By Andrew Saunders Tuesday, 01 January 2008

The MT Interview: Dave Woodward

With all the persuasiveness of an ex-sales director, he's deploying his considerable skills to try to turn Heinz UK & Ireland from has-been to 21st-century reinvention. Tired products are getting a fresh and saucy face while new recipes and packaging pour out. Can he pull it off?

They say it's tough at the top, and here's proof. He's only 18 months into the job, and already Heinz UK & Ireland president Dave Woodward has done a longer stint than both of his predecessors. Ouch. Even in an age where big-company-boss tenure averages out at three or so years, that's a pretty punishing rate of what consultants call forced attrition.

But jacket off, shirtsleeves rolled, the new Mr Bean is relaxed and confident, looking not at all like he thinks he might have to follow that unfortunate duo out of the door any time soon. Sitting in his office at Heinz's elegant HQ in Hayes Park, Middlesex, he wastes no time in explaining why. 'This was a company that for the five years before I joined had suffered long-term decline at the top and bottom lines. There had effectively been no growth. That's not acceptable. People had lost confidence and ambition. They had lost the sense of what Heinz could be about.'

Surrounded as we are by piles of 'product', from baked beans to baby food, tomato ketchup to Worcestershire sauce, there seems little chance of a repeat of such corporate amnesia. 'Some people,' he adds, 'not everyone, but too many, were only here for the pay cheque.'

That's pretty straight talking but, make no mistake, Heinz's situation was grave. The company that practically invented the tinned-food market in the 20th century - the first cans of Heinz Baked Beans went on sale at Fortnum & Mason in 1886 - found that the rug was pulled out from under it in the 21st. The reversal of fortune was abrupt - in 1998, Heinz was riding high, profitable and voted one of the 12 top brands of the late millennium, alongside the likes of Coca-Cola, McDonald's and the BBC.

But the firm was a victim of its own success and trouble was brewing, in the shape of fierce competition from deep discounters like Aldi and Lidl on one side and, on the other, the increasingly aspirational nature of new brands - fresh soups, cook-from-chilled ready meals, superior own-brand ranges: 'premiumisation', as it is known in the trade. There was even a threat to the iconic Bean. Sniffing blood, Premier Foods launched the Branston Bean range in 2005.

By the mid-Noughties, Heinz was in 57 varieties of trouble, sales were stagnating and the company's reputation was on the skids. No longer was Heinz an automatic destination for the best and the brightest - they wouldn't touch it with a bargepole. Yes, it still had market share - 78% of tomato ketchup and 46% of baked beans in 2004 - but, as Woodward points out, this is a game where growth is God and there hadn't been any of that for quite a while. 'This time a year ago only 37% of our portfolio was growing share by value; we were effectively diluting.'

So, has he fixed it? Yes seems to be the short answer. 'This is a very different company from the one I joined 18 months ago. I have put in a platform for sustainable growth by focusing on three key areas: strategic, systemic and cultural. We've now got high single-figure growth - 87% of the whole portfolio is growing. Sales are up 18% across Europe, and the UK and Ireland are by far the biggest markets in Europe.'

At the heart of his strategy, he says, is 'consumer-driven innovation. We are focusing on four main areas of insight.' These are: 'health and wellbeing' (low-fat, low-sugar, low-salt), 'insecurity' (food scares and terrorism), 'the fluid society' (more single-person households, fewer family meals) and the aforementioned 'premiumisation'. Yes, in case you were wondering, he does come from a sales background.

He's getting into his stride now, revving up the energy and enthusiasm as we stray ever deeper into the alternative reality of the packaged food business. This is a world in which the usual rules of business apply, only expressed in colourful professional jargon. So a phrase like 'we have been able to re-allocate a significant amount of our cost base into innovation and marketing' translates as: 'We have 8% fewer people than we did this time last year, and we're using the money saved to spend 65% more on marketing and R&D.' That sounds pretty sensible, once you get to the bottom of it.

His delivery - the product of years of some of the best sales training that money can buy - is slick. His tone is even and well modulated, the influencing techniques - eye contact, repetition of key messages, empathetic body language, sparingly applied smile - all present and correct. Doubtless, he goes down a storm in a room full of eager execs, but in a conversational setting you sometimes feel like you're on the receiving end of a textbook study in persuasion. It's powerful stuff, though - the training works.

Talking of innovation - sorry, R&D - the core soup and baked bean businesses have been the focus of frenzied activity. The cry has gone out for additional ranges and improved 'formulations' (recipes); the baked bean sauce is more tomato-y and three new kinds of soup are on offer.

The search has been on for new products displaying 'great food credentials'. I think that means something that tastes good and hasn't got too many nasties in it. So there's a new 'wet' range of one-pot pasta meals called Big Eats - 'very much in the same territory as pot noodle but it's actually pretty good for you. All the ingredients are carefully sourced for taste and consistency, even though it costs us more,' he says.

Most mould-breaking of all, the Heinz Bean itself will shortly be appearing in a store near you clad not in its time-honoured but slightly dowdy tin overcoat but in a slinky, yogurt-style container called a Snap Pot. This modest piece of plastic may well turn out to be the biggest thing that's happened in beans since the haricot. It's a pack of four microwaveable single portions, designed to cash in on two telling pieces of market research - sorry, 'insight'. One, apparently there are people out there for whom the thought of washing a pan after heating the contents of a tin is just too much like domestic slavery. Two, the single serving obviates the old dilemma of what to do with the rest of the beans in the tin. Eat them and there's more on your plate than is good for you; keep them and you just end up throwing them away a week later when there's mould growing on the top. And yes, the plastic is recyclable.

There's also 'Bloke's Beans', beans with added extras and ribald branding that recalls the '50s seaside sauciness of a McGill postcard: 'Big Saucy Bangers' (with sausages), 'Beanz with Balls' (meatballs) and 'Red Hot Balls' (spicy meatballs). Aimed at young single men, they have been a surprise hit with the other half of the population. 'We sell more of them to ladies than men. People love them, but the humour would only work in the UK. The Americans don't get it and nor does anyone else,' says Woodward.

This spurt of inventiveness has spread across the entire Heinz portfolio, which now ranges from the familiar ketchups, soups and sauces - including Lea & Perrins and HP - to baby food ('infant feeding') and Alphabetti Spaghetti. Low-sugar and low-salt, sauces with healthy Omega 3 oils added, 'top-down' bottles, new flavours and a whole raft of fresh ideas mean that 'there have been 115 pieces of NPD (New Product Development) across the portfolio,' he says, 'with 60 or 70 more due in the next 12 months.'

And after a few years in which they did steal market share from Heinz, he says, those upstarts from Branston have been beaten fair and square. 'They very successfully woke up the giant. Now we have a record share in beans.' Premier Foods has disputed these claims. But whichever figures you believe, Heinz is the clear market leader.

It's the Snap Pot that has got Woodward's juices flowing. He sees it as a bellwether for how far the firm has come under his control. 'If someone had suggested this two years ago, the reply would have been: no, we can't do that, we're all about cans. Well, now we've done it, and the spin-off possibilities are endless.'

For such a driven man, the view out of his office window is unexpectedly bucolic. Acres of landscaped grounds frame an elegant, understated concrete-and-glass low-rise building dating from 1960. The traffic-choked subprime suburbia of west London seems miles away; until recently, cows grazed the park and would occasionally have to be shooed out of reception. Woodward's desk, however, faces inwards. He is not, you suspect, someone with attention to spare for such sylvan distractions.

Born in Germany - his father was in the RAF - Woodward had what he says was, by Forces standards, a fairly stable childhood, living there and in Holland before being sent to school in Britain - Dauntsey's in Wiltshire - at age 11. Nonetheless, it seems to have left him with a slight rootlessness, or at any rate a readiness to relocate, that many service kids share. 'I've moved about more for work than I did as a kid. I've lived all over the UK, and in Europe, too.'

Married, with two teenage kids, he lives in Wokingham and is in the process of renovating a second home in Dorset. Does he enjoy getting his hands dirty? 'No, I'm not a bricklayer,' he laughs. 'I take on more of a supervisory role.'

At school, he was an 'all-rounder' - good academically, sporty and musical; at one point he was the singer in a punk band. He may even have had a mohican and a safety pin through his nose, but won't confirm the rumour.

What's abundantly clear is that he was a confident and assertive youngster who knew his own mind. When he finished his A-levels he went straight to work as a management trainee for the John Lewis Partnership. He avoided university out of choice, and says this early start on the greasy pole explains his relative youth. 'It wasn't a money thing. I just knew I wanted to go into management. I was confident in my own abilities - and extremely ambitious, of course.'

His career has been an A to Z of top names in retail and FMCG. From John Lewis (he had offers from M&S and Sainsbury's too) he moved to Mars (which has also nurtured the likes of Allan Leighton and Justin King), spending a few years learning brand management and sales before heading off for a near 10-year stint at Coca Cola. Here, he rose through the ranks of the sales department to become a trading director, before leaving to join Gillette in 2001. 'The business was struggling so they put in a new board in the UK. I was sales director. Then when Procter & Gamble bought Gillette, I was one of the first three senior Gillette people to go over to P&G.'

It's a catalogue of successful growth-creation and you can see why the Heinz bosses - including the top man himself, Bill Johnson, the triple-barrelled chairman, president and chief executive - were eager to snap him up.

The firm has always had a strong marketing tradition, retaining the native flair of its founder Henry J Heinz. The Heinz '57 Varieties' slogan, which he coined in 1888, is one of the best known and longest established corporate straplines in the world, although closer examination reveals a bizarre and slightly baffling tale.

The story has it that Heinz was influenced by an ad he saw in New York for a store offering '21 styles' of shoe, and settled on the magic number 57 more or less at random. He was keen to include the number seven, apparently because of 'the psychological influence of that figure and of its alluring significance to people of all ages'. Umm, OK, if you say so. And, given that the firm offered many more than 57 products even at the time, it's technically a lie, if a white one.

It certainly looks decidedly hokey from the modern, authenticity-obsessed marketeer's point of view, but there's no denying that old Henry knew what he was doing. The slogan is so well recognised that it has entered the language as slang for everything from a mongrel dog to a complicated multi-way bet on the horses.

Here in the UK, it has its own grand marketing tradition. The adline 'Beanz Meanz Heinz' first appeared in the 1960s and has been around - bar a few misguided years of absence - ever since. They even spell Beanz that way on the tin these days, to the exasperation of grammarians. Other campaigns for similarly iconic Heinz products - tomato ketchup, tomato soup, even sandwich spread - have been just as effective and almost as memorable. When the firm hinted some years ago that declining demand could mean an end to Salad Cream production, the resulting outcry - and sales surge - was big enough to have sceptics suggesting the whole thing may have been engineered that way in the first place.

Perhaps the most convincing evidence of the power of Heinz advertising is the fact, attested by numerous surveys, that the vast majority of British consumers think Heinz is a British brand. 'Some of them thinks it's German,' admits Woodward. 'But hardly anyone puts it down as a representative of big corporate America.'

In the early 2000s, it was the power of that brand among consumers that saved some of Heinz's most vital relationships - those with the big supermarkets. In the UK especially, competition for shelf space and the best-selling positions, at eye-level and on the so-called gondola ends of the aisles, is savage. But even in the firm's darkest days, consumer demand for staples like beans, sauces and soup kept the brand front and centre and saved it from a much more catastrophic sales collapse.

But the stores' loyalty was wearing thin by 2006 and Woodward had to work hard to get them back on side. 'They said: "Cans are declining, Dave. Why should we give more space to them?" We had to invest and demonstrate it was worth it. Now we have been identified by one of the major multiples as one of the brands with the most growth potential over the next three to five years, in the same camp as firms like Procter & Gamble. We feel pretty good about that.'

However, his rash of marketing wheezes has not been without its clangers, as the recent controversy over Heinz Farmers Market soups demonstrates. The Farmers Market range was conceived as a nifty way of taking the humble tin of soup upmarket and grabbing some business back from posh rivals like Covent Garden and Duchy Originals. One of the biggest reasons the average British store cupboard doesn't contain as many tins as it used to is the rise of premium chilled fresh produce like soups and ready meals. But if it was a clever idea to cash in on the trend - and the fact that the name was not legally protected - the execution soon ran into trouble.

The increasingly vocal farmers market movement was more than a little miffed, for a start, the National Farmers Market and Retail Association calling for a boycott in October. But potentially more damaging for the Heinz brand was the danger that its target consumer for this product might take issue with the fact that no particularly locally sourced or produced food was used in the soups. The firm denies this, saying that it's only the NFMRA people who have a problem. But the labelling has been changed slightly and a commitment has been made to 'try' to source produce more locally.

Woodward has also been busy dismantling the firm's old-fashioned, top-down leadership structure and putting systems in place to encourage everyone to share their ideas. The new Hidden Veg range - which has an extra dose of pureed vegetables added to each tin to help parents get reluctant kids to eat more vegetables - was based on a suggestion made by a team from HR.

He's delighted with this demonstration of egalitarianism, although what the people whose full-time job it is to have new ideas made of the HR department's intervention is not recorded.

The 400-odd staff at HQ work in an open-plan, 'and open door, too', environment with little hierarchy. 'It's a very different leadership style than the one which existed here before,' says Woodward. Access to the big guns in Pittsburgh is available when he needs it too. 'It's not unusual for me to get a call from Bill (Johnson), wanting input or offering a challenge. But it's a two-way thing. I can call him if I want to. That's not always been the case in other firms I've worked for.'

Most of Heinz's workforce are factory staff, specifically at the giant, eco-friendly Kitt Green baked bean plant in Wigan, which employs 1,400. 'It's massively important to get out into the organisation - and not just to be seen. People see through the press-the-flesh mentality very quickly; they want to know that you understand their part of the business. Factory visits used to be carefully stage-managed, but now I just go out onto the shopfloor and ask people what they think. They are very direct, I can assure you.'

But, undoubtedly, his biggest factory-related headache so far has been the HP sauce crisis - Heinz bought the brand in 2005, closed the factory in Birmingham, and moved production to Holland. 'I picked up on the integration of HP, although it wasn't my acquisition,' he says feelingly, before adding, Reggie Perrin style, that 'it coincided with explosive growth in Tomato Ketchup plus a hot April which sent Salad Cream through the roof'. Sounds pretty messy.

Despite a good deal of vocal opposition - including questions in Parliament - he's unrepentant. 'HP has now achieved its highest share for 25 years. It's a British recipe and a British institution, but the consumer is more concerned about quality and price than where it is made.'

He's pretty happy with the journey so far, and pleased to dismiss any suggestions that the can is dead. 'People think cans are old-fashioned, but they don't have to be. Volumes are rising in ways that some people thought were impossible, and cans will be with us for generations yet.'

The UK and Ireland business is worth about $1.5bn and he aims to grow it at a sustainable 8% or 9%. But he warns that the future will not be plain sailing. 'We've got commodity headwinds coming on the prices of fuel, wheat, dairy and meat. The UK is a challenging market.'

Delia Smith will be doing her bit to help. The queen of TV cooking is set to make a comeback, and her series will show her using some shop-bought shortcuts - including Heinz sauces.

Like a good father, Woodward tries to be generous to all his children, but ask him to pick a favourite and he plumps for the bean. What would generations of kids have done without beans-on-toast for tea? But his partiality is not only a matter of taste, it's also a question of potential. 'A year ago there was just beans. Now we have four or five spin-offs, including Snap Pots and Bloke's Beans, and half of our growth is coming from the base (beans and soups) business.'

Can they keep it up? Woodward thinks there's plenty of life left in the bean yet. Leaning forward conspiratorially, he says: 'There are dry snacking opportunities in beans. Watch this space.' You read it here first.

Three challenges facing woodward

1. To persuade a generation brought up on Jamie Oliver and Nigella Lawson that canned food can be funky

2. To continue expanding the Heinz portfolio into new markets and categories without damaging the firm's most valuable asset - its brand

3. To get greener but stay focused

WOODWARD IN A MINUTE

1965: Born in Germany to Forces family. Educated Dauntsey's School, Wiltshire

1981: John Lewis Partnership management trainee, working for Waitrose

1988: Mars, various brand management and sales roles

1991: Rises through sales at Coca-Cola to become trading director, grocery

2001: Joins Gillette as group sales director, UK & Ireland. Promoted to vice-president for strategy and innovation, Europe. Becomes sales director of merged businesses when Procter & Gamble acquires Gillette in 2005

2006: Joins Heinz in June as president, UK & Ireland.

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