Learnings from the Front Lines in Dramatically Changing Retail Times | Podcast EP28
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In this episode:
Wendy Liebmann talks with Anne Fink, president of global foodservice at PepsiCo about how she, her team and her food service community responded when the industry shut down overnight -- and how together they have reinvented their business model for these changing times.
- The importance of taking care of all constituents – employees, customers, consumers, and communities
- Staying true to your corporate purpose
- How to build community engagement during times of great upheaval, and in so doing build longer-term brand trust
- The importance of continuous innovation and how it enables companies to respond quickly in disruptive times
- Trends that will drive retail growth, from “home as hub”, to making shoppers’ lives easier, to delivering heightened, meaningful experiences in stores
Don’t miss upcoming episodes, stay up-to-date by visiting the WSL Shopper Insights Library, or our Podcast page.
Hello, my name is Wendy Liebmann. I'm the CEO and chief shopper of WSL Strategic Retail, and this is Future Shop. This is where I talk to innovators and disruptors about the future of retail. My guest today is Anne Fink. She is the president of Global Food Service and PepsiCo, she leads every aspect of that business for PepsiCo, North American and global foodservice from sales, marketing strategy operations, everything which includes restaurants, hotels, business and industry, universities and colleges and sports and entertainment channels. Think about that when you think about March 12 2020, when the world shut down. But before we get to that, when I first met, and she was Senior Vice President and Chief Customer Officer for PepsiCo sales, she led all the strategic customer management across all the channels in the US. And as a result, she has an incredibly unique and valuable point of view of the state and future of retail from the frontlines backwards. And that's what we're going to talk about today, learning from the frontlines in dramatically changing retail times. So Hello, Miss Anne, welcome.
Hello, Wendy. I'm just delighted to be here with you. I always find conversations with you. Enlightening. So I may have to throw a few questions your way as well,
as you want my dear. I must say I've thought about you a lot as this pandemic unfolded. And I thought about all the areas you do business in, and the impact on everything from restaurants and airlines and schools and offices and more, can you describe what some of those first days were like for you.
Absolutely. Wendy, you know, on the one hand, I think all of us are kind of ready to move on, and not keep talking about the COVID situation and what happened. But on the other hand, I do think it is absolutely important to reflect, to learn as we move on. And we've done a lot of that on my team in our organization. And, and I think it's really helpful. So as we think about what was happening with a pandemic, clearly it was a crisis for everyone in so many different ways. And when I think about what got us through that, there's a couple of things that really stand out. The first is having an infrastructure of a very strong team going into that pandemic. And then the second is having very clear values as a team and as an organization. And both of those things just served us so well. So you know, I would say, strong teams, we all know, we needed to move fast, we needed to make quick decisions, with limited information. And having a team that you could look at in know and know that you trusted each other allowed for that speed and agility that was so necessary. So every day and we were together, via Zoom every day, I just felt grateful for them. And that we were able to just go make decisions, and do the right thing for many constituents,
I think about the complexity of your business, and that you and I often sat back and had lunch at round your desk, and talk about the wonders of the changing retail world. And I think about the changes that are already moving forward, and the complexity of your world in food service. And that struck me is all that work you've done in retail over the years traditional retail and the changes that were going on there from e-commerce to small formats and everything in between that in many ways that probably put you and your team in good stead not for a pandemic but for the shifting landscape that you are starting to see very quickly.
Yeah, absolutely. I mean, we're always having to think about the changing consumer, operators, retailers, foodservice operators. And so that's part of our DNA is to deal with change and think about the future and what we need to do to adapt. But as we all know, that was in overdrive in starting in March of last year, but we were well trained, I think and ready to go as much as we could have been in such a dire situation. But I think one of the things that did serve us well are these just clear priorities, we said, we're first and foremost, we're going to take care of our people, we're going to take care of our customers. And we're going to focus on these communities that are hurting and taking care of our people. Our people were really looking to us as leaders to know how to feel. And that's why it was so important to communicate excessively. It was really important to look people in the eyes via Zoom, and to tell them everything was going to be okay, what the plan was, how we were operating, and really listening to them and caring for them as people and acknowledging that there's craziness in their personal lives as well as their business lives. So that was kind of the overarching first and foremost, the next part regarding our customers. So you mentioned in your opening the different channels of business that you know, are contained within food service. So think about restaurants and hospitalities, and stadiums, everything you have schools, offices, everything that involves being away from home, and overnight, people were sent home. So these businesses were shut down. And to say our customers were suffering is just an understatement. The biggest question liquidity, will I survive? Am I going to get to the day that I'm financially capable of reopening? Will my employees be? Okay, so many questions. So our priority was to communicate with them, we certainly didn't have the answers. But we were on the other end of the phone, the other end of the Zoom screen, telling them, we're here for them, and then we'll figure it out together. So that was just super important. Just being as empathetic with our people, as we were with our customers.
I was for a variety of reasons in the hospital, in the early stages, that I thought, Oh, the comfort of seeing the Pepsi lined up, and the Tropicana lined up and thinking, Oh, okay, these frontline workers still have access to what they need, even though they're living in this crazy system. So it was really interesting to me as both consumer and expert in retail, to think about all of those touch points that you have in your role, and the power of brands to provide comfort.
Absolutely. No, I think it's a good observation. And you mentioned hospitals, that became a big priority for us. And that was part of our kind of third pillar of support our communities. And if you look at in the communities, hospital workers, health care workers were absolutely suffering, and simple things like making sure that we were bringing our products and giving a little extra for the health care workers. And we did a lot of that care packages, and anything that could bring them a little bit of relief in a very hectic time. So that became a big priority for us as well.
As we move through this, how have your shoppers changed? How do they want to now engage? Do they want to engage differently, whether it's in restaurants or when they're on planes? Or, you know, in all the other places you deliver your products? How are you seeing that as different? Or are they just so happy to have the doors open and back to normal-ish?
Well, I will say they are so happy to have the doors open. We kept talking about while the shutdown was still occurring. We talked about the fact that there was so much pent-up demand, think about your own life, like Weren't you dying to get out of your apartment, go to a restaurant be out and about back to normal? And we knew that once the restrictions were lifted, that we would see this pent-up demand play out and that has exactly what has happened. So the restrictions get lifted, consumers are out. Restaurants are absolutely buzzing again. Hard to get reservations. You've probably seen that. People wanted to go to professional sports. If you looked at you know Major League Baseball, all 30 stadiums were operating at full capacity. Whether you went in person or saw it on TV people were out we're seeing that now with NFL Games, NBA, etc, people are going to the movie theaters. You know, at one point, they were saying, will people ever go to movies again. And absolutely, so this notion of pent-up demand has absolutely played out. And what we're actually seeing are some consumer behaviors that you know, are have really become sticky as a result of the pandemic. One is this notion of the home as hub. So, even while people were ready to get out, these new behaviors had been established in the home was the headquarters. So that was where everything emanated from there. And we're seeing that continue. And we also see it continue as you think about the elevated demand in retail. So at one point, we thought, hey, when all of these away from home segments open up, maybe the accelerated demand in retail will temper. And that's not necessarily happening yet, which is so interesting. So people are still going to grocery stores, going to retail establishments, buying a lot, we're seeing, you know, sales are very strong within retail, bringing things home, the home is hub, but at the same time, getting out into these away from home locations, and spending money, having great experiences. So it's really a unique point in time from a consumer perspective. And I think it's driven consumers have had more money in their pockets, pent up demand, but still kind of cultivating this home as hub lifestyle. So that's been a very interesting trend.
I do remember us sitting over lunch one day talking about the impact of e-commerce and shipping big bottles of water and soda and all of those things. But now we've also seen personal shopping, the Instacart, the door dashes all that home delivery of which you are part of I guess, how has that opened opportunity for you or sort of change the way you've been thinking about the ways of delivery of your products and services?
Yeah, what we're seeing with consumers is, overall, they want solutions that make their lives easier. And the digitally enabled solutions have absolutely facilitated that. And accelerated that during COVID, as we've all seen, so as you look at E commerce in general, it has been permanently accelerated. And I'd say there's probably no sign of slowing down just because consumers have realized that that can make their lives easier. On the foodservice front, we're definitely witnessing an E revolution with on premise. So everything's enabled by online ordering so they can get their drive through their carry out curbside pickup delivery, again, on their terms. So we saw that massively accelerate. And that will continue. That's behavior that has made their lives easier. And then really interesting things have emerged, ghost kitchens. So these concepts without a front door almost overnight, we partnered with one of our customers and created something we called Cosmic Wings. So we created a restaurant concept with them. And it was a virtual dining concept, we used our Cheetos brand to deliver a really fun consumer experience. And the consumer was ready for that because the digital enabling had already happened. And they knew how to do it, they knew how to engage in order to make that a big success.
I think about Pepsi as a brand that was on the leading edge with its target shoppers around digital engagement activities, events, immersion into the brand. It seemed to me like you were able to use so many of the tools you already had to really create some excitement at a time when people were eager for a little fun and happiness.
Absolutely. And I'm glad we had them working on a lot of those tools because they had to be ready to go during the pandemic because the consumer was ready for those so great time for some experimentation
Through this pandemic, beyond the health issues, we obviously had economic and, and heightened social issues. Can you talk a bit about that, and how the evolving PepsiCo mission and values has come to play over the last 18 months.
So, you know, we've talked about our vision, being winning with purpose. And there's nothing like a crisis to really elevate that and make it real and beyond words, and this notion of purpose, who in taking care of our people, customers and communities purpose was really at the center of all of that. So think about middle of 2020 business shutdown, our employees thinking, Well, I have a job, is our business ever going to come back? What does this look like? You know, we made the decision that we would lean into our purpose agendas, so many people needed help, and we were in a position to help. So one example is the restaurant industry. Think about all of the restaurant millions of restaurant employees who were furloughed, or let go overnight, out of work. And we were able to partner with Guy Fieri, who, you know, you're probably familiar with guy who wanted to put a program together to provide relief to restaurant workers. And ultimately, it was called the Restaurant Employee Relief Fund. We were the first partner to jump in PepsiCo was with him, we got the National Restaurant Association involved. And over time together, we were able to raise $21 million, actually over $21 million, all to go to grants to restaurant employees. So my team felt so proud of that, right, our marketers kind of went on overdrive with great fun ideas on how to bring that to life, we brought in professional athletes to help amplify the message. And that's just one of many examples where we were able to use the resources of our company and the passion and purpose behind our employees to do something meaningful. What I would say is where we really kicked in, is during the horrible time of the George Floyd killing, and immediately, we knew that we wanted to in needed to do something meaningful. We needed to do something meaningful for our employees for communities. And it probably just a week's time, it was rapid speed. We made a massive, massive financial commitment to the black community. For my team that meant a commitment to black owned restaurants. And we established a program called Pepsi Dig In, and it was solely set up to help black owned restaurants with the skills that they may need with some financial resources that they may need in a lot of amplification.
So Marcus Samuelsson supporting part of that. Now,
Saturday was Pepsi Dig In day, that was all about getting people to support black owned restaurants. I went to Marcus Samuelson's restaurant in Harlem, Red Rooster with a group of associates and that's where I celebrated Dig In day, but we had employees all over the country, rallying behind that with great purpose. So that's been just one of the beautiful silver linings through this whole experience is that our purpose agenda became so real, so genuine, and was activated in a way that was just extremely meaningful to so many constituents.
We just finished off some of us, you're familiar with our How America Shops® research, and we called it The New Shopper Truths. And one of the things that became really clear to us was this new set of values or to your point, heightened set of values that people have and their expectations, not just of big companies or smaller, sort of slap a promotion somewhere, but actually to show up and engage in ways that are really meaningful. So hold that thought. Before I go back to my conversation with Anne about her experiences from frontline retail. I just wanted to remind you, as I always do, to visit our website WSLstrategicretail.com to access our latest How America Shops® research, including the study I mentioned, called The New Shopper Truths, that's got critical learnings about what shoppers expect from you now, so pay attention to that one. And also a quick reminder on December 15. We're running a new virtual Retail Safari® that focuses on re-envisioning store in a digital world, so sign up for that one too, but not before you listen to the rest of my conversation with Anne.
you talk about constituents, you know, sometimes you think it's for your consumer, for your customer, and it always is, but what you find is what we're focused on, is so meaningful to our employees Because then ultimately, they want to work for our company, they're proud to work for our company. And then they amplify the message, you know, of what we're doing. And they make it bigger and broader and much greater. I think the area of sustainability is a great example of that. You think about the purpose agenda. And you know, in different parts of the business sustainability, it's more pressing than in others within foodservice for instance, I always say it's the tip of the spear think about college campuses and students, you know, demanding sustainable solutions. Think about offices in business and industry and employees saying, you know, I want less plastic, I want sustainable solutions. So we found it absolutely necessary to find those solutions in those channels. And then if you look in retail channels, talk to any CEO or leader in any of the major retailers, it is a top top agenda. So these expectations, I always say it kind of emanates from the employees first, but then, you know, so many other constituents are expecting solutions. So PepsiCo, I feel like we're in the forefront of this. And our CEO, Ramon Laguarta, has made it his personal passion, and has been really taking a leadership role. And we've recently unveiled something called PepsiCo Positive. And it's a strategic end to end transformation where we're holistically looking at, really our entire value chain, from how we make sell our products, all in a more sustainable way. And the reaction to that first from our employees, but certainly from our customers and consumers has just been wonderful. But we know it's a long journey. And that's why we have many multi year commitments. But we're absolutely serious about that.
Yeah, it's interesting, you say that, too, because that's the other thing that resonated in this work we did. We began with some qualitative work to listen. And then we went off and did a big national survey. But in the qualitative work, what resonated so much with me initially was listening to people say, Listen, as individuals, we can only do so much. And if big companies and organizations don't step up, then we're not going to be able to solve these problems. And so that's been something that we've seen, while people talked about that before the pandemic, and it was important now, this sort of recognition of Okay, everyone, you want us to buy your products and services. Now, you have to help us in a more demonstrable way. And it is a journey, you know, and that openness and honesty to tell shoppers, customers, where you're headed on that journey seems to be the other thing that we're hearing from shoppers, that's so important. Now,
I think there's a strong reason to believe at this particular time, to your point, corporations are in right. And I think that was one of the last frontier is in terms of really making this not necessarily about just government programs, or just a consumer, you know, emphasis when corporations step up and say, This is important, this is good for business, and good for people, and we're actually taking it seriously and going to do something about it, then you know, it's a real turning point. And I think we can make meaningful progress as a society
as I step back because I was thinking as you were saying that about some of the retailers that you and I have worked with together you have this unique view because you've been on both sides of this selling fence. And as you think about retail, your previous world and you look around as I said, I remember you and I sitting with a piece of paper at your round table having our lunch and mapping out where the opportunities were coming on a grid and what that meant for small formats or new ecommerce and things emerging like that. But it's now you look at it from this vantage point. What do you see is the one or two three things that traditional retail needs to think about moving forward.
Here we did we figured out a lot in those little roundtable luncheons didn't we Wendy. One of the areas that I think will be so important for retail going forward but also for foodservice. So for anyone serving consumers essentially, is delivering on this notion of elevated experiences. So if you think about what happened in the pandemic, people got pretty comfortable, they'd sit on their couch or at their kitchen table. And they could kind of take care of everything, anything they wanted, they could, with their phone, essentially have show up. So if people are going to get off their couches and leave their kitchen tables, they want something special, the expectation is greater. So that may mean if they go to a grocery store, well, how does that become a little more experiential, something that gets them in their car, pull into the parking lot go into the store, they're looking for something less transactional, and a little more inspiring. So that could be the assortment, the way the assortment is delivered. surprise and delight offerings. But I think many retailers have understood that for a while, like that was a trend pre pandemic, but it has been absolutely accelerated. And retailers want people to come into their stores, they want it all they want the E commerce they want, click and collect, but they want people in their stores making impulse buys and feeling some loyalty to that experience. So same thing that we're seeing in foodservice restaurants, they need an environment unique experiences. When they go to a movie, it has to be better than watching Netflix at home, there needs to be some, whether it's the food, the beverage, the 3D experience. So the stakes are a lot higher in terms of what consumers are expecting. And I'm seeing both retailers and operators within food service, recognizing that and finding unique and interesting ways to deliver on that.
Yeah, I was struck by what you just said, when I was flying again, for the first time on some business trips recently just existed in a lot of the new airline terminals and things that have been developing, obviously, pre pandemic, but it just hit me again, because I haven't been there for a year, just looking at the food service and the offerings in the airports as they opened up whether I was in here in New York, or in Chicago and Seattle, and you just looked at the breadth of offer and the breadth of brands and, and it was you know, it's so extraordinary. And everybody sits there with their screen ordering off their screen, right and things come and, you know, as simple as the food of the planes have become the exuberance of the experience at the airport is just stunning,
right? And people are spending more. That's what's been very interesting. I talked to some of the people who run concessions business for all the sports organizations, or in movie theaters and the average check per consumer has been absolutely elevated and back to I want a special experience, I'm going to order that extra special item on the menu that's going to make me feel comfortable and enjoy this experience more. So that has been a really interesting development as of late as well.
I think about some of the retailers that we've been looking at in the US and around the world and visiting now. Hy-Vee just opened an extraordinary new store in Iowa. There's some of the regional grocery people are doing really wonderful things I think about Ulta and Target. I think about new things that Wegmans are doing or Kroger is doing and this passion for engaging again with shoppers in as you say very meaningful ways really stands out now.
And if you look at Hy-Vee has done some amazing things Wegmans as well, both of those retailers, were on that path pre COVID. Fortunately, you know, for them. So now as consumers are back in their stores, they're able to deliver on that demand for elevated experiences, which positions them very well.
And I know drugstores are close to your heart and mine. So I won't quite put you on the spot. But it feels like that. So space now, even though health and wellness is clearly a forefront of many Americans thinking for many different reasons. Now, that whole focus around health, not just the convenience store on the corner, there seems to be quite a bit of work to be done.
I think it's an excellent point. But back to if you take you know, CVS, CVS Health, they have been on this path, pre pandemic and nothing like a pandemic to really establish them as a health hub. So as I was getting my vaccine at a CVS, it was really interesting to acknowledge that they've delivered on that expectation that there are a health hub for the community. But at the same time, I was able to go and do my errands and pick up all of the the things that I needed and get a Pepsi and bag of Stacy's Pita Chips as well. So, again, it's this theme of, I think retailers and operators who were on a path, pre pandemic, everything has been accelerated. And so the payoff is now, which is great to say,
is you think about your journey, I assume. Now on occasion, you can take a deep breath, and your hair's not constantly on fire, what are the two or three things that you're focused on? Now,
you know what I'd say, Wendy, just back to where I started the beginning of our conversation, a lot of it is about the basics. And in terms of having your priorities in order, and for me, that is supporting our people, our customers and our communities. And I know if we do that really well, we will have a thriving, wonderful business. And we do have to acknowledge what we've learned about ourselves, and about the business during the pandemic, and keep the things that have been really good. So as it relates to people, it's absolutely necessary to up the empathy level and do it in a real way we have to listen to our people understand our people, they can go work in other places, easily the market’s amazing. So we can't take them for granted, that will be increasingly important. And we've learned a lot about that over the last year and a half. In terms of our customers, when you go through a crisis together, it just has a way of building bonds, and you do become stronger, and those bonds become stronger. And there were some bad times and tough times and difficult conversations. But I’ve always said to my team, if we do the right thing for our customers, during this time, they will never forget. And it will strengthen our relationships forever. And then thirdly, we're in every community in America, PepsiCo, our brands are people, that's very special, we've learned that we can have a very big impact, certainly with the big power of PepsiCo, our resources, but with every one of our employees and their personal passions, and really engaging in the community, understanding what the needs of the community are, and then allowing people to engage. So for me, those are three, you know, massive areas of focus. I've learned a lot as a leader. And I'm grateful for those learnings. And I think if we keep focusing on those areas, where you will have this massively successful business long into the future, which feels really special,
I can't thank you enough for this. First of all, it's wonderful excuse to see you even though it's virtual, but I know we can get together in person soon for a Pepsi or glass of wine or something fabulous. Somewhere that would be wonderful even to sit around your desk with our cafeteria salad would be just fine. I marveled that you're not only grace, but your ability to build your community and support around the initiatives you've been doing. So I am glad to call your colleague and friend because you've done some great work over the last year and a half. So congratulations on all of that.
Wendy, thank you. I feel the same way. The next time, I'm going to interview you because I love to pick your brain. You know so much about the consumer, the retailer trends, what's happening in the world, and I treasure our friendship. So thank you for spending the time with me today.
So here's the thing. What resonated with me during my conversation with Anne was her comment that it was actually is critical to take care of all your constituents every day, employees, customers and consumers every day. But especially in challenging times. That's even more important. She also noted that externally, for consumers, their home is still a hub, even as the world opens up, and there's great opportunity if we support them there today and not just assume that they're ready to run outside the door and move on to other things. She also said we need to recognize that shoppers want to make their lives easier. Now you won't get the argument from us on that. You've heard that from us many many times. But easier has many dimensions. It's not only having product delivered to the door with a click of a finger it's the packaging is that easy to read, it's the product isn't easy to use. It's the merchandise offering, can I find what I want? It's also the store layout. How easy is it for me to get into and out of the store the way I want, in fact, easy is in everything, which leads me to Anne's recognition that retailers need to create heightened special experiences now to inspire and excite people to get off their couches to come to the store in the first place. And last Anne talked about supporting communities in ways that build loyalty to brands, and encourage people that work for you to feel proud of where they work, and live. So that's the thing. Oh, and one more, don't forget December 15. Join us as we take you around the world to show you how best in class retailers are doing all those things by the way, in real time. See you in the future.