What it takes to win in the CPG world
In 1975, when I started what would become Rexall Sundown, the world was a very different place. Gerald Ford was in the White House, there was no social media and the TV universe was limited to three networks and a few local channels.
The world was a simpler place and while it has never been easy to build a successful brand, the path was clearer then. I knew that if I wanted to reach consumers I could advertise on network TV or in one of the tabloids available on the supermarket checkout line. Rexall Sundown was a family business in the beginning, but by the time Royal Numico acquired the company in 2000 for $1.8 billion we were the world’s largest vitamin and supplement maker. We sold more than 1,000 SKUs in all the major mass market retailers from coast to coast, had 1,500 employees and operated our own manufacturing plant and distribution facility. We were a proud well-oiled highly performing team.
I had come a long way from my days as a young Walgreen’s manager who used to sell sunscreen to tourists on Miami Beach. However, it was those early experiences in retailing that taught me sales and management skills that I was able to use to build a vitamin brand that was known worldwide. Building brands became my passion so even though I had sold the company I never truly retired. In fact, the success of Rexall Sundown has allowed me to grow other brands such as Tabanero Hot Sauce and Bloody Mary Mix, Celsius, a negative calorie fitness drink, and Agro Labs, a liquid nutrition company. I’m also still active making vitamins through a partnership with the first guy who extended me credit at Sundown, Jerry Kay who runs Manhattan Drug Company.
As I mentioned at the start, much has changed in business in recent decades, but there are fundamentals that hold true that every entrepreneur and even established companies are wise to follow. For example, some things never go out of style, such as a quality product at a sensible price.
It is a philosophy we applied to Tabanero Hot Sauce. It meant spending months experimenting with taste profiles and making sure the product was all natural and made with quality ingredients because that’s where we saw the market moving. With Celsius, we spent the money and took the time to conduct seven different clinical trials in order to substantiate our claim that the product burns calories and reduces fat. Both brands are positioned as quality, premium brands but they are also attractively priced to gain trial and to meet the budgets of consumers who want quality at a fair price. Having the science to back our brand was critical in establishing credibility with consumers and retailers. Credibility and integrity is essential when you are establishing a new category.
Quality at an appropriate price is just the beginning. To stand out in the marketplace requires attractive, effective and environmentally friendly packaging supported by great copy, clever advertising.I personally spent a great deal of time working on copy, packaging and advertising — and still do today. While we get input from a variety of sources, we are always striving to do better and to say more with fewer words. Today’s consumer is intelligent, more informed than ever and they read labels. So we meticulously research ingredients and make sure to use the most healthful ingredients while keeping to a minimum those with name most people can’t pronounce.
We also know that you can have the best product in the world, but without a good team nothing is going to happen. That’s sounds like a basic concept, but during my career I have seen countless companies fail to reach their full potential because they tolerated egos, personal agendas and poor performance. We look for winners and in our definition that means team players who like to collaborate and share success. We also look for entrepreneurial characteristics embodied by self-starting go-getters who are hungry and ready to wear multiple hats. There’s no room for suits in my world. We all bring a lunch pail at CDS International Holdings.
We also live by the credo that “good begets good”. In other words, if we treat employees, partners, retailers and consumers right, we will be justly and amply rewarded. But good intentions alone are enough. You have to continually challenge yourself to stay current by studying other businesses, reading competitors’ ad copy, poring through trade publications, attending ingredient and trade shows, looking at trends in other countries and consulting with smart people in all sorts of businesses for ideas and inspiration. We hold daily think tank sessions to talk about everything from the news to products we have seen at retail. The exercise keeps us all sharp and constantly on the look-out for new ideas.
Lastly, we apply a philosophy to build slowly and smartly. We prefer to pick drill down markets that we know and can learn something from rather than race to be on every shelf imaginable. With Tabanero we have taken pains to build the brand at the restaurant level in California and our home state of Florida. Why? Because California is where trends are born and Florida is a diverse market that we can support effectively. We are however always open to opportunity, so when HEB in Texas called and asked to carry us we jumped on it, because we wanted to test our sauce at retail, with the muscle of a fine retailer behind us. We are using the experience to learn, fine tune and eventually add other retailers.
While the fundamental of brand building are largely unchanged and will still be relevant 100 years from now, the fundamental shift and influence of technology requires all brands to embrace social media. We learned to advertise where our consumers are whether it be Facebook or Pandora and engage with consumers who want to have a conversation via social media. However, we haven’t forgotten that a great print ad or well place billboard can still move the sales needle.
The retail and CPG world and the entrepreneurism on which it thrives has a way of getting in your blood. It did mine which is why I still wake up and go to bed wanting to win. Business is a passion, a pleasure and an enduring challenge that has a way of keeping this veteran of the industry young, sharp and always on the lookout for an edge on the competition.
Carl DeSantis is CEO at CDS International Holdings.