EDITOR’S NOTE: I have had the good fortune of getting an advanced copy of a book that will be released to the public over the next few weeks. The title of the book is From Baghdad To Toronto: A Journey Of Values by one of the country’s top business executives.
As I turned each page in my cover-to-cover read, I found myself energized by the rich insights—business gold, if you will—from someone whose family business and values go back 700 years. I also found an unexpected and undeniable link between the underlying messages behind the stories and procurement and sales. In short, this book – whether intentionally or not, is the holy grail of procurement and sales wisdom – and, ultimately, business and life success.
The following excerpt is just one of the many great stories in a book that is rich with personal experiences and insight. What I am saying is that these stories are not conceptual but based on actual experiences and tangible outcomes.
Walmart, Pringles, And Crunches
As I said earlier, I was really impressed with the creativity behind the packaging of Fuji water—I loved everything about it. So, when the sales representative (Steve), who I met through the water company, told me that Walmart was looking for a canister chip, a Pringles knock-off, the wheels began to turn.
Like Fuji water, where the packaging and the product quality were top-notch, I knew I could do something similar for a no-name-brand, Pringles-style potato chip by bringing together innovative packaging with a high-quality product inside at a fair price. Remember, that is my formula for success.
Steve asked me if I could do it, and when I told him yes, he made an appointment to meet with a senior executive at Walmart.
Three days later, I entered the office of the senior vice president, Bob Anderson, in the United States with a sample can. Before meeting with Bob, I had an artist design a new label for a sleeve that I put over a Pringles can to create the sample can for the new chip. You have to remember, at this stage, the non-branded version of Pringles was a concept more than a reality. But it was a concept that I was confident I could pull off based on my experience with transforming the rattan and juice businesses.
You should note that I also brought actual food samples of our popcorn and potato chips to demonstrate that we could deliver a high-quality product.
We sat down in the meeting room with Bob Anderson and the Walmart team and presented our samples. At that point, Bob said that they had previously met with five other companies about this project, but none had brought with them any samples. So, because I brought a sample can, I won the business.
I then said I needed a five-year agreement.
Bob told me, “We don’t do that.”
I said, “If I am going to spend five million dollars to get this product produced, I need to have a solid agreement.”
He again said, “we do not do this,” e.g., enter into an agreement.
I said, “Come on, Bob, we are spending five million dollars on the new line.”
He said, yet again, “We don’t do that.”
I said, “Look, we dealt with your counterpart in Canada on a promotion where they committed to a certain volume and only bought 10 percent of what was promised.”
Bob got up and left the office. I didn’t know why he left, but he returned with five people from the reception area a short time later. In front of me, Bob asked them how long they had been doing business with Walmart as a supplier. Ten years was the response.
“Have we ever screwed you?”
“No, you haven’t.”
He repeated this process four or five times, with all suppliers offering the same response. I looked at Bob and said, “I got the message, no problem, we will do it without a contract.”
He said, “You have the business.” I then gave him an estimated cost of around fifty-six cents per unit. He said, “I will take it.” The estimated volume was a hundred million units.
Before we left, I said to Bob, “We do a line of potato chips as well.” He said, “I’m not interested.” I said, “Just try it; what do you have to lose?”
I opened the no-name bag of chips I made for Loblaws. I used the Loblaws product because Walmart admires Loblaws products. I had never seen a bag of chips like this. They were golden in colour, with not a single broken chip, with an incredible, mature taste. They were the perfect chips.
He looked at it and said, “I want some samples.”
I told him, “I don’t give samples.”
He then picked up the phone and said, “Dan, you have to come down here and see something.”
When Dan arrived, Bob told him to look in the bag, after which Dan said, “Send us some samples.”
Looking over to Bob, I said, “I don’t send samples.”
Bob said, “I need to know your price.”
I said, “Thirty-eight and a half cents.”
He said, “The business is yours; send me samples.”
Bob then looked at the big bag of chips and said, “What about the big bag?”
I said it cost $1.15 or $1.12.
He said, “Come back with samples for that.”
Walmart not only purchased the no-name Pringles-style product, but also our line of bagged chips.
What about the popcorn?
They added our popcorn line to the deal at the next meeting. Three product lines in all: a Pringles version of chips, bagged chips, and popcorn.
Within eighteen months, we achieved an annual run rate with Walmart of twenty-eight million dollars.
The Right Number of Crunches
Landing a major deal as I did with Walmart is one thing. Delivering on it is another.
As part of our R&D process, I flew to Italy to check out the machine that would be able to produce the Pringles-type chip. I worked with the R&D people to mimic the Pringles product.
Many people do not know what is involved with making such a chip. You need to ensure that the person eating the chip gets eighteen or nineteen crunches per chip.
After multiple tries, we finally did it—we successfully made our version of the Pringles chip.
As an interesting aside, the Italian company I was dealing with also dealt with Pepsi, who wanted to get into the Pringle’s knock-off business. The difference is that they tried to use plastic containers.
Now, you may be wondering at this point, why eighteen to nineteen crunches? Because the crunch is like music to the consumer’s ear—they want great taste, and they want the crunch.
We were selling not only taste but a taste experience. People who really understand our business know what makes a product different from a competitor’s goes beyond name brand and packaging. The first is the crunch, then the flavour, shape, etc. If you meet all of these criteria, you will have a successful product.
30
Procurement Insights
Like Water For Pringles And The Right Number Of Crunches
Posted on May 22, 2024
0
EDITOR’S NOTE: I have had the good fortune of getting an advanced copy of a book that will be released to the public over the next few weeks. The title of the book is From Baghdad To Toronto: A Journey Of Values by one of the country’s top business executives.
As I turned each page in my cover-to-cover read, I found myself energized by the rich insights—business gold, if you will—from someone whose family business and values go back 700 years. I also found an unexpected and undeniable link between the underlying messages behind the stories and procurement and sales. In short, this book – whether intentionally or not, is the holy grail of procurement and sales wisdom – and, ultimately, business and life success.
The following excerpt is just one of the many great stories in a book that is rich with personal experiences and insight. What I am saying is that these stories are not conceptual but based on actual experiences and tangible outcomes.
Walmart, Pringles, And Crunches
As I said earlier, I was really impressed with the creativity behind the packaging of Fuji water—I loved everything about it. So, when the sales representative (Steve), who I met through the water company, told me that Walmart was looking for a canister chip, a Pringles knock-off, the wheels began to turn.
Like Fuji water, where the packaging and the product quality were top-notch, I knew I could do something similar for a no-name-brand, Pringles-style potato chip by bringing together innovative packaging with a high-quality product inside at a fair price. Remember, that is my formula for success.
Steve asked me if I could do it, and when I told him yes, he made an appointment to meet with a senior executive at Walmart.
Three days later, I entered the office of the senior vice president, Bob Anderson, in the United States with a sample can. Before meeting with Bob, I had an artist design a new label for a sleeve that I put over a Pringles can to create the sample can for the new chip. You have to remember, at this stage, the non-branded version of Pringles was a concept more than a reality. But it was a concept that I was confident I could pull off based on my experience with transforming the rattan and juice businesses.
You should note that I also brought actual food samples of our popcorn and potato chips to demonstrate that we could deliver a high-quality product.
We sat down in the meeting room with Bob Anderson and the Walmart team and presented our samples. At that point, Bob said that they had previously met with five other companies about this project, but none had brought with them any samples. So, because I brought a sample can, I won the business.
I then said I needed a five-year agreement.
Bob told me, “We don’t do that.”
I said, “If I am going to spend five million dollars to get this product produced, I need to have a solid agreement.”
He again said, “we do not do this,” e.g., enter into an agreement.
I said, “Come on, Bob, we are spending five million dollars on the new line.”
He said, yet again, “We don’t do that.”
I said, “Look, we dealt with your counterpart in Canada on a promotion where they committed to a certain volume and only bought 10 percent of what was promised.”
Bob got up and left the office. I didn’t know why he left, but he returned with five people from the reception area a short time later. In front of me, Bob asked them how long they had been doing business with Walmart as a supplier. Ten years was the response.
“Have we ever screwed you?”
“No, you haven’t.”
He repeated this process four or five times, with all suppliers offering the same response. I looked at Bob and said, “I got the message, no problem, we will do it without a contract.”
He said, “You have the business.” I then gave him an estimated cost of around fifty-six cents per unit. He said, “I will take it.” The estimated volume was a hundred million units.
Before we left, I said to Bob, “We do a line of potato chips as well.” He said, “I’m not interested.” I said, “Just try it; what do you have to lose?”
I opened the no-name bag of chips I made for Loblaws. I used the Loblaws product because Walmart admires Loblaws products. I had never seen a bag of chips like this. They were golden in colour, with not a single broken chip, with an incredible, mature taste. They were the perfect chips.
He looked at it and said, “I want some samples.”
I told him, “I don’t give samples.”
He then picked up the phone and said, “Dan, you have to come down here and see something.”
When Dan arrived, Bob told him to look in the bag, after which Dan said, “Send us some samples.”
Looking over to Bob, I said, “I don’t send samples.”
Bob said, “I need to know your price.”
I said, “Thirty-eight and a half cents.”
He said, “The business is yours; send me samples.”
Bob then looked at the big bag of chips and said, “What about the big bag?”
I said it cost $1.15 or $1.12.
He said, “Come back with samples for that.”
Walmart not only purchased the no-name Pringles-style product, but also our line of bagged chips.
What about the popcorn?
They added our popcorn line to the deal at the next meeting. Three product lines in all: a Pringles version of chips, bagged chips, and popcorn.
Within eighteen months, we achieved an annual run rate with Walmart of twenty-eight million dollars.
The Right Number of Crunches
Landing a major deal as I did with Walmart is one thing. Delivering on it is another.
As part of our R&D process, I flew to Italy to check out the machine that would be able to produce the Pringles-type chip. I worked with the R&D people to mimic the Pringles product.
Many people do not know what is involved with making such a chip. You need to ensure that the person eating the chip gets eighteen or nineteen crunches per chip.
After multiple tries, we finally did it—we successfully made our version of the Pringles chip.
As an interesting aside, the Italian company I was dealing with also dealt with Pepsi, who wanted to get into the Pringle’s knock-off business. The difference is that they tried to use plastic containers.
Now, you may be wondering at this point, why eighteen to nineteen crunches? Because the crunch is like music to the consumer’s ear—they want great taste, and they want the crunch.
We were selling not only taste but a taste experience. People who really understand our business know what makes a product different from a competitor’s goes beyond name brand and packaging. The first is the crunch, then the flavour, shape, etc. If you meet all of these criteria, you will have a successful product.
30
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