Craig Carlson Cites Innovation, Collaboration and Plu Codes As Industry Drivers
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RETROSPECTIVE CRAIG CARLSON CITES INNOVATION, COLLABORATION AND PLU CODES AS INDUSTRY DRIVERS BY CAROL BAREUTHER ndependents ruled, communication meant than average, tried to have as many SKUs as department to really expand in number of telephone, and deals were sealed with possible and focused primarily on bulk. Still, SKUs. In turn, customers today want to eat I your word when Craig Carlson began the SKU count was only half what it is today. healthier, and they are looking for a large his career as a produce manager with Cub That’s because imports and organics were variety of great tasting produce. The ability Foods. That was 1978, when the Stillwater, few, seasonality dictated what was available, to offer this has enabled retailers to capture MN-headquartered retailer had only five stores and fresh-cuts were either a thought of the more customers and more shopping trips. compared to 77 today. Carlson worked in future or done at store level. This is all because of PLUs. produce even earlier as a stock boy, a position he held from high school through graduation How would you characterize the overall How would you describe the produce de- from the University of St. Thomas. His bach- retail environment back then? partment today compared to 30 years ago? elor’s degree in business prepared him for There were a lot more of the smaller inde- Then, the retail buying process involved an accounting career. However, Carlson took pendents. Big box stores were just starting to a combination of brokers, wholesalers and a Cub-offered produce manager job instead. ramp up. Retailers such as Wal-Mart, Costco, growers; now it’s a grower focus. Then, Over the next three-plus decades, he has held H-E-B, Meijer and Wegmans had yet to really produce buyers came up within the organi- positions such as vice president of produce expand. It was a time, though, that the impor- zation. They were usually a long-term asso- operations and merchandising for Penn Traffic; tance of produce was beginning to take root ciate who worked 10 to 15 years before vice president of produce and floral merchan- with the more innovative retailers. That meant moving into the buyer dising at Pathmark stores; and senior director mass displays, fixtures, signage and aggres- position. Now, they of produce for Wal-Mart. sive pricing and promotion. are people with In 2011, Carlson became senior vice pres- great knowl- ident and senior director of category manage- When did things start to change and edge but less ment and sourcing for produce at US Foods. what were the drivers of change? store experi- Two years later, he left to start Carlson Produce For me, it was when I got involved with ence. Then, Consulting, LLC, based in Chicago, of which the Produce Marketing Association. Everyone we talked on he is president and chief executive. A project at the conventions talked about how to move the phone that exemplifies his consulting work is the the industry forward. There was a framework, successful rebranding and repositioning of a collaborative environment. There was a ONE BANANA. For 15 of these years, Carlson push for retailers as a whole to get better held volunteer leadership positions with the and to work with the grower community to Produce for Better Health Foundation, Eastern accomplish this. Produce Council and Produce Marketing Association. What innovation has changed the produce industry over the past Where were you in 1985? 30 years? I was a produce buyer/merchandiser at Cub PLU codes. Before Foods in Columbus, OH. I did all the buying these, there was no way and merchandising for the new Columbus to compare an individual division when it opened. chain’s performance to its competitor or to the What was the produce department like industry as a whole. in 1985? Plus, PLUs gave us We were a trendsetter in produce. Many an ability to sell more departments then were located in the back than one item in each of stores, with limited SKUs and a lot of category. That has packaged options. At Cub Foods, we moved allowed every cate- Craig Carlson produce upfront, made it proportionally larger gory in the produce PRODUCE BUSINESS / NOVEMBER 2015 / 41 Retrospective CC.indd 1 10/13/15 9:57 AM when negotiating price and programs. Your hard to get the lift that generates the gross produce supply chain. There is a huge need for word was your bond and your signature that profit dollars to offset the reduction on retail growers to continually reposition and remarket signed the deal. price. However, today opportunity buys repre- themselves to remain relevant to retail. The Today, it is much more difficult to talk sent a huge potential for volume-oriented world is much different now than 30 years directly to buyers and most communication formats, and many independents continue ago, and growers need to be prepared for is by email. Then, it was all about driving gross to capitalize on this approach. where they will have to be in the next 10 years. profit dollars, gross margins were half what they are today. Then, the focus was on driving What led you to the consulting side of the What do you think was the greatest lessons sales and volume. We had opportunity buys industry? What insights have you gained on you learned about retailing over the past 30 where we’d grab the incremental volume at the consulting side that you wish you had years both as a retailer and as a consultant? a reduced price and pass the savings on to known as a retailer? I learned the power of communication the customers. I wanted to utilize my vast experience to between retailers and suppliers. It’s important With retail chain execution nowadays, it is build high performance programs within the to partner and communicate with your supplier. Every day the best customer gets the best produce. In that way, growers take care of the retailers they communicate best with. I live by the 24-hour rule; that is to answer all voice mail and email within 24 hours. What do you think will drive the produce industry in the next 10 to 20 years? Millennials. They want to know about their produce. Who grew it? Where was it grown? How was it grown? Suppliers need to tell their story. The avocado industry did this, and look where consumption of this fruit is today. Social media is an especially cost-effective means to do this, plus this form of communication resonates with Millennials. Today most compa- nies are checking the box by providing social media. In the future it will become an integral part of driving consumption. What are the challenges holding the in- dustry back? We are being out-marketed by snack and fast food companies. They have more adver- tising dollars and are way more sophisticated than us. As an industry, we need to do more to assure fresh produce will gain a greater share of stomach. What are your thoughts on choosing pro- duce as a career today? There’s a tremendous career opportunity in the produce industry today. This prospect lies in helping suppliers market and position themselves to Millennial customers in a cost effective way that drives consumption and performance. What advice would you give young retailers entering the produce industry? Spend time working in a store. Know what it’s like to work with customers from first-hand experience. If you’re working for a retail chain, ask for at least one month at store level to touch, feel and see how it operates. It will make a drastic difference in your career. pb 42 / NOVEMBER 2015 / PRODUCE BUSINESS Retrospective CC.indd 2 10/13/15 8:45 AM.