The MT Interview: Todd Stitzer

The first foreign boss of Cadbury Schweppes, Todd Stitzer is a regular, all-American guy in charge of a very British business. But as a go-getter with a social conscience, he's really from the same mould as the firm's Quaker founding fathers. And not bad at marketing, either.

by Chris Blackhurst
Last Updated: 31 Aug 2010

Todd Stitzer bounds into the room. Tall, powerfully built, hair combed just so across his forehead, wearing a blue shirt, white collar and light suit, he seems familiar.

He's like every American businessman you've ever met or seen or read about. If he picked up an American football and threw it at you, quarterback-style, you wouldn't be surprised. He's the real article, is Todd, starting with his name, then taking in his attire, his erect bearing, his full-on way of looking at you when he's talking, and his delivery (long sentences containing words like 'functionality'). His career, too (yes, he was once a tennis pro).

If he said he was a college athletics coach, you'd believe him. If he said John Grisham had based one of his characters on him, you wouldn't bother phoning the author to check. If he was an earnest member of the White House staff, that would figure also. If he said he was the head of Cadbury Schweppes in North America, you would nod your head in appreciation. Since we're meeting in Cadbury's Berkeley Square headquarters and we're surrounded by the sort of brand point-of-sale promotional material that would grace any Fifth Avenue advertising agency, this last option is the most likely.

Actually, though, this all-American isn't just in charge of North America; he's Cadbury's boss for the whole world.

It's tempting to think in this age of globalisation that all our major home-grown businesses are run by foreigners. But on the whole, the boards of British companies are still dominated by Britons. Some sectors, notably banking, are more prone to overseas influence. In others, it's rare. Yet there are some organisations that just seem so British - in their history, their tradition, their culture - the idea that they might be run by a CEO who is not from these islands seems inconceivable. Cadbury is one such corporation.

Founded by Quakers in the Midlands in the early 19th century, it exudes Britishness. From the evocative brand names like Dairy Milk and Bourneville, to the communities that look to the company for employment, to the paternally philanthropic attitudes passed down by its founding fathers, Cadbury is embedded in our national pysche. Cadbury's sweets are up there with Clark's shoes, Marks & Spencer stores and Rolls-Royce engines as products that will be forever British.

Some chocolate companies might be taken over by foreigners, as Rowntree was by Nestle. Others might pursue global domination based on aggressive marketing, as Mars did. Cadbury, though, was different. It was an altogether gentler, more civilised place. While brash, ambitious Mars executives basked in the glory of their confectionery bar penetrating the far reaches of the earth and revelled in the toughness of their training schemes, their British rival offered a marked contrast: run by public-school types who cultivated a smoother, more urbane air.

That is not to criticise Stitzer's predecessors. Sir Adrian and Sir Dominic Cadbury, Etonians both, didn't rest on the past. Neither did former chief exec John Sunderland, now Stitzer's chairman. They pushed the family firm on, continued to grow overseas and took the business into new areas. Under their stewardship, Cadbury Schweppes became a multinational corporation, responsible for some of the biggest labels in food and drink.

It went from a successful but slow British chocolate-maker to finely honed, smart seller of mega-brands like Dr Pepper and Seven-Up. Whereas once it had been locked in a domestic dogfight with the likes of Rowntree and Terry's, it was now pitching head-to-head against Coca-Cola, Pepsi and Mars.

The appointment of an American go-getter is a continuation of this process. Nevertheless, Stitzer's crowning in 2003 was a shock: he's not British, he's not a Cadbury, he's not a Sir, he didn't go to Eton. Not to tick one of these boxes might count as a tremor; for all four of them to be blank is a full-blown earthquake.

When the identity of the new chief was revealed, there was surprise on another level. Favourite to land the post - as far as the City and the industry were concerned - had been John Brock, Cadbury's chief operating officer. He was the clear number two to Sunderland, was the second-highest paid executive after the CEO and seemed to be a shoo-in for the job. He was four years older than Stitzer and seemed to have the breadth of experience required. Stitzer, in charge of strategy and from a legal rather than a marketing background, was not at the top of pundits' lists.

But here he is, just over a year into the role and seemingly enjoying himself. How did he do it? How did the kid from small-town America claim the number one job in Cadbury? You can't imagine a Brit getting the chance to run Hershey's, yet here is Stitzer, lord of all he surveys.

Several things strike you on meeting him. There's his meticulous appearance and manner, and his tendency to use management speak. But there's also his relaxed charm, clarity of vision and solidity. He has the assuredness of someone who had a good upbringing, who was indoctrinated with sensible values and morals. He also has that easy confidence of the damned good sportsman, the boy who could play a lot, who had a gift - in his case for hitting a tennis ball.

'I had a middle-class American childhood,' he says. 'My father was a YMCA director, my mother was a nurse.' This means that at an early age he was taught the importance of giving and of serious thought. His family cared for others and had strong Christian beliefs - not unlike the founding fathers of Cadbury's, in fact.

Stitzer and his brothers were the sons of a preacher man, moving to New Jersey and New York when his father's ministry took him to a new YMCA centre. His family could trace their roots to Germany and there's no doubt the Germanic love of orderliness has been passed down to him. So too, has the YMCA approach to life, of clean living, decency and faith. It's impossible to conceive, for instance, of Stitzer the couch potato.

'We were taught to study to show thyself,' says Stitzer. 'We were challenged always to be the best we could be.'

He has instilled the same doctrine into his own children. Parker, his son, has just gone to Harvard; Kate, his daughter, is at Simmons College in Boston. 'They're very good athletes, they're great people, they're the best,' says their father. When they were children, living at home, they were encouraged to spend at least two hours a day in some sort of sporting activity.

There is no glimmer of this being said tongue-in-cheek. To a Briton, used to understatement (and underachievement), this sort of boasting is anathema. We don't talk this way and, in the main, we're not this competitive. Stitzer, though, can't help himself: it's in his blood.

He did himself and his parents proud by going to Springfield College, the training ground for future YMCA and aid workers in Massachusetts, then switching to law at nearby Harvard. 'I had an uncle who was a small-town lawyer in upstate New York and I admired him a lot.' (Straight out of John Grisham.) 'I thought the combination of skills required of a lawyer were right for me - writing, thinking and verbal skills - plus lawyers did a lot for the community.'

Then, displaying characteristic dry, wry wit, he adds: 'Mind you, I then went on to do M&A work in a big-city firm, so I'm not sure about the last point!'

It was quite a tussle, choosing between law and helping others through the YMCA. 'I had a strong interest in the social helping professions, what with my family background. There's a huge connection, however, with Cadbury Schweppes, which has a heritage of caring about people and of community and of the greater good. My background and mindset fit with everything Cadbury Schweppes stands for.'

He could also have been a professional tennis player, perhaps on the lower reaches of the tour, certainly as a coach. He learned from his own father ('a great tennis player') and gave lessons to pay his way through law school. Did he think of playing competitively as a pro? 'My father advised me you can only walk and talk at tennis for so long. After that, you've got nothing.'

From Harvard, he joined Lord, Day & Lord in Manhattan, specialising in corporate and securities law, mostly in M&A and financings. Among his assignments was advising the New York mayor on the restructuring of the city's then massive $3.2 billion debt. A law firm like his, he says, conformed to the 'Marxist theory of surplus value - the associates worked very hard, the partners made all the profits'.

Being in a heavyweight New York firm, was 'a tremendous training ground for the application of practical legal thought to the business world'.

But it wasn't enough. 'I could have stayed and pickled in M&A. I liked mergers and acquisitions. I found the work interesting.' Another opportunity presented itself: Cadbury offered him a job as assistant general counsel for the US.

Stitzer knew Cadbury well. Lord, Day & Lord was its lead New York law firm and Stitzer's partner looked after its account. Stitzer had advised the management and liked them. When they came calling, three factors weighed on his mind. 'One, I admired the company and had always thought it a great place to work. Two, for three years in a row I'd been billing more than anyone else but my pay had stayed the same. You could say the reward recognition quotient was not in my favour. Three, it seemed like an intelligent lifestyle decision to take a job with a different perspective on business.'

There was another influence. He and his wife had just had their first child and the crazy hours he was working were losing their appeal. 'My wife used to call them "Lord, Day & Night" - I was there all the time.' The firm told him he was 'five years through an eight to 10-year journey, as they described it, to become partner'. He told them, politely, where to stick it and quit. His leaving present was a photo session with the Mayor of New York, Ed Koch.

He moved the family to Connecticut - the place he still calls home - and settled into a more leisurely suburban life. Cadbury let him go in early in the morning and leave in the late afternoon so he could help with the baby, something unheard of at his previous employer. It wasn't long before his constant quest to better himself kicked in. 'I had an intellectual curiosity about doing something different on the one hand, and Dominic Cadbury, the development director, as boss on the other. Dominic said to me: What do you want to do when you grow up? He also said: You can't get on at Cadbury Schweppes unless you've been in sales and marketing. I had to do it, I had to make a move. I became head of marketing for US beverages, and I did some M&A. I took a chance; it was very exciting.'

He found himself in charge of 25 to 30 bright young marketing people.

'I had to run at 120 miles per hour in order to keep up. I adopted the firehose method of management - I stood with my mouth open and they poured into it.'

Listening to Stitzer like this, his appeal is obvious. There's an openness and honesty about him that is endearing and engaging. It's a pity, though, that he allows this straightforwardness to be clouded by the sort of management gobbledygook that can leave the listener cold.

His CV, for instance, as supplied by Cadbury, contains phrases that are simply mind-boggling and meaningless. As deputy CEO, for example, he launched the group-wide Fuel for Growth initiative 'to examine group cost structure with aim of creating value for shareholders and funds for brand investment'.

As chief strategic officer, he created a group strategy and development team 'to provide experience based, action orientated strategic solutions for business development'. He 'designed and assembled Cadbury Schweppes Global Innovation team in early 2002 to provide greater focus on "Big I" innovation, instituted a consistent innovation process across the group, ensure the transfer of insights, ideas and best practice and eliminate duplication'.

There are pages of this stuff full of 'synergies' and 'functional and indulgence platforms'. You want to beg him to speak plain English. Oddly, that is what he does a lot of the time. He loves his slogans, for instance, and they are catchy. 'Fuel for Growth' is one, 'Smart Variety' is another.

While these may cause cynics to chortle, there is nothing wrong with them - they serve their purpose to concentrate employee minds and to motivate.

And this is the same person who put this instruction on badges for staff at Dr Pepper: 'Sell more soda, make more money'. You can't get more to the point than that.

In America, excess verbiage may be acceptable and commonplace. It isn't in Britain. For the head of a FTSE-100 company trying to win investors' approval, such language can leave the speaker open to ridicule and hostility.

What seems to happen with Stitzer is that he's serious and thinks carefully and deeply about things - so carefully and deeply that sometimes the results can hurt. It's worth remembering, too, that he's a corporate lawyer by training. He was taught that no word can go unchecked, no statement can go without being fully defined.

Overall, his time as a lawyer, he says, is a boon. 'The legal world teaches you to think in a synthetic way, to take disparate strands and thread them to form a logical solution.' Running a business, he argues, is similarly creative, except that he's taking different experiences and models that may come from outside his own industry and distilling them into a plan for managing the whole group.

For 20 years, from 1983, when he left legal practice, he worked his way up through the management ranks. Throughout, he remained focused, his eye always on the main prize. He gave up the chance to be a partner in a leading New York law firm, but he didn't go to business school to study for an MBA, preferring to learn on the job. He made a sideways move from executive VP, marketing and strategic planning, to executive VP, sales & marketing - not for more money but to add to his knowledge and to further his career.

His elevation, he says, is proof of the inclusiveness of Cadbury's. 'We want to develop people who are willing to take the chance and who want to broaden themselves. If you want to develop and prove you can succeed, this company will challenge you.'

The senior team have, like Stitzer, been at the firm for years. Sunderland is there as chairman with a safe pair of hands. Stitzer's style is to consult, to seek advice, then to act. He is not an autocratic leader.

The Cadbury family are hovering as well. 'They are there very much in the positive sense,' he says. 'We all want to do what is right for the company, for its people, for the community, for business in general - it's what differentiates Cadbury Schweppes from other great companies.'

He claims not to think of himself as an American off-comer. He's a product of the firm's development system who has been with the company 20 years. 'I know a lot of our people in a lot of locations,' he says.

Cadbury has grown big in the past two decades, mostly by acquisition.

The latest, the purchase of Adams from Pfizer for $4.2 billion - a deal managed by Stitzer - has made it the world's largest confectionery group. In chocolates and sweets, it's first or second in 23 of the 50 biggest markets. In beverages, Dr Pepper puts it third behind Coca-Cola and Pepsi. Stitzer sits at the head of an empire that employs 50,000 people (it was 55,000 but he has cut 5,000 jobs) in 130 factories. His main task is to make the whole lot more efficient, to bring costs down, to produce funds to reinvest - all the time keeping ahead of competitors. 'We've got to integrate Adams. We must generate organic growth on a consistent basis. We've got to generate more cash for investment in marketing.'

It's no small order, and it's not helped by the baggage of history. 'We have a responsibility to the heritage of the company and to the communities where we're located. And we also have a responsibility to the share owners.'

Would he like to base more production overseas to take advantage of lower labour costs? 'Of course we want to be competitive, but neither can you kill the goose that laid the golden egg.'

While he's busy integrating Adams, he has to continue the fight against the supermarkets and their own-labels. Holidaymakers across Europe were not the only ones to have a miserable summer - the rain took the fizz out of Cadbury's drinks sales, forcing it to issue a trading statement to the effect that profits would come in at the bottom end of targets.

However, the City was reassured by bullish comments that overall growth targets would be met, and the blending of Adams was progressing smoothly.

Cadbury's warning followed others from Coca-Cola, Nestle and Unilever.

While each company could point to reasons for its profits fall, concern is growing that the weather masks an underlying problem: own-label is eroding their business. Cadbury has not been as badly affected as some, but the warning signs are there.

The City has already made up its mind, putting Cadbury on a similar p/e ratio to Nestle and Unilever, both of which are suffering. One of Stitzer's key tasks is to convince the City that his company really is different.

He also claims not to be alarmed by a growing lobby blaming companies like his for spreading obesity and for promoting unhealthy eating. 'Confectionery accounts for less than 2% of people's diets. Obese people don't eat more confectionery than average people. For most people, confectionery is a treat and they use it as a treat. Chocolate consumption has not increased with the rise in obesity.'

He rattles this off with aplomb. His answers are rehearsed, but no less robust for that. The holy grail he admits, is sugar and fat-free chocolate that tastes as good as the real thing. Like the rest of the industry, Cadbury is working on it. 'There are some interesting propositions, but we're not near to a breakthrough.'

Until then, he will continue to argue the case for the current product.

'We're doing more portion sizing, we're making big bars which are more shareable. We believe confectionery has a place as part of a balanced diet.'

Stitzer hands me a box of Cadbury's newest product, Snaps - a thin chocolate crisp. It's to show that Cadbury may have old favourites like Flake, Crunchie and Dairy Milk, but new lines are coming through. Things are progressing, quietly. 'You can change the perception of something that is seen as old and mature. We don't go out and seek credit for it - we're a world-class company that has got a job to do.'

Stitzer was chosen, you realise, because he has a bit of everything: the American (more than two-thirds of its business is in the US); the time-served employee; the ambitious; the humble. This is him on people hoping to work for Cadbury: 'Lots of people want to join us. We take refugees from other companies and when we do, we synthesise them into the Cadbury culture - we tell them about our heritage, our aggression, our inner confidence, but not bravado. We're very English, we're quietly confident and believe in letting our actions speak for themselves.'

He says all this with an American accent and a straight face. He believes it and he wants you to believe it. So far, there's no reason to doubt him.

He's loving his job - 'the ultimate team sport', he calls it. What keeps him awake at night?

'The one thing I've not thought about,' he says, smiling. You get the feeling that Stitzer sleeps very soundly.

- If you'd like to hear presentations from Todd Stitzer, Gavin Neath, chairman of Unilever UK, and Gordon Hurst, FD of Capita - to name but three - come to the MT Summit at London's Waldorf Hilton hotel on 1 December 2004 (www.mtsummit.com)

FOUR TOUGH CHALLENGES FACING STITZER

1. As head of a major manufacturer of branded goods, how will he meet the own-label challenge of supermarkets in the long term?

2. Will he continue to make adjustments in marketing methods and portion sizes to allay the concerns on obesity?

3. Will further acquisitions make Cadbury Schweppes unwieldy?

4. He gets on well with the Cadbury family, but would he fight his corner if they disagreed over an important issue?

STITZER IN A MINUTE

1952: Born 10 March, 1952. Educated Ridgewood (New Jersey), Springfield

College and Harvard University

1978: Joins New York law firm Lord, Day & Lord as associate attorney

1983: Joins Cadbury Schweppes as assistant general counsel

1991: Made group development director, Cadbury Schweppes, in London

1993: Moves back to US as VP, marketing and strategic planning

1995: COO, Cadbury Beverages, North America

1997: President, CEO of Dr Pepper/Seven Up Inc

2000: Chief strategy officer, joining Cadbury's main group board

2003: Made CEO, Cadbury Schweppes.

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