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Tesco Intelligence Report: Slow Start

The prospect of a major new buyer, especially one operating a major new format, has interested the trade and, as a result, we have run many pieces on Tesco’s efforts to establish a beachhead in America.

Tesco announced its holiday sales in the U.K. recently. For the most part, the take was negative as Tesco had projected growth of around 4% in same-store sales in its core U.K. market for the holiday season but only achieved a 3.1% increase — although the company had exceeded expectations on its non-U.K. business as well as on sales of non-food items in the U.K.

The new Fresh & Easy division in the U.S. is too small and too new to break out separate financial results, though Finance and Strategy Director Andrew Higginson used the words “very encouraging” to characterize consumer response to the concept and, in reference to Wal-Mart’s new efforts to experiment with a smaller format, pointed out that “Imitation is the sincerest form of flattery.”

Here at the Pundit, though, we have our own unique intelligence network, and what happens is that virtually every day we receive calls and e-mails from around the industry on topics of current concern. Tesco being of great industry concern, we receive a lot of messages regarding Tesco. In fact, we are well in excess of 200 comments, most saying nothing more than that a given industry member — a wholesaler, a grower-shipper, a broker, a consultant, another retailer — was just in a Fresh & Easy and was reporting his or her perceptions.

The vast majority of these comments contain a line similar to this: “It may just be the time of day or day of the week or perhaps just this particular store — but, there were practically no customers in the store.”

One comment, two comments, ten comments — and it could be the time of the day, the day of the week or the particular store. But so many reports, from many stores on every day of the week and from a diverse mix of times of day, seem likely to indicate that sales are not strong.

Several suppliers have also told us that orders are well below their expectations and at least some primary suppliers have thought the business not worth the trouble and stepped back into secondary supplier roles.

Although Fresh & Easy has signed on to open stores in San Francisco and Oakland, and plans are proceeding to open a Northern California distribution center in Stockton — all evidence that Tesco is dead serious that this is “…a launch and not a trial…” — it also speaks to the fact that Tesco has yet to prove the viability of the Fresh & Easy concept.

We would expect some major revamps to the concept in the months ahead. The commitment has been substantial, so Tesco will go to great extremes to juggle the variables and get the offer right. But there is no assurance that this size footprint is viable.

You have to tip your hat to the courage of the Tesco executives who decided to launch without a trial. In America, we call that kind of gutsy move a “brilliant or bankrupt” strategy. A lot of suppliers are counting on Tesco’s executives to be brilliant.

Wal-Mart Sheds Another Tradition: Saturday Morning Meetings Cancelled

It is said you can’t go home again, often because the home you knew doesn’t really exist anymore. In much the same spirit, the Pundit is glad he had the opportunity to attend Wal-Mart’s famed Saturday Morning Meeting, as we wrote about here.

Wal-Mart is canceling the meetings, which were originated by Sam Walton himself. Oh, that is not the way they spin it… they just are altering the format down to once a month and moving it off-site:

The legendary Saturday morning meetings that have long been at the heart of the Wal-Mart culture will dwindle to just one meeting per month.

And executives won’t be funneling into the home office for the soon-to-be monthly meetings, but will gather down the road at Bentonville High School where a larger auditorium can house the growing crowd of department managers required to attend.

Wal-Mart confirmed the news, announced Saturday at the meeting, but declined to make further comments as “details have not been worked out,” a company spokeswoman said.

No further comments are required. It is a symbol, a flashing light to draw attention for all those who missed it, that the old Wal-Mart, the one built and enriched by a culture that represented the Sam Walton ethos, is now dead and buried:

Wal-Mart on its Web site describes the meetings as “the pulse of our culture.”

The meetings are part entertainment and part hard-core business, according to a description found on the Wal-Mart Web site. The meetings are as famous for their celebrity cameos and Wal-Mart cheer as they are for hatching and implementing new ideas while competitors lined up the first tee on the golf course.

“I believe if you want to understand Wal-Mart, the Saturday morning meeting is the culture personified,” said Michael Bergdahl, international speaker and author on Wal-Mart culture, in a phone interview. “It’s really larger than life. The Saturday morning meeting equals competitive advantage.”

While most corporations meet quarterly, Wal-Mart devoted 52 Saturdays per year to critique the business, debate management philosophy and strategy, correct weaknesses and share ideas.

“Sam Walton used to say, ‘What makes us different is what makes us great,’ and I think that’s what the Saturday morning meeting was all about,” said Bergdahl, who worked under Sam Walton as director of people. “It fundamentally changes the culture and makes them more like everybody else.”

The Saturday morning meeting grew out of Sam Walton’s belief that everyone should work Monday to Friday in the stores and then on Saturday, when executives at competitors were off, the executives at Wal-Mart would work more and figure out how to do a better job the following week.

The meeting elicited much interest in the business press as a management tool as in this piece from Fortune:

THIS WEEKLY GET-TOGETHER is called, plainly enough, the Saturday Morning Meeting, and it is, perhaps more than anything else in founder Sam Walton’s copious bag of tricks, the management tool that has enabled Wal-Mart to metamorphose from a single small-town variety store in 1962 into the world’s largest and, for a time, most admired company — and lately the most controversial one too. Equal parts talk show, financial update, encounter group, merchandising workshop, town-hall forum, talent revue, gripe session, and, of course, pep rally — imagine a corporatized version of A Prairie Home Companion — the weekly confab is like watching the metabolism of Wal-Mart in action.

The meeting is the soul of this behemoth, which produced $288 billion in sales in its last fiscal year. It is the template for other vital gatherings that have evolved throughout the company, ranging from the daily shift-change meetings at the stores to the weekly management, merchandising, and operations meetings at the home office to the five companywide mega-meetings each year that draw more than 10,000 participants apiece. Not only do these assemblies reinforce and personalize Wal-Mart’s almost evangelical culture among its 1.5 million “associates” worldwide, but they also are largely responsible for the retailing giant’s amazing agility in the aisles. The meetings enable the company to continue to operate its entire business on a weekly and sometimes daily basis, just as the founder managed his first five-and-dime, moving quickly to outflank competition and growing almost as a matter of routine.

… As we’ll see, the gatherings really do make the company tick. And for all the down-home antics, the Saturday Morning Meeting remains the heart of the heart of Wal-Mart.

The first order of business of the Saturday Morning Meeting is discussing the past week’s sales numbers. [Lee] Scott [Wal-Mart’s CEO] swings his legs in the air as he sits on the table at the front and asks Wal-Mart Stores president Mike Duke and each of the divisional vice presidents to give brief interpretations of the week’s performance, as slides showing sales figures and year-to-year comparisons (as of midnight Friday) are projected on a large video screen behind them.

Each executive singles out a store or two for doing especially well or poorly and calls attention to weather anomalies or merchandising surprises, both good and bad, that might have affected business. Then Scott singles out a couple of specialty-department executives — say, the person in charge of one-hour photo processing, or jewelry, or vision centers companywide — to explain how their businesses did the past week.

Today Scott notices that a regional vice president isn’t present and asks his stand-in to explain. The underling relates that his boss had accidentally shot himself a few nights before while stalking a skunk in his backyard. Scott rolls his eyes and shakes his head and says, “Only at Wal-Mart would an executive shoot himself hunting a skunk. If he worked for Target, he’d have been hunting a mink.”

That is called corporate culture, and in so many ways the Saturday Morning Meeting epitomized what Wal-Mart was about. Part of it was about making the associates feel that management was working on Saturday just as they were:

HERE’S HOW the Saturday Morning Meeting was born. Back in 1962, Sam Walton didn’t think it was fair for him to take Saturday off when clerks at Walton’s Five & Dime in Bentonville faced their busiest day of the week. As he put it in his autobiography, “If you don’t want to work weekends, you shouldn’t be in retail.”

So he would show up in his shabby office in the back of the store at 2 or 3 A.M. and go through the ledgers to see which merchandise was moving and how the numbers compared with previous weeks. Then, when his associates arrived, he’d hold a meeting before the open sign was hung out and share his observations with the whole crew, ask their opinions, and decide what items to put on sale and display more prominently.

Not only did it endear the founder to employees, but it clued them in to how the company was doing financially and gave them all a weekly lesson in merchandising. As the company opened more stores and built up a staff, he continued the tradition, requiring all salaried associates — managers — to attend each week. He did so over the objections of his wife, Helen, who thought the meeting cut into time he and his associates should spend with family.

What actually impressed the Pundit most about the meeting was two things:

First, they actually reached out to associates with respect. The CEO would highlight an individual cashier in an individual store and grill her on video link for the techniques she used selling key chains or Pez dispensers at the checkout — pointing out that if every Wal-Mart cashier had achieved the same sales per hour, sales would have been up $3 million that week.

They would find out from the hosiery manager in another store that sales were depressed because they ran out of Christmas-themed socks. The meeting reflected two propositions: A) That at Wal-Mart, they were merchants and by improving merchandising, they would do a better job, and B) It also reflected a notion that the associates were the key to the company’s success and they have valuable lessons to impart to senior management.

Second, we were impressed by the drive to corrective action. As a problem was mentioned, the Blackberry’s started whirling and, very typically, a solution would be announced right at the meeting.

Visiting CEOs who had attending the meeting were often big fans:

“I think they’ve got a tool that’s amazing,” says Microsoft CEO Steve Ballmer. “The Saturday meeting is all about sharing best practices and about being accountable. It’s about a culture of performance, and it’s about reminding people that business has got to be executed every day. Those are disciplines every company needs.”

Lee Scott, Wal-Mart’s current CEO, adapted the meeting to new circumstances:

IN HIS FIVE YEARS AS CEO, Scott has put his own imprint on the Saturday Morning Meeting, just as Sam Walton and David Glass did before him. The main difference in Scott’s approach stems from the fact that Wal-Mart is now often viewed as a corporate villain. Rarely a week goes by without a splashy news report or public controversy over Wal-Mart’s anti-union stance, its promotion practices, or the impact of its stores on local communities. All that bad press takes its toll on morale, and it has prompted Scott to engage in some public soul-searching every time he runs the meeting.

“Over the last couple of years I’ve been spending much of the time talking about all the negative publicity we’ve been getting, not from the standpoint that we hate the press, but by asking our people what we are doing that allows people to perpetuate these kinds of negative discussions about Wal-Mart,” says Scott, sitting at the same scratched-up desk in the same dowdy office that belonged to the founder 20 years ago. “We can’t just fall back on the idea that we should have some leeway because we don’t mean to do any harm. We’re going to be judged on how we react to racism, or sexism, or these other issues when we find them going on, and I tell everyone we have to react more dramatically and in a less forgiving, harsher way to behaviors that don’t measure up.”

At one of the meetings I attended, for example, Scott explained the firings of two Wal-Mart managers in Florida for a breach of company policy that involved how a store helped in the distribution of emergency hurricane assistance. It wasn’t a public hanging, and he didn’t name names. “These were good people,” Scott told the hushed crowd. “But they made a judgment error. We had no choice because if you’re going to hold the associates to a standard in the store, then you can’t hold management to a different standard.” The net effect of Scott’s efforts to keep the meeting so open, educational, and spontaneous is that he is able to preserve the feeling that Wal-Mart, despite being the world’s largest company, is still a small-town retailer with an inferiority complex and a strong work ethic. Those are traits that he believes are more important than ever now.

It’s approaching 9 A.M., and today’s Saturday Morning Meeting is winding down. Scott launches into what can only be described as his benediction. ”Perfection is an awfully high standard for our people, but that’s pretty much what we have to shoot for now. We have to remember that any bad incident that occurs is not only a reflection on the individual who did it but on all of us here. Every decision you make is critically important to this company. If one person comes up to you and says, ‘I’m being sexually harassed,’ and you walk away without dealing with it because it’s uncomfortable or because it’s your manager involved, you expose the entire company to bad publicity. If you’re a buyer and you’re dealing with a supplier — particularly if it’s, say, a small Hispanic supplier and we represent 70% of their business — and you decide you’re going to rough them up, you are getting ready to take out the paint brush and put a big black mark across Wal-Mart Stores.”

The Saturday Morning Meeting schedule and — put another way — memory of Sam’s strict demands have been fading for decades. Sam demanded attendance every Saturday, and then it went to a requirement for attendance three out of four or four out of five Saturdays in a month. Later it changed to two out of four or three out of five Saturdays in a month. Now it will be once a month and the large scale of the meeting means it can’t be particularly interactive.

Now the meeting is sort of inside baseball and, perhaps, the supplier community won’t care one way or another. But the culture that produced the meeting is the same one that produced the injunction against roughing up that supplier — it is not likely one will survive without the other.

We’ve written about Wal-Mart’s loss of Bob DiPiazza, Bruce Peterson and Wayne McKnight. Now Wal-Mart’s Vice-Chairman John Menzer is retiring.

John Menzer is widely seen as a financial whiz, although his involvement with Wal-Mart’s international efforts have had mixed results.

Every departure has its own story and, seen individually, one can explain any of them as a product of individual circumstances.

Taken together, though, they are best seen as a clearing of the decks. They are a way for Eduardo Castro-Wright, President and CEO of Wal-Mart Stores USA, to consolidate power and install executives who were not influenced by the legacy of Sam Walton.

Only time will tell if Eduardo Castro-Wright and, by extension, Lee Scott are on the right course for Wal-Mart. It does strike us a terrible loss to allow the culture Sam Walton built to collapse, when there has been no clearly defined ethos to take its place.

One thing is for certain: Any suppliers who were ever told of any philosophy during the last two decades as Wal-Mart build supercenters, should probably forget what they heard. It came from executives who worked for a company that no longer exists.

Produce Leadership
For All Ages

We just returned from PMA’s Leadership Symposium in Dallas, Texas, which is produced in partnership with Cornell University and Pundit sister publication, PRODUCE BUSINESS.

It is a fabulous event, unique in the industry in that it encourages out-of-the-box thinking by bringing in speakers who have no particular expertise in produce or perishables and thus can only speak of business organization, strategy and similar topics.

Jodean Robins wrote a cover story for PRODUCE BUSINESS on leadership, which you can read here — she also sent along an interview that she did with the authors of a book Judgment: How Winning Leaders Make Great Calls, which posits that the key to leadership is making good judgment calls:

According to a recently released book based on a 5-year leadership study, good judgment is perhaps the most critical characteristic of a good leader. The book, “Judgment: How Winning Leaders Make Great Calls,” was co-authored by professors Noel Tichy of the Ross School of Business at the University of Michigan, Ann Arbor, Michigan, and Warren Bennis of the University of Southern California, Los Angeles.

“The single most important thing leaders do is to make good judgment calls,” Tichy and Bennis note. “In the face of ambiguity, uncertainty, conflicting demands and under great-time pressure, leaders must make decisions and take effective actions to assure the survival and success of their organizations.”

Tichy and Bennis add, “Judgment is a process beginning with getting the right information all the way through execution. Good judgment doesn’t show itself until it is well executed, and any mistakes must be recognized and corrective action taken.”

They show a distinction, noting, “When Cicero spoke, people marveled. When Caesar spoke, people marched. Leadership is not simply speech. It is speech that makes people march. Good judgment without action is worthless.”

The book outlines judgment as a process as opposed to a single event. “We have seen how effective leaders prepare for decisions by understanding the situation, knowing who will be affected by the decision, and allowing time to refine the decision,” explain Tichy and Bennis.

Three areas are identified where judgment must be exercised: selection of people, choice of strategy and handling crises. “These judgments come in three parts: preparation, call and execution,” they report. “Good leaders not only make better calls, but they are also able to discern the really important ones and get a higher percentage of them right. They are better at a whole process that runs from seeing the need for a call, to framing issues, to figuring out what is critical, to mobilizing and energizing the troops.”

In the book, the authors report one example of good judgment in leadership by Richfield, Minnesota-based Best Buy CEO Brad Anderson. When faced with formidable competition from Bentonville, Arkansas-based Wal-Mart Stores, Inc., Round Rock, Texas-based Dell and Seattle, Washington-based Amazon.com, Anderson made a strategic judgment in 2003 to transform Best Buy from product-centric into “a customer-centric retail company with deep consumer insight.”

As the book states, “What makes this strategic judgment so interesting is the process Anderson used to engage hundreds of Best Buy leaders in the process of preparing him to make the big shift.”

Tichy and Bennis had the opportunity to help design the process and work with Anderson and his team. According to the book, the process “took about six months of work engaging over 100 of Best Buy’s senior leaders to discover the segments they would go after, figuring out the value propositions for these segments and then developing plans for executing on those segments.”

“The process was highly engaged, chaotic at times, but highly energized; all the participants knew they were going to come up with judgments that would reinvent the company. This was a look over the horizon at what was emerging in the industry,” they state.

Starting in 2005, elements of customer-centricity were in all stores, and by early 2007 most Best Buy stores were operating in the new customer-centric model. “These changes represent a profound divergence from Best Buy’s practices in the past. In an effort to create more nimbleness and innovation, Best Buy is ‘unleasing the power of its people’ to think like business owners. This will require store leaders to create a culture of ‘owner operators’ [and] …translates into associates in the store making judgments that are in support of the overall customer-centric storyline.”

But Best Buy’s leadership does not stop there. Tichy and Bennis report, “A new set of strategic judgments were made at Best Buy in 2007, namely how to be truly customer-centric in a consumer electronics world where 65 percent of purchases are controlled by women.”

Driven by Julie Gilbert, a senior executive at Best Buy who, according to Tichy and Bennis, “headed up the high-end male segment when Best Buy launched customer centricity,” this “redo loop is coming up with new ways of capturing female purchasing power while simultaneously developing women leaders using an innovative action-learning approach.”

The book also relates an example of failed leadership due to problems communicating execution. “David Novak, CEO of Yum! Brands [KFC, Taco Bell and Pizza Hut], was struggling with how to get more unit volume.” Novak identified multibranding in the same restaurant as a possible solution to the problem. “We started with combinations of KFC-Taco Bell and Taco Bell-Pizza Hut,” he told authors Tichy and Bennis.

“We learned that we were able to add $100,000 to $400,000 per unit in average sales.” The book further reports, “Novak made the strategy judgment for multibranding then hit a brick wall in the execution phase,” principally due to the complexity of the individuality of the brands.

Novak told the authors his expectation got bogged down because, “People thought I loved it too much and that I wasn’t seeing the issues and complexity associated with it.” He reports, “I didn’t do a good enough job as a leader in stepping back and saying ‘Hey look, I know we’ve got a lot of challenges here.’”

We can’t stand a butchered quote, and we think the authors are alluding to a quote by Adlai Stevenson, who was comparing his own oratorical skills to those of John F. Kennedy.

Stevenson put it this way: "Do you remember that in classical times when Cicero had finished speaking, the people said, ’How well he spoke,’ but when Demostheenes had finished speaking, the people said, ’Let us march."

This in turn was based on a much older quote. As early as 1906 William Jennings Bryan wrote an introduction to the ancient Greek section of a book entitled The World’s Famous Orations and he wrote, “The object of public speaking usually is to persuade. Some one, in describing the difference between Cicero and Demosthenes, remarked: “When Cicero spoke people said: ‘How well Cicero speaks!’ but when Demosthenes spoke they said, ‘Let us go against Philip.’” — the difference being that Cicero impressed himself upon the audience, while Demosthenes impressed his subject upon them.”

One wonders who was a greater leader of men, one who inspired action or one who impressed on his audience the facts they needed to know to make wise decisions.

We are not certain that we buy this focus on judgment calls; it strikes us as more a characteristic of a management than leadership. Indeed the Pundit wrote a column questioning whether we buy a focus on leadership at all. In fact, in the piece we quote Peter Drucker:

You know, I was the first one to talk about leadership 50 years ago, but there is too much talk, too much emphasis on it today and not enough on effectiveness. The only thing you can say about a leader is that a leader is somebody who has followers.

The most charismatic leaders of the last century were called Hitler, Stalin, Mao and Mussolini. They were mis-leaders! Charismatic leadership by itself certainly is greatly overstated.

Look, one of the most effective American presidents of the last 100 years was Harry Truman. He didn’t have an ounce of charisma. Truman was as bland as a dead mackerel. Everybody who worked for him worshiped him because he was absolutely trustworthy. If Truman said no, it was no, and if he said yes, it was yes. And he didn’t say no to one person and yes to the next one on the same issue.

The other effective president of the last 100 years was Ronald Reagan. His great strength was not charisma, as is commonly thought, but that he knew exactly what he could do and what he could not do.

Drucker was skeptical about efforts to develop leaders in business:

We have talked a lot about executive development. We have been mostly talking about developing people’s strength and giving them experiences. Character is not developed that way. That is developed inside and not outside. I think churches and synagogues and the 12-step recovery programs are the main development agents of character today.

So we look for character as the most important element in leadership. One reason we enjoy the Leadership Symposium is that it uses a series of small group break-out sessions to ensure lots of networking opportunity that translates into a good opportunity to size up the participants… and their leadership potential.

While in Dallas, we had a chance to chat with Matthew Enny, a category management analyst out of the Salinas, California, office of Duda Farm Fresh Foods. He was the recipient of the first Produce Marketing Association Education Foundation (PMAEF) young professionals’ scholarship to attend the Leadership Symposium. Enny has traveled the dream road that the PMA Education Foundation hopes to see replicated:

Enny’s experience with PMAEF began as a Pack Family/PMA Career Pathways scholarship recipient in 2006, while he was a student at California Polytechnic State University, San Luis Obispo. He shared his experiences as a scholarship recipient with general session attendees at the 2007 Fresh Summit last October.

We were impressed as Matthew praised his Pack mentors Chris Ciruli, COO of Ciruli Brothers LLC, Nogales, Arizona, and Hurley Neer, Vice President of Grower Relations for Rosemont Farms, Boca Raton, Florida, and he couldn’t have been more effusive in gratitude for the opportunity to work under Bob Gray, CEO of Duda Farm Fresh Foods.

As we listened, we thought that his willingness to credit others with his success was a sign of strong character.

He kept some notes on a blog about the Leadership Symposium, and we thought he had some interesting thoughts that reveal how a young industry executive experiences these events:

Discussing the topics of company alignment, pricing, and growth through innovation is when I think the people at my table began to look at me differently. Not because I had some great input and ideas to bounce off the upcoming speakers, but because I pointed out that one of the books was written in 1994 … which just so happened to be when I was in the 4th grade. Smirks appeared, eyes squinted, and heads titled as even those who thought they were young amongst others at the table suddenly felt just a tad older, while the rest pointed out that they have grandchildren older than me. I sort of get that reaction a lot when I attend industry functions back home in Salinas and I just point out that, “Hey, we both have actors’ signatures on our college diplomas. Mine is Governor Schwarzenegger and yours is Governor Reagan.”

… Given my age and experience level compared with all the wisdom that was in the room, I heard some terrific answers. Shelly Carlson, retail business development manager for C.H. Robinson Worldwide, Inc., gave me great input by saying that I have to personally set a benchmark based on my quality of work and continue to raise the bar and in time I will be recognized for my accomplishments and rewarded.

A good advantage about being young here at the symposium is that everyone is willing to “show me the ropes” and “tell me how it is” and to me that’s the best kind of education I can receive. My question from the innovation breakout session leaked outside our group and before you know it people were giving me all sorts of advice. For instance, Gene Harris, senior purchasing manager for Denny’s Corporation, pulled me aside and said, “I have some ideas on how to address your question. Let’s talk later tonight.” Now I don’t know if it’s because I talk a lot and like to tell stories, but Gene and I ended up talking for 45 minutes about everything from how I can establish myself within the produce industry to the level of respect both of us share for the PMA Education Foundation and their successful progress. To me, this guy is a rock star in our industry, and I don’t mean like Meatloaf rock star — but Eric Clapton rock star, and that’s how I view many of the members of our industry.

At one point tonight I was sitting at the bar with Lorri Koster, vice president of marketing for Mann Packing Company, Inc., Lisa McNeece, vice president of foodservice and industrial sales for Grimmway Farms, and Ken Silveira, president and chief operating officer of Tanimura & Antle and in my eyes it was like I sitting next to Audrey Hepburn, Marilyn Monroe, and Frank Sinatra.

Here is a secret about leadership. The Pundit has known all these people a lot longer than Matthew Enny; in some cases he knew them before Matthew Enny was born. We speak or e-mail with some of the people he mentions every week.

Yet admiration of true leaders and respect for true leadership does not dissipate with time. It is enhanced with time, so when we chat with industry luminaries we still think we are talking to rock stars and we feel mighty lucky they want to talk to us.

You can read Matthew’s Blog on the Leadership Symposium in full here.

Vangelos To
Head Up Sun World

Sun World has had its ups and downs over the past few years but now it has called on one of the industry’s most venerated executives to serve:


Bakersfield, California, USA — Sun World International, LLC (“Sun World” or the “Company”) announced that its Board of Managers has elected Manager, Allen Vangelos, to the additional positions of President and Chief Executive Officer on an interim basis.

Mr. Vangelos has been a Manager of the company since October 2006. Mr. Vangelos brings over 36 years of management experience to the Company, including his most recent role as Principal of Novelle Consulting, LLC, a leading consultant to the produce and packaged food industry and Chairman of BC Hothouse Foods, Inc.

Mr. Vangelos previously served as President and Chief Executive Officer of Calavo Growers of California for 11 years.

Mr. Vangelos has replaced Bruce Burton, the Company’s outgoing president and Chief Executive Officer. Mr. Burton will remain with the Company as a Consultant until mid-August to assist in the transition.

Mr. Vangelos commented, “On behalf of the Board of Managers and entire management team, I would like to express our appreciation to Bruce for his efforts on behalf of Sun World. We wish him well in his future endeavors.” He added, “I am excited about Sun World’s prospects in 2008 and beyond, and look forward to working with the organization to build on recent achievements.”

Sun World International, LLC is a leading innovator in the research, production, distribution and promotion of fresh produce. Sun World maintains integrated agricultural operations throughout central and southeastern California.

Manager in this context means someone serving LLC in the equivalent position to a member of the board of directors of a corporation.

Al and his wife Mary danced at the Pundit’s wedding, and we have long admired his unique contributions to the trade. Although he has recently been working under the rubric of Novelle Consulting, we first got to see Al in action when he was Chairman of United back in 1991.

United was going through some difficult times and he provided a calming, yet progressive leadership. We have no doubt he will do the same for Sun World. We wish him and Sun World every good fortune.

Tim York Will Chair
Center For Produce Safety

We mentioned the launch of the Center for Produce Safety here and the appointment of an interim Executive Director here; now we are pleased to mention the appointment of Tim York, President of Markon Cooperative, as Chairman of the Board of Advisors of the Center for Produce Safety:

The Center for Produce Safety at UC Davis has named Tim York, president of Salinas-based Markon Cooperative, as chair of the center’s new board of advisors. With 30 industry, academic, and regulatory members named to the advisory board of the Center for Produce Safety, UC Davis is poised to further advance its research and education partnerships on foodborne illnesses such as E. coli.

York brings a strong agricultural and food processing voice to the Center for Produce Safety. “Tim York’s leadership on the advisory board will allow UC Davis, other research centers, the produce industry, and regulatory agencies to work together to establish the critical scientific foundation for ‘best practices’ that provide a safe food supply for the public,” said Devon Zagory, interim executive director of the Center for Produce Safety.

“The Center for Produce Safety is a critical step forward for the produce industry,” York said. “The center’s mission is to provide ready-to-use, science-based solutions that prevent or minimize produce-safety vulnerabilities. I am pleased to have been asked to serve the industry in this capacity.”

Markon Cooperative, Inc., based in Salinas, Calif., is a leader in procuring fresh fruits, vegetable and juices for food companies throughout North America. Under York’s leadership, Markon has long been a leader in food safety, quality control, and innovation. York formerly served as chair of the national Produce Marketing Association’s board of directors and served on the U.S. Department of Agriculture Fruit and Vegetable Industry Advisory Committee.

At the Center for Produce Safety’s first advisory board meeting, Zagory and York worked with board members to establish priorities for the center, such as developing university and produce-industry partnerships, assimilating research data on produce safety, and establishing an ongoing research program.

The Center for Produce Safety works closely with the Western Institute for Food Safety and Security, also based at UC Davis, to address numerous food safety issues, including foodborne illnesses. The center was established in 2007, and will appoint its permanent executive director in February 2008.

Tim is a logical one for this position. As a former Chairman of the Produce Marketing Association, he is trusted by that organization, which is providing significant financial support to the Center for Produce Safety. As an executive with a buying organization, we avoid the difficulties that would come from having one shipper chair the Institute as we approach other shippers for financial support.

Tim has become an indispensible asset for the produce trade. After serving as chairman of a national association, many would feel they did their bit for the industry. Yet Tim took a leadership role in the resolution of the trade’s food safety crisis — an activist activity for which we named him one of the winners of our Single Step award.

We have been pleased to work with Tim as a valued Pundit contributor, most recently right here, where he proposed an industry initiative on sustainability, which led us to begin work on an industry conference on sustainability and social responsibility. If you are interested in participating in this work please let us know here.

In the end, we are limited in what we can do with food safety by the limits of our knowledge, and the Center for Produce Safety is the industry organization dedicated to increasing that knowledge. Tim York is thus chairing the board of an organization that is exceptionally consequential to the future of the industry. We wish him every success.

Dole Builds Sales And Marketing Team

We have been chronicling the evolution of Dole’s marketing department ever since we announced the retirement of Rick Utchell here, the appointment of Rhonda Reed and David Bright here and the expansion of the team to include Yvonne Rentmeester, Odalis Hawit-Rivera and Keith Kelly right here.

Now Dole announces an additional expansion of the team:



Dole Fresh Vegetables, a subsidiary of Dole Food Company, Inc., has announced the hiring of two new positions to bolster the Sales and Marketing teams.

Joining the company on January 28, 2008, Mr. Joe Koch will assume the position of Director, Sales Strategy, Fresh Vegetables, reporting to Ms. Ronda Reed, Vice President, Marketing Fresh Fruit and Vegetables

Mr. Koch will be responsible for leading eight Sales Strategy Managers and Analysts whose tasks are to develop category management and trade promotion strategies and programs that achieve and exceed the division’s defined business goals. Goals include: recommendations to increase volume and revenue opportunities; evaluation of competitive activities; support of the broker community; and distribution-building efforts in concert with Sales, Logistics and Finance and optimizing trade promotional spending to maximize the effectiveness of promotions.

“Joe has an exceptional results record in strategic and tactical execution within category marketing,” says Ms. Reed. “He has proven he can lead cross-functional teams to help increase revenues and generate new ways of building brands.”

Mr. Koch joins Dole with more than 10 years experience in sales, trade marketing and category management, having worked with Supervalu, Wal-Mart, Wegmans, Bi-Lo and Best Buy. He is experienced with IRI, NPD, Nielsen, Retail Link, Spectra and other data set analysis, personnel training, brand development and building accurate forecasting models.

In addition, the company has announced the hiring of Ron Webb for the position of Regional Sales Manager, Canada, effective January 3, 2008.

Under the guidance of Andrew LuePann, Director of Sales, Mr. Webb will be responsible for supervising and developing business for Value Added Products throughout Canada. Focus will be on strategic development of all channels for distribution such as Grocery, Mass, Discount channels and Wholesalers.

“Ron brings an extensive background in wholesale and retail produce procurement and merchandising, packaged goods sales and marketing, as well as business development experience in the fresh produce industry,” says Mr. LuePann. “I am confident that he will be a great contributor in solidifying Dole’s position in Canada and we are excited to have him join our team.”

Our best to both Joe Koch and Ron Webb.

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