Executive Interview: Daymon Worldwide's Carla Cooper

A Store Brands Decisions' Exclusive

Carla Cooper and retirement are clearly at odds. After spending more than 37 years in management positions in the world’s leading consumer packaged goods companies, Cooper retired. Several months later she became the first female director named to Daymon Worldwide’s board of directors a year and a half ago. Today, she sits at the helm as the third CEO in Daymon’s 40-year history.

On the job for less than three months, Cooper is eagerly putting her brand building expertise to work for the private brands marketing services company. Interestingly, when Cooper served on the board she headed the search committee for the new CEO and even helped craft the profile of the ideal candidate. It was Milt Sender, founder and chairman of Daymon, who put the pieces together and realized that Cooper was perfect for the job.

Cooper began her career at Procter & Gamble where for 10 years she worked in the retail foods group and then on the institutional side of the business. Then she worked for Coca-Cola USA for 12 years, with seven-and-a -half in fountain and four-and-a-half leading Coke’s U.S. national account group at retail. But then an exciting opportunity came along at Kellogg’s -- she was offered an entire business unit to manage, which included Morningstar Farms, Eggo and Kashi.

“At that time I really wanted to be a general manager and manage a business totally,” Cooper said. “It was a very interesting and exciting stay at Kellogg’s. It made me a better functional sales and marketing person.”

After Kellogg’s, Cooper tried her first hand at retirement and failed. Last CPG stop: PepsiCo, where she spent five years as the head of the Quaker, Tropicana and Gatorade sales organization. She retired again after PepsiCo, but then Daymon came along.

In a an exclusive interview with Store Brands Decisions’ Editor Maureen Azzato, Cooper candidly outlined her first 100 days as Daymon’s CEO, and the challenges and opportunities she and her team plan to seize.

So, how long did it take for Milt Sender, the board and you to realize that you were the CEO they had long been searching for?

Not for one single second did I ever consider myself for the position. But as I interviewed recruiters to potentially help us with the search, we did talk about my profile versus what was going to be required for the next CEO. And lots of us talked about the similarities, but never did anybody say, nor did I say to myself, that the person would be me. But it was Milt who had that idea as he read the profile we had all drawn up. He called me from his home on a Sunday and said, “I think I know who this person is and I think you do too.” And I said, “Who?” And he said, “I think it’s you.” And I said, “No, no you’re wrong.” And 72 hours later I agreed. So that’s the story.
How did your tenure on the board prepare you for your current position as CEO?

Of course there is a big difference between sitting on a board as a director and taking the reins to run the business. I’m on other boards, too, and what I’ve learned over time is there’s a lot you don’t see that you do see when you start actually digging into the business. But it is a terrific opportunity to learn some things ahead of time. It allowed me to know the board in person and what they thought, and to get to know the top leadership, as well as our international folks. I also got to know the culture of the organization, which is huge. For anybody to have a leg up on that as you come in to run a business as the chief executive is a big plus. It gives you a head start.

When you were on the board, what opportunities did you see for Daymon?

I was just absolutely delighted to learn that a lot of the stuff that I had been doing over the past 30 years was applicable in a big way. When you devote your time to a board, what you want is to be able to contribute and add value. In this particular instance, I believe I was immediately able to add value and I got that feedback. I was able to participate immediately in the first meetings, because all that Daymon does as a business are the same things I’ve been doing for 30 years. It just happens to be that this is private brands and what I was doing before was national brands.

What do you see as the biggest opportunities facing the store brands industry in the future?

I don’t know if you’ve seen this white paper by AT Kearney called “The Private-Brand Conundrum,” which is written from the angle of national brands and what they need to do in the future to avoid the squeeze between the number one and number two brands in a category and private label coming with growth underneath (see chart below, courtesy of ATKearney). Essentially, it’s the middle tier brands that are going to be squeezed out. So the direct answer to your question is this is why I’m here. I love to follow growth because I love to build things. I’m so fortunate to be here at a first class company.

Tell us about your first few months on the job as CEO. What has been your priority?

Spencer Stuart, a search agency for executives, developed a workbook, which they personalized for me, on how to get a good start in your first 100 days as CEO. Since I started on Jan. 6, I have followed that plan to the letter. Generally speaking, it’s listen, learn, don’t isolate yourself with a few people and get out into as many places with as many of your constituents and your employees as possible, and learn for yourself what the business really is and how you’re doing. Then, as you draw near the end of your 100 days you begin to make sense of all the data and information and you develop a strategic agenda. And that does not mean the strategy of the company, because we have a strategy and we have goals and those have been done, and I agree with them. A strategic agenda identifies the five to 10 most pressing issues that you see affecting the company’s ability to do what it needs to do, what it wants to do. That becomes the work of the organization and the leadership team, which we kicked off last week. Once we get a handle on all this, we’ll match it up against our existing strategies and pressure test everything. We’ll ask ourselves, ‘Are these right and are these sufficient to get us to the goal?’ And if they’re not, then we have to change them.

What have been some of the surprises you have witnessed or heard as CEO versus your notions as a board member?

There’s one I would highlight, and that is the competency skills of the people that I have now met personally. From our design team, our marketing team, our innovation group, our IT and insights group, and our people in the field with our customers -- their competencies and skills are very high, and I am delighted. You experience the top levels of the organization as a board member, and its very good thing to see that competency goes all the way through the organization. If it didn’t, I would have to correct that, and correcting a talent gap puts a lot of length on your timeline.

Any surprises from your retailer and manufacturer customers?

At the heart of what I’ve been doing for 30 years is defining the value proposition of a product or a service and [communicating] the value to my constituents, and then galvanizing a team of people that face that constituency on how to penetrate that customer. I think the opportunity here is to take what we do in that regard with our customers to an even a higher level. Just for purposes of illustration (see “Trust Building” chart below), I’ve used this in the last three companies that I’ve been at and it’s based on actual data taken from a customer. It says you’ve really got to do great things with a partner, any partner -- a supplier, customer, spouse – and to do great things there has to be a deep amount of trust, and that trust has to be even deeper the higher you go or the more in-depth you get with the customer.

There are some things that happen when you’ve had a foundational relationship with a customer. You know a lot about what they do, you listen, you’re fair, you have a lot of integrity, you’re honest, you’re reliable and you’re responsive. To take that to the next level, called collaboration, you have to truly understand what the customer needs and wants. Do you link your values to my needs and create solutions that are customized? How creative and innovative are you and insightful about my business? And, I want you to share information with me. So I think we have a lot of this going on at Daymon. There is a higher level still, however, and I think some of our customers are asking for this alliance relationship. In certain places in our organization we have this, but I see an opportunity to take more of our relationships -- both on the supplier side and the retailer side -- to an even higher level.

How do you see the business world changing for retailers and suppliers in the store brands business?

What’s interesting about this growth of private brands is that the more powerful they become, the more retailers will experience what manufacturers have been dealing with for years. So what do you do when a brand gets so big that it could be a category? What do you do when it gets so big and gets some age on it that its core consumer is declining and you need to figure out how to get younger consumers into that particular brand franchise? Well, you have to evolve the brands. You have to reposition the brand. How do you do that without alienating your core? I’m not saying that private brands haven’t ever dealt with these issues, but as you grow some of those gnarly problems of brand building and brand health are going to arise. All of this means they’re going to have to be better brand managers and better product developers than ever before. There’s a variety of ways to do that, and I want to think that we can help.

Two years ago at the FMI Private Brands Summit you warned retailers that CPGs were going to get very aggressive to regain lost share. You said: \"Welcome to the war, and you are now the competition. National branded manufacturers are not going to just roll over and take it. They will fight back.\" Did CPGs do more or less than you expected?

After I made that comment the recession got worse and consumers gave private brands a terrific boost in trial and volume. The question was always how much of this can we hold onto in private brands and how much of it is going to pull back once the economy improves. Just like I said, the national brand manufacturers did not take that lightly and they pumped promotional money into the retailers for almost all of 2009 to try to stave off share loss and stabilize or even get share back. What we saw was the horns of the dilemma for the retailer who tried their very best not to take the money and to stay the course, but sometimes taking the money. And if you talk to retailers they’ll tell you, ‘Look, here’s when I took the money and shame on me, but I had to do it.’ So what happened is that some of those share gains flowed back. Looking at it from this side now, I wish we could have retained more of the volume and share that come from consumer trial. But do I blame the retailers for what they did? No, because I think there’s this shift in how you manage your P&L, from a history of having mostly national brands in the store and the dollars that accompany them. to a greater balance of national and private brands in the store. How to manage the implications of this shift and its impact to a P&L is a challenge for retailers.