By Kelly Gates
Already sluggish hiring in the food-and-beverage industry will
likely slow even more if the U.S. heads into a recession as expected.
The disaster couldn't have come at a worse time for the industry,
which was beginning to show signs of turnaround.
"The food-and-beverage industry has been soft in the past
year anyway, but some [companies] were actually starting to rebound,"
says Tierney Remick, managing director of the North American consumer
practice in Chicago for Korn/Ferry International, a New York-based
search company. "However, the attack on the country will, at
least in the short term, stop food companies from experiencing the
accelerated growth they expected to have."
Food-industry companies often grow and increase earnings by making
strategic moves, such as an acquisition, new-product launch or hiring
new leaders, says Dave Hardie, a New York-based partner in consumer
products for Heidrick & Struggles, a Chicago recruiting firm.
But companies will likely suspend such activities until they know
how severely the economy will be affected. "Unless a company
has already made firm plans for a strategic change, my guess is
that there will be a pause until everything stabilizes again,"
says Mr. Hardie.
Following numerous mega-mergers in 2000, industry watchers expect
slow growth domestically -- 2% -- and more opportunity overseas
in 2001. Many major food-and-beverage companies have been trying
to recover from several quarters of negative earnings by focusing
on cost-cutting and increasing profits. This has reduced the need
to hire executives in staff functions and increased demand for professionals
in revenue-generating areas, such as sales and marketing.
"Companies have pretty much stopped hiring people in areas
like human resources and public relations because these are big
cost centers," says David Bowman, chairman of Lincolnshire/TTG
Consultants, Inc., a search company in Los Angeles. "However,
sales and marketing generates revenues, so that's where most companies
are placing their emphasis."
Meanwhile, small to mid-sized companies have taken advantage of
recent industry consolidations to recruit presidents, chief financial
officers and other senior managers leaving newly merged organizations.
"The two major trends affecting the job demand in the food
industry are negative earnings and consolidation," says Mr.
Bowman. "After two or three quarters of less-than-stellar earnings,
boards begin demanding cost-cutting measures, and the executives
who are safe from earnings-related cuts might eventually be downsized
after a merger or acquisition anyway," says Mr. Bowman.
ConAgra Foods Inc., Campbell Soup Co., H.J. Heinz Co., Kellogg
Co., Sara Lee Corp. and Tyson Foods Inc., all have had earnings
warnings this year, says David Nelson, food analyst for Credit Suisse
First Boston in New York.
"Most of these companies are now at a new base from which
they can grow substantially, but they certainly haven't done well
in the past 12 to 18 months," says Mr. Nelson.
Campbell Soup Co. is stepping up its marketing spending by 15%,
or approximately $200 million, for fiscal 2002. "Other companies
are following suit and seeking senior vice presidents of sales and
marketing. Such professionals must have between 15 and 25 years
of experience and proven track records of success at other food
or beverage companies," says Mr. Bowman. He's searching for
senior and mid-level sales and marketing executives and professionals
to fill openings at five food-and-beverage companies in North Carolina,
Pennsylvania, Florida, New York and Boston.
A few large companies also are searching for chief executive, financial
and operations officers with strong financial backgrounds who can
help turn around declining performance, says Ms. Remick. However,
she says the demand for chief officers is strongest at smaller companies.
"At this time, there's a much greater opportunity for these
executives to find work at smaller companies because consolidation
has eliminated a lot of the positions at larger food companies,"
says Ms. Remick. "Companies want chief officers with at least
20 years of experience, and they're seeking candidates who have
proven records of managing in a multi-functional position with lots
of [profit and loss] experience and a strong sense of strategy and
At larger companies, senior executives often earn packages that
include annual base salaries, annual [bonuses] and stock options
in the seven-figure range, says Ms. Remick. But as the declining
stock market erodes the value of options, some companies, including
Coca-Cola Co., are restructuring executive compensation packages,
says Mart Kilpatrick, a partner with Zay & Co. International,
a search company in Atlanta.
"Base salaries are going up somewhat at some companies because
stock options aren't as valuable as they used to be," says
Mr. Kilpatrick. "Coke has been restructuring its compensation
packages and offering less stock options and more base salary because
it's hard to entice top executives with stock that hasn't done well
in the past few years."
As opportunities at small to mid-sized firms are picking up the
slack as openings for presidents as major food-and-beverage companies
dwindle, says Ray Schorejs, vice president of recruiter Roth Young
of Houston. Most firms seek candidates who have been presidents
or chief operating officers at larger companies previously. "We've
placed several presidents into small food companies this year after
they were downsized from larger companies as a result of consolidation,"
says Mr. Schorejs. "They want candidates with strong financial
backgrounds, experience with P&L and budgeting, an entrepreneurial
spirit and a thorough understanding of the industry." According
to Mr. Schorejs, presidents at smaller companies can earn between
$180,000 and $220,000 in annual base salary, plus bonuses and equity.
Downsized After Six Years
Indeed, consolidation has had an impact on many senior executives
in a variety of positions. Consider Rick Krombach, who after more
than six years as senior supply-chain manager for Borden Foods Corp.
in Columbus, Ohio, has been job hunting since the company sold its
businesses to multiple buyers.
"There's a lot of consolidation taking place in the food industry,
which means that people like myself run the risk of being downsized,"
says Mr. Krombach.
As a manager with 24 years of experience in logistics and supply-chain
management, Mr. Krombach expects to be re-employed soon. He feels
fortunate to be a logistics expert, since logistics is in demand
outside the food industry. Nevertheless, he expects his job hunt
to be a little sluggish in the third and fourth quarters as companies
"try to meet numbers at the end of the year, especially this
year," he says.
So far, Mr. Krombach has been on two interviews with companies
outside the industry and hasn't actively pursued a job at another
food company. "I have no aversion to working in the food industry
again, but I'd definitely think twice about taking a job with a
company that might consolidate in the near future," he says.
In manufacturing areas, the demand for quality-control and quality-assurance
managers declined during the second and third quarters due to cutbacks,
says Dick Stoltz, president of search firm Management Recruiters
of Columbus, Ohio.
"Although quality is still important, it tends to go by the
wayside during rough times, and companies don't hire as much in
this area unless it's absolutely necessary," says Mr. Stoltz.
"Most of the hiring right now [in manufacturing] is in production,
engineering or operations, but due to cutbacks companies are mostly
hiring to fill critical vacancies in these areas."
According to Mr. Stoltz, plant managers must have a degree in food
science or other food-related area plus food-manufacturing industry
experience. Base salaries for superintendents range from $60,000
to $70,000, while plant managers earn between $80,000 and $150,000,
depending on the size of the company.
According to Mr. Kilpatrick, demand for professionals at beverage-manufacturing
companies also has weakened in the past few months as companies
like Coca-Cola Co. and PepsiCo Inc. concentrate on product development.
"Beverage companies are focusing all of their attention on
professionals like vice presidents of product development who can
create new product lines that will help them compete with other
companies," he says. "They want people who can either
create extensions of the products they have or come up with new
products so they can encompass all consumers' tastes with a wide
variety of products."
Vice presidents of product development must have proven success
developing new product lines at other consumer packaged-goods companies,
says Mr. Kilpatrick. Vice presidents of product development earn
base salaries ranging from $175,000 to $225,000, plus bonuses and
Other positions like vice presidents of manufacturing, directors
of operations, production managers, quality-control managers and
warehouse and logistics managers are being filled primarily due
to turnover, says Mr. Kilpatrick.
Beverage-company manufacturing vice presidents typically need experience
managing multiple-plant operations at other food-manufacturing companies,
preferably at another beverage company. Plant managers must have
experience managing a soft drink, juice, bottled water or other
Depending on the size of the company, vice presidents can earn
between $125,000 and $250,000 in annual base salary, plus bonuses
and equity, says Mr. Kilpatrick says. Plant managers earn between
$75,000 and $100,000 in annual base salary, plus bonuses and stock