As a result, “the consumer products industry is facing a serious talent shortage,” says David Youngerman founder of Georgia-based recruitment firm Youngerman Search Partners, which specializes in finding talent for small and mid-cap CPG firms and their private equity backers, especially in the natural and organic arena.
“Demand is real high for talent right now but the challenge is that it’s become harder and harder to find who I want,” Youngerman observes.
“The CPG business is not perceived as that sexy. People coming out of the top 20 business schools don’t see CPG as desirable as it used to be versus healthcare, consulting, technology, and investment banking.”
The CPG business is not perceived as that sexy
So what is lacking in the candidates?
“Don’t get me wrong,” Youngerman tells FoodNavigator-USA. “Some of the young superstars that are out there in this business – usually the entrepreneurs that have started their own businesses - are better than they have ever been.”
But when you are seeking to hire a top-notch VP of sales or marketing to take your growing food and beverage business to the next level, the talent pool can lack depth, he says.
“A lot of candidates I see are very smart, very bright people, but they are not street smart; they don’t really understand what it takes to make things happen at the store level; they feel happy if a concept becomes an idea. It sometimes seems as if there is a whole generation that’s lacking in the fundamentals.
“So my advice to CEOs is keep networking, always keep a shortlist of superstars you might need to reach out to at some point in future.”
When you go into a meeting with a buyer you have to be able to back up your story with data
But why is there a shortage of great candidates?
In part because the big CPG companies such as Nestlé, Kraft, P&G, PepsiCo and General Mills are not devoting as much time and money to training graduates as they used to do, he argues.
“P&G used to bring hundreds of kids a year into its selling organization; you would start as a sales rep, then you might get a larger account, then manage a team of reps, and then maybe go to headquarters in a trade marketing role and find out how the big machine operates, so you’re ticking all these boxes along the way and getting all that experience.
“Now with all the consolidation in retail, the selling is all done at headquarters and big CPG firms don’t need to bring on as many people that they used to do. Look at companies like Coca-Cola and PepsiCo; they employ far fewer people now. They got too big and now they are trying to downsize.”
The skillset required in the sales and marketing function is also changing, he adds.
“A brand manager these days must be able to communicate with consumers via guerilla marketing and social media as well as traditional ad campaigns, while the sales function has become much more analytical with category management and shopper marketing. When you go into a meeting with a buyer you have to be able to back up your story with data.”
Candidates were saying I’m tired of this big company stuff, I want to find a smaller gig where I can make a real impact
While he does the occasional president and CEO search, Youngerman is primarily helping firms find sales and marketing VPs, category and brand managers and other ‘functional leaders’, he says.
“I kind of stumbled into this part of the market 15 years ago [after working in recruitment for several years] as my candidates were saying I’m tired of this big company stuff, I want to find a smaller gig where I can actually make a real impact. And if you really want to do that you pretty much have to leave big cap.
“Real a-list players often gravitate towards the small and mid-cap as they can get in there and put their signature all over these companies.”
Entrepreneurs don’t always know how to go from a product to a brand
So when do these smaller companies typically choose to hire senior team members? And what kind of candidates are the best fit?
As to the timing, “Recruiting a VP of sales usually happens when the owner realizes that I can’t do all this selling, and run the business,” Youngerman says.
Not long after, some entrepreneurs also have to acknowledge that they “make great products but don’t always know how to go from a product to a brand”, and need a marketing professional, he says.
But do these small firms have the money to attract serious talent? Not really, he says, so they have to gamble.
“It’s a risk for both parties [recruiting a seasoned sales professional is extremely expensive for a small company] and it takes a lot of courage. In many cases the owner will need to offer more money than he or she is earning to attract the right person.”
Find the best available athlete rather than a position player
As for what Youngerman is looking for when he meets a potential candidate seeking a VP of sales in a small to mid-cap company, “It’s not just about matching a resume to a job description, it’s about matching personality to company culture,” he adds.
“Most of the time I wouldn’t take someone straight out of PepsiCo and put them in a small cap snacking company as it’s too big of a shock to the system. The ideal candidate is someone that grew up in a large cap training company like PepsiCo and then went from there to a smaller company. And that's when you want to take them on.”
While most clients want someone with some category knowledge it is preferable to “find the best available athlete rather than a position player,” he says.
Compensation in CPG
“Pay rates in the consumer products industry are fairly conservative,” says recruiter David Youngerman. “But I will say that some of the private equity involvement that’s in small cap CPG has allowed a small fraternity of people to become very wealthy.”
As for qualifications, “If they are looking for a marketing leader, nine times out of 10, they want an MBA from a top school,” he says. “For a VP of sales, an MBA is a nice to have but not a must-have.”
Millennials have a general distrust of big companies
But what about what candidates want?
That’s changing, in part because Millennials and boomers just don’t think about work in the same way, he says: “When their parents left school their mission was to get a good job with a good company; Millennials want to do what they want to do and love it right out of the gate.
“They also have a general distrust of big companies and a different set of priorities than baby boomers. When it comes down to it, and you ask who do they trust? The answer is themselves.”