Looking ahead, we see our success dependent upon our efforts to get these items into locations and regions that are challenged by a lack of fresh options,” Tony mentions, noting that this means getting more alignment with quick-serve restaurants. “We believe we can help our customers find a way to get good fresh solutions for their consumers and not only fulfill the fresh need, but expand its presence.”

Ready Pac Foods is also looking to get its value-added fresh meals into more retailers that have struggled with these solutions as well, including dollar, drug, and convenience stores. These are all incredibly important key strategic places where Ready Pac Foods can play a very favorable role for consumers.

THE MAN AT THE HELM

Tony, who joined Ready Pac Foods in 2013, has led the company to significant growth and profitability through his focus on expanding and evolving fresh prepared meals and driving operational excellence. Strengthening the core of the organization around a mission of “giving people the freedom to eat healthier,” Tony has assembled an outstanding leadership team and a company set on a significant growth trajectory for the foreseeable future.

These strategies, and the know-how to execute Ready Pac Foods’ business model at such a highly effective level, did not just come to Tony overnight.

Bringing a vast repertoire of food industry knowledge managing world-class operations and driving innovative product development, across the U.S., Tony has much experience to draw from.

Before his tenure with Ready Pac Foods, Tony was President of the Nestlé USA Direct Store Delivery Company, which serves Nestlé’s frozen pizza and ice cream businesses and is one of the world’s largest frozen DSD sales organizations. Tony joined the company as Executive Vice President of Operations and Supply Chain in 2006, after Nestlé acquired Dreyer’s Ice Cream. He was responsible for manufacturing, procurement, and managing the supply chain. Tony later served as the Executive Vice President of Sales and Operations with responsibility for sales, manufacturing, and distribution.

Prior to joining Dreyer’s, before this leg of his journey, Tony called the Frito-Lay business home, where he was brought into the titan’s fold as an Associate Engineer before progressing through a series of significant leadership roles including Plant Manager, Director of Finance, and Region Vice President for Sales and Distribution in the West. He also led the development of Frito-Lay’s and PepsiCo’s overall Sales and Supply Chain strategy as Vice President of Go-to-Market Strategy.

So, what is it about these leadership roles that truly drives Tony?

“Over time, I got into a rhythm where I was managing increasingly-large ‘people organizations’ and learning how to take the people part of the equation and leverage that for greater success and results,” Tony says.

And that has been really thematic in Tony’s career: investing in the people—this is a phrase Tony uses a lot, and with incredible passion.

“One of the overarching stories from my early career was that I found myself in a lot of ‘turnaround’ types of situations, like with Frito or Nestlé back during their respective challenging times,” Tony says. “And I really focused on how to get the team aligned to solve their problems, and the risks that I typically took were about investing in people and in accountability systems.”

THE READY PAC FOODS DIFFERENCE

“When I came to Ready Pac Foods, the company was eager for a turnaround, from the company culture and the value it brought to employees, to its profitability and diversification,” Tony tells me. “Ready Pac Foods already had a great history of innovation with products like the Bistro Bowl and had assets and liabilities I could easily identify and work with. How could I not accept the challenge?”

So, Tony invested in the people. In order to do this, Tony knew the company needed to spend the money to make the turnaround happen, and he needed to define a sense of purpose that was bigger than just pay and incentive programs, bringing more tools to the staff teams, and offering education in the workplace.

As a result, the team created the Ready Pac Foods Difference, and its mission, Giving People the Freedom to Eat Healthier. This became the team’s motivating battle cry and informs how the company chooses to go to market, how they decide what regions and retailers to begin to expand their reach, and to what end Ready Pac Foods’ vision hoped to execute.

“We have now distinguished ourselves with a vision as a company with a signature strength around great innovation, and we are really committed to providing more healthy options and access,” Tony says. “From the last hands that touch the product before it ships out to our customers, up to senior leadership.”

When I say “team,” I mean team. Ready Pac Foods brought together approximately 300 of its associates that were given the opportunity to voice their opinions and think about what the words “Giving People the Freedom to Eat Healthier,” meant to them. And these areas of insight have helped fuel Ready Pac Foods’ company culture and how it goes to market.

Tony saw a true need to elevate the people who were integral in the company’s success and so set out to create more opportunities to recognize their successes, stories, and milestones. For example, setting up a company newsletter that has stories aboutthe associates that make the company thrive; new people that have been hired, employee anniversaries, babies…you name it.

Tony also conducts live “town hall meetings,” if you will, amongst many other employee initiatives, bringing employees together at each of the plants to discuss quarterly earnings, financial breakdowns on how the business is performing, and the goals for the company, as well as lots of recognition.

“If each employee is invested in Ready Pac Foods’ success and the vision then they will also feel ownership in that success and the great work that we do to get fresh meal solutions to consumers across North America,” he says. “We want to recognize our people on the front lines. We want to tell our employees, ‘you matter.’”

A NEW FAMILY: BONDUELLE’S ACQUISITION

“We had a number of energetic suitors,” Tony shares. “But, Bonduelle surfaced as an ideal company that Ready Pac Foods could align with because it was a team that was incredibly familiar with what we do, they have been in the food business for a long time, and have distinguished themselves as innovators in canned and frozen produce, with a very vibrant fresh produce business in Europe as well.”

As Bonduelle looked to globally expand in North America, Ready Pac Foods came into view. Similar values and goals further benefited the union and with a growth oriented philosophy, Bonduelle looked to be a better suitor than perhaps a private-equity ownership would be.

“I believe Bonduelle will be more expansive in their thinking about how investments are made in our business,” Tony notes, adding that Bonduelle’s acquisition of Ready Pac Foods will help fuel the growth of both entities in the fresh food space and will make the U.S. the largest country of operation for Bonduelle.

Ready Pac Foods will benefit from a greater level of investment in its growth, innovation, and global reach.

Another benefit is that there will be no changes to Ready Pac Foods’ senior leadership team, and Tony will remain at the helm as Chief Executive Officer, reporting directly to Christophe Bonduelle.

“This is a fantastic new chapter for our 3,500 associates and a great step forward,” Tony says.

And who is Bonduelle? Registered as Euronext: BON on the French stock market, this company is a world leader in healthy living through vegetables, with products across fresh, processed, canned, and frozen goods. While terms of the transaction have not yet been disclosed, it is expected to close by the end of March 2017 following routine regulatory reviews and approvals. Upon closing, Bonduelle, with more than $2 billion in revenue, will acquire 100 percent of the common stock of Ready Pac Foods, and plans to run the business as a whollyowned subsidiary, becoming its largest business unit.

With a new family to help put Ready Pac Foods’ foot on the gas pedal of innovation, growth, and expansion, the road ahead looks fresh for the taking.