COLORADO SPRINGS — On the final day of the G.M.A. Leadership Forum, the leaders of The Hershey Co., Frito-Lay North America and Colgate participated in a wide ranging panel discussion about the issues that concern them. Subjects they didn’t talk about included clean label or millennials. The focus of the afternoon panel discussion was on key issues of concern to those in the c-suite, including activist investors, cost reduction, big data, and Amazon’s impact on the consumer packaged goods industry.
|Thomas Greco, c.e.o. of Frito-Lay North America.|
Thomas Greco, chief executive officer of Frito-Lay North America, a business unit of PepsiCo, Inc., said the emphasis of activist investors largely has been on reducing costs.
“The single comment I would make is sustainable growth is hard,” he said. “As we are taking out costs we have to look for the benefits as well.
“At Frito-Lay we are embarking on a journey to remove distribution centers from our system. If we can ship directly from a manufacturing plant to a store, that is to our advantage. As we reduce costs we are also widening our capability.”
J.P. Bilbrey, chairman, president and c.e.o., of The Hershey Co., Hershey, Pa., said much of the focus has been on the negative aspects of activist investors and argued there is a positive side to it.
|J.P. Bilbrey, chairman, president and c.e.o., of The Hershey Co.|
“Five years ago I had people yelling at me about cocoa,” he said. “It stimulated me to listen and see what was happening. The end result is it was quite positive and led to the creation of an industry initiative around cocoa. That is one side of activism and I really think it is where activists have created a positive environment that makes us as an industry take a look at ourselves.”
Mr. Bilbrey noted that The Hershey Co. has shifted its strategy to data-driven insights and addressed how companies may address the issue of working with “big data.”
“When it came time to talk about big data I felt it was ill defined,” he said. “On some level it is only big if you wonder what to do with it. You have to decide how to create scale, leverage and win. We said, ‘let’s orient ourselves around digital and competing in that world.’ It put us on a journey that made us think about our business differently.”
As a result of The Hershey Co.’s shift in strategy, Mr. Bilbrey said the company now has “a lot more focus on where we are headed and what is happening with consumers.”
Many of the sessions at the G.M.A. Leadership Forum focused on e-commerce and e-tailers and the effect those businesses are having on C.P.G. In many sessions the focus often turned to the impact of Amazon, and it was no different in the c.e.o. session.
|P. Justin Skala, president of Colgate North America.|
“Let me put Amazon into context,” said P. Justin Skala, president of Colgate North America, New York. “Our companies are in the business of building brands. Therefore I view Amazon always through the lens of how is my core consumer going to be shopping differently related to the brand. Are we tweaking the model to take advantage of that?
“It can be an enormous opportunity, but it can also be a huge distraction. If you allow the noise of the channel to distract you, you can get lost. We need to focus on brand building. All of these things are coming with great speed, but at the end of the day brand building is brand building. They (such businesses as Amazon) should be viewed as an enabler for that.”