Published Articles: Profitable Growth

          In these times of rapid change and intense competition, we're all asking ourselves, "How do we grow our business profitably?" The answer begins with an understanding of the consumer.

          Consumers today have many more food choices than 20 years ago, and they're more adventurous about trying new flavors, dishes, and ethnic cuisines.

          They're time-starved, stressed out, and not inclined to spend a lot of time cooking.

          They're still concerned about healthful food choices, but they're becoming less rigid and focusing more on the positives.

          They're using food as a way to be nice to themselves. That's great for products already perceived as comfort foods, such as our mac 'n' cheese and Jell-O. Or consider turkey and mashed potatoes, drowning in rich gravy -- an indulgence you don't have to wait for Thanksgiving to enjoy!

          They're very much concerned with value -- with "what I get" versus "what I pay," where "what I get" is a bundle of features and benefits.

          Finally, as consumers get older, they eat some of the same foods but require changes in others.

          Given these conditions, there are three keys to success for the turkey industry.

          The first: to provide value to the consumer.

          You've shown you can do that. Products like turkey ham and bologna -- and turkey bacon, which we developed with your industry -- helped boost demand and consumption. You've gone further, with MDT hot dogs and bologna.

          But then was then; this is now. What are you going to do for the consumer of the 90s? Adding value goes way beyond trimming more efficiently, beyond achieving the lowest possible price-point and convincing consumers that their food dollar goes farther with turkey -- important as those are. It means thoroughly understanding consumers -- then responding to their needs.

          The second key: profitably grow market share.

          It's important to understand the positioning of turkey versus other protein sources, so that you can develop new concepts and products, keyed not only to continuing and emerging consumer trends, but to your competitors' products as well.

          How is turkey -- and all the things that can be made from it -- superior in responding to the consumer's need for nutrition, health, convenience, ethnic variety, and so on? How does it play into trends like "convenience" and "small indulgences"?

          Advertising communicates the value you have to offer and thus helps grow market share. But it's largely predicated on the difference between one brand and another, on innovations created by marketers to support, strengthen, and promote that brand.

          Still, a generic advertising effort can work. I think you're right to target foodservice operators: research has shown that consumer-focused generic advertising has sometimes had little or no success in driving demand. And foodservice is a high-growth area.

          Consider the role that your advertising will play. It's not a matter of overcoming the negatives. Turkey is still positively regarded -- as healthful and relatively inexpensive -- by many consumers.

          Also, it's not productive to make negative comparisons. After all, turkey's price advantages over red meat have largely disappeared, and its health advantages have been somewhat offset by products like fat-free ham and hot dogs.

          So focus on the positives. Communicate and reinforce turkey's natural advantages. And try to be fresh and different from your competitors. Promote your product in ways that they don't.

          The third key to success: low-cost production.

          This one promises big payoffs. Meat industry data show large differences between low- and high-cost growout and processing operations, and turkey is similar to other sectors.

          When your industry is highly competitive and costs are volatile, you win by focusing on that part of the value chain where you're strongest. Cost-cutting really is your strong suit, so you should pursue it -- aggressively.

          All of us in must reexamine practically everything we do. And the spirit with which we approach all this re-evaluation and change is important. Are we going to resist change -- and change only when we absolutely have to? Or are we going to welcome it -- and manage it to our advantage?

          The future never just happens. It's created, sometimes by accident, often by people acting consciously and seizing -- and generating -- opportunities. And that happens not when we resist change -- but when we welcome it and manage it.

          Lester Thurow, the MIT economist, put it very succinctly: "A competitive world has two possibilities for you. You can lose. Or, if you want to win, you can change."

          But there's even more to it than winning. We can reinvent ourselves -- and our companies. We become better, faster, smarter, stronger. Each success lays the foundation for the next one.

          This process brings us personal and professional satisfaction -- and makes our businesses as profitable and successful as we want them to be.