ALTIX INDUSTRY CHAMPIONS INTERVIEW
One on One: Discussion with a Global Industry Champion: Perfetti Van Melle
Each quarter we sit down with industry executives and thought leaders to discuss the trends, challenges, and best practices that are transforming their businesses.
Today, we are with Sylvia Buxton, President & CEO at Perfetti Van Melle North America, to discuss how Sylvia and her team are successfully developing the North American business for a Dutch-Italian Industry Champion.
Sylvia, can you please introduce yourself and Perfetti Van Melle?
I’ve been with the company for 6 years, after a decades-long career in CPG marketing, previously at The Hershey Company and Reckitt. I joined Perfetti Van Melle as head of Marketing for the US and Canada and three years ago was named President & CEO North America. I’m originally from Canada but have been living and working in the US now for almost 25 years.
Perfetti Van Melle is a privately held company headquartered in the Netherlands. We are the second-largest global manufacturer of chewing gum, mints, and non-chocolate candy, with operations and about 18,000 employees in over 35 countries. Our core brands here in the USA are Airheads, Mentos, Fruittella, and Chupa Chups. I am responsible for 1,000 employees in the North American division, divided 50-50 in the U.S. and Mexico.
How does Perfetti Van Melle continue to grow and win market share in such competitive markets?
The USA is one of the largest confectionery markets in the world, with retail sales of over $10 billion, excluding chocolate. Perfetti Van Melle is the 5th largest manufacturer in the US market, and we are one of the fastest-growing in the top 5. We have consistently grown faster than the market for almost a decade, doubling our topline sales and increasing profit more than 5-fold. Our growth has been achieved with a consumer-led strategy of driving our brands into new occasions and retail channels and balanced between core and innovation. Most recently, we’ve expanded our brand portfolio from Airheads and Mentos to include Chupa Chups and Fruittella, two successful brands from the company’s global portfolio. We continue to see tremendous opportunity for organic growth in the US market, targeting such spaces as “better for you” with products such as our recently launched Mentos Gum With Vitamins and Fruittella Soft Gummies, and through further expansion in both brick-and-mortar retail as well as eCommerce.
Interestingly, gums and mints have been negatively impacted by the crisis with fewer in-person encounters hence, less need for breath fresheners. On the other hand, non-chocolate candy saw double-digit growth as a comfort treat while confined at home. We are now starting to see a comeback of “enjoy mints” products, with Mentos chewy mints taking advantage of this resurgence.
How would you describe the Perfetti Van Melle Innovation Culture?
Perfetti Van Melle is a purpose-driven, values-oriented company with a ‘candy-like’ fun culture. Not only are we family-owned, we also treat our employees like family. When you work in a fun industry like confectionery, you can’t take yourselves too seriously, so laughter and humor are a big part of how we operate.
Our company’s purpose is Innovative Treats. Better Future. So innovation is a part of our DNA.
We are fortunate to be part of a global family of brands with incredible talent and knowledge in innovation that we all share and can learn from. We also have a unique and rich heritage in confectionery in markets all around the world which contributes to our appreciation of diversity.
What kind of evolutions do you see in sales and distribution management in your industry?
COVID and remote working have caused significant changes in how we connect with and sell to our key customers, as well as how consumers interact with and purchase our brands. Going forward, I anticipate that virtual selling and customer interfaces will continue to evolve with the help of technology. Meanwhile, face-to-face meetings and conferences will become a less important part of our selling approach. We are supporting our sales team’s transition to remote selling, providing training programs on how to be effective in setting up and running meetings, using technology.
From a consumer perspective, the shift to eCommerce is accelerating due to COVID, as millions of consumers shifted from in-store to online shopping. As an example, two years ago Amazon was our 12th largest customer, and now they are our 7th largest. In an impulse-driven category like confectionery, we are working to determine the future of impulse buying in an online world.
How can technology help change the game, and more specifically, how can operations and supply chain remain at the state-of-the-art in the industry?
Technology is the biggest disruptor that has been driving innovation across the entire business landscape. This trend, like many, has accelerated throughout COVID and I anticipate digitization and other technological innovations will be a key driver going forward. We’ve made significant investments in automation and robotics in our factory and warehouse, as well as digital automation throughout the rest of our business. And we’ll need to keep investing here to keep pace with and win in the market.
Here in the US where labor cost is higher, we have implemented technology solutions where automation can effectively replace highly repetitive jobs and can increase speed and accuracy to levels not achievable by manual labor. We have high-speed robotic lines that have multiple robotic arms to pick and pack candy bars. We also did a big investment in warehouse automation to improve shipping efficiency. With continued growth in our business, we have more than doubled our workforce over the last 5+ years, even while we have also invested in automation, so most of our operations jobs now require more technical skill-sets.
Labor shortage and skill gaps are real challenges and a chief concern for top management for decades now. The problem isn´t going anywhere. What is your strategy to overcome this long-term trend?
Labor shortage, particularly in manufacturing, is another trend that accelerated during COVID. In the short term, we continue to focus on strengthening our employer brand as a great place to work making brands that bring smiles to consumers. Of course, enhancing our total compensation package has been part of our approach. As well, we have staffed up and enhanced our technical training programs, implementing a skills-based career path within Operations where compensation increases with each technical skill mastered. We also partner with local technical schools, colleges, and universities. The USA, as a country, needs to continue to invest in manufacturing to succeed in the global economy; this will require a partnership between industry, education, and government.
We also continue to keep our core value of “Care for our People” at the forefront in every decision we make and our employee experience in an effort to retain valued employees. This ranges from our already very strong and competitive benefits package and paid time off, plus rewards and recognition programs to creating a fun, candy-like culture and intentionally making diversity, equity, and inclusion (DE&I) a priority.
Now, let’s talk about women in leadership. We would love to hear your comments from your perspective of being a strong woman in a great leadership role.
When I graduated from University with a business degree, my class was more than half women. I’d love to know where all those women are now. Despite making advances for women and women of color in leadership roles, there is a ton more to be done, as men outnumber women in leadership roles. I am myself the first woman on the Global Executive Team at Perfetti Van Melle. I’m a big believer in mentoring and coaching to support women in their careers. Women need to get more comfortable taking a seat at the table, taking roles that push them outside their comfort zone, and ensuring they have a strong support network. It is a passion of mine to help other women succeed and I am involved with the Network of Executive Women (NEW). I believe very strongly in giving back and supporting women and I do so through the active NEW chapter in the Cincinnati region, as well as volunteering my time on the mentoring committee with the NKY Chamber Women’s Initiative.
As a leader, you are challenged in many ways – how do you personally find your balance and keep your energy level high and a positive/forward-thinking mindset even in the most difficult times?
I saw a great image the other day of a glass half full of water. The caption said something like: half full of water, half full of air, so the glass is full! I’ve always had a positive outlook and I like to think about “how we might” rather than “why we can’t”. This probably comes from being a competitive swimmer for most of my adult life. Of course, daily training is a great stress reliever and a strong body enables a strong mind. As well, competitions require me to be resilient: If one race doesn’t go my way, I need to brush it off and get myself set for the next one. Being successful in business is a lot like this. Sometimes strategies don’t work the way we expect, or competitors beat us, but this just means we need to be innovative, persistent, and focused for the next challenge.
Thank you very much Sylvia for sharing with us and our readers your story and the story of Perfetti Van Melle. We wish you and your team continued success.
ABOUT PERFETTI VAN-MELLE: Perfetti Van Melle is the world’s second-largest manufacturer and distributor of confectionery and chewing gum. Our brands convey the passion we have for our products. We continuously explore new ways of doing things and innovative ideas that will inspire and delight our consumers worldwide. Our global brands Mentos, Chupa Chups, Alpenliebe gratify, refresh, inspire consumers of all ages around the globe. Other brands such as Airheads are extremely popular in regional markets with innovative tastes that match local preferences. www.perfettivanmelleus.com
ABOUT ALTIX: Altix is the middle-market international industrial champions’ management consulting partner, providing business strategy, technology and innovation, and operational excellence support, in the world of advanced manufacturing and international supply chain. www.altixconsulting.com