Big food in the age of the entrepreneur

by Josh Sosland
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G.M.A. panel explores challenges of agility among large consumer products companies.
 

WHITE SULPHUR SPRINGS, W.V. — “Are big and entrepreneurial opposite and irreconcilable forces?”

That was the question posed to a panel mostly of entrepreneurs at the 2017 G.M.A. Leadership Forum held Sept. 7-10 at The Greenbrier in White Sulphur Springs, W.V.

Mark Payne, Fahrenheit212
Mark Payne, founder and president of Fahrenheit 212

The panel, “Growth through innovation…can scale be an advantage?” was moderated by Mark Payne, founder and president of Fahrenheit 212, New York.

The panelists included Eric Graves, president of North American commercial operations of Elanco, an animal health division of Eli Lilly and Company. The only panelist currently working at a major corporation, Mr. Graves responded with a viewed shared by other panelists.

Eric Graves, Elanco
Eric Graves, president of North American commercial operations of Elanco

“We don’t look at size as a disadvantage at all,” he said. “We don’t think it’s about size. It’s about mindset.”

Still, in discussing one aspect of mindset, Mr. Graves exposed a gulf that may exist within the consumer packaged foods community today. He took a hard line in a discussion about widespread practices he said stand in the way of greater transparency.

“Probably one of our greatest vulnerabilities is those who don’t follow the path of claims grounded in truth or science,” Mr. Graves said. “You might say, ‘No, we would never do that!’ Well there are some huge examples of those happening right now in the form of absence claims or clean labeling. These things are very, very dangerous. I don’t want to sound overly dramatic, but when those kinds of things are going on, it oftentimes creates the perception of a benefit that doesn’t exist. No G.M.O.s, cage free, hormones, no antibiotics, inherently you are trying to create this perception of better health. And in fact there is no data to support that.”

Elanco
Elanco is an animal health division of Eli Lilly and Company.
 

He intimated that claims not grounded in science may sometimes undermine products of companies like Elanco that spend years and tens of millions of dollars to develop and bring a product to market.

“Science is on our side,” he said. “Sometimes science isn’t on our side, and we have to kill a product. But it’s a challenge dealing with emotion and soundbites and tweets that aren’t always grounded in science.”

Craig Dubitsky, Hello
Craig Dubitsky, founder of Hello

Craig Dubitsky, founder of Hello, a maker of toothpaste and other oral health products, said success in consumer products requires more than just sound science.

“You have to compete on the emotional level,” he said. ”The word will spread whether it’s right or wrong. Whether emotions support it. Whether science supports it. That’s really not for us to decide. We can be informed by both science and emotion and hopefully get to a better place. Our products have science. They work, but we’re playing to other things as well. They need to play together. I think that’s the new model.

“I’m saying that as someone who wants to make the world filled with better things. The (large consumer packaged goods) companies do amazing things. They support people and families and research and education. That’s awesome. So, what can we do together?

“You can’t outsource soul. You have to find a way to bridge the gap.”

Hello
Hello makes toothpaste and other oral health products.
 

That large companies are unable to compete when it comes to innovation is a fallacy, Mr. Dubitsky said. Still, it appears management layers and legacy may be impediments. He sees a future with a more positively interactive innovation environment.

“I think there should be a symbiotic relationship,” he said. “It shouldn’t just be around M.&A. I don’t think we’ve seen that yet.  I think that’s the next innovation. It’s how do intrapreneurs work? How do entrepreneurs work?”

Annette Domnik, Zarbee's Naturals
Annette Domnik, c.m.o. of Zarbee’s Naturals

Highlighting commonalities that drive intrapreneurship and entrepreneurship was Annette Domnik, chief marketing officer of Zarbee’s Naturals, a maker of natural lozenges, vitamins and immune support products. Many successful innovations have emanated from large companies, and Ms. Domnik said prior to joining Zarbee’s she had worked on the Procter & Gamble Co. team that developed and introduced the Oral B plaque remover, the first electric toothbrush oscillator.

“What I have seen in respect to commonality of culture are two things,” she said. “One is absolute ownership of the team. There are still pockets in large cultures where the concept of ‘don’t rock the boat, I’m here to advance my career, but I don’t want to be controversial,’ still exist. When you are putting together an intrapreneurial team, that complete ownership and honesty — what is the consumer really interested in? — is absolutely critical.

“The second thing, from a cultural perspective, is the need to incubate and not merely to validate through stage gate testing a really big idea. You need to test, learn, fail cheaply and quickly and really have the spirit of incubation. Don’t wait until everything is perfect before you interact with the world, with your consumers who are going to make or break you.”

Zarbee's Naturals
Zarbee’s Naturals makes natural lozenges, vitamins and immune support products.
 

Organizationally, Ms. Domnik said what is most important is putting together effective small, cross-functional teams that don’t have silos.

“I think in large organizations there are still instances where silos need to be broken down significantly,” she said. “If you can get small cross-functional teams that can work well together and know the organization well enough where they know where to leverage the scale but still truly have ownership of the project, that’s where the magic happens where you develop products not only with functional benefits for consumers but products with emotional connection. We were those intrapreneurs. We were those serial disruptors. Success is not a function of size. It is a function of mindset.”

Joshua Sigel, Innit
Joshua Sigel, c.o.o. of Innit

Joshua C. Sigel, chief operating officer of Innit, said habits are difficult to break within corporate cultures. Based in Redwood City, Calif., Innit is an eating technology company focused on connecting the consumer “with the ritual from how one decides what they’re going to eat every day to how they are going to cook that food and everything in between,” he said. The early stage business involves partnerships between food manufacturers, appliance makers, retailers and health professionals.

Discussing corporate culture, Mr. Sigel described a recent meeting with a large potential corporate partner that seemed to be going well.

“There was very senior management in the room,” he said. “They talked about agility, and ‘We want to leverage your process. We want to emulate how you work as a start-up.’ And then right away we got pulled back into, ‘Then it’s going to have to go to this department, and we’re going to need approval. Then we need to go here.’ The c.e.o. of the company stopped everybody and said, ‘You know what? Send them the logo.’ What he meant was get out of the way. What they are doing is what we want. Let’s not involve ourselves for the sake of involving ourselves.

Innit
Innit is an eating technology company focused on connecting the consumer “with the ritual from how one decides what they’re going to eat every day to how they are going to cook that food and everything in between."
 

“Sometimes it’s knowing when to get out of the way.” 

Companies large and small benefit from a changed mindset among retail buyers, the gatekeepers who decide what products will be offered on supermarket shelves, Mr. Dubitsky said.

“It used to be as a buyer, the big dilemma was in saying yes, because there was too much risk,” he said. “Now it has turned quite a bit, and the bigger risk is not taking something that seems to have a millennial bent or a bias toward a more natural proposition. The bigger risk is not to have it.” 
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