Chobani's Peter McGuinness explains the new org chart: ‘To me, having a separate sales department is archaic’

Peter McGuinness, a high-profile ad exec brought in as chief marketing and brand officer at Chobani in 2013, now sits at the helm of Chobani’s new Demand Department (he’s also known as chief demand officer), which spans product innovation, commercial marketing, creative & branding, demand operations, demand solutions & research, demand finance, channels, retail/grocery, and ecommerce. Speaking to us after a company get together in Chicago to discuss the new org chart, McGuinness said the restructure came at a time of double-digit growth, but reflected the company’s “ restless ” and “ entrepreneurial ” culture and willingness to push itself, despite its growing size (Chobani is now #2 in the overall US yogurt category and notched up revenues in excess of $1.5bn last year). “We want to push ourselves, and the best time to do that is when the going is good.” ‘To me, having a separate sales department is archaic’ On a more practical level, he said, bringing multiple functions together ensures that everyone knows what everyone else is doing, and people stop working in silos, he said. “There’s been a convergence of sales and marketing in this industry for some time… but in order to identify opportunities, you have to have visibility across all of parts of the demand department, including innovation and packaging and so on." He added: “If you think about it, a ‘sales department’ is legacy language. We’re all sellers, whether we’re developing a new product or coming up with a beautiful new piece of packaging, a TV ad, a social post or whatever it is, we’re selling something about the brand. “So to me, to have a separate sales department is archaic; it certainly shouldn’t be a department unto itself, it has to be integrated.” ‘We don’t have a sales budget and a marketing budget, we have a demand budget’ Aside from the fact that people in the departments reporting to McGuinness will be physically working more closely together in the company’s offices, they will also be drawing from the same pot from a budgeting perspective, he said, so that, for example, there won’t be the usual jostling over trade spending vs media spending and so on. “In the same way, we don’t have a sales budget and a marketing budget, we have a demand budget. If you’ve got all these different departments and budgets, you are never fully aligned no matter how many cross functional status reports and alignment meetings you call.” ‘ The regions are wildly different’ The sales function, meanwhile, is now split into West, Midwest, Northeast and South regions with their own marketing budgets, he said. “ The regions are wildly different. The north east is entirely different from the west for example, not only from a customer perspective, but from a consumer perspective, a messaging perspective, and a tactics perspective. “But we also recognize that from a channel perspective, whether it’s club, drug & c-store, natural, grocery, mass, value, and foodservice, we also have to come up with different propositions, as they all have different shelf sets, different customers and consumers, and they all define value differently. And that feedback has to be hardwired into the innovation process.” ‘They are happy with 1% growth… we’re not’ While many other companies are currently engaged in bouts of corporate re-engineering in order to cut costs and boost operating margins as sales decline, Chobani is expanding its team and enjoying double digit sales growth, he said. “Chobani is a growth company. We’re growing our teams, this is not a 3G exercise. We’ve made a lot of hires in the last three weeks and there is a pipeline of another 20-30 new jobs, so there’s a massive amount of investment in people in this demand department and we’re investing in growth. “ Our industry, if you look around at some of these companies, they are happy with 1% growth. We’re not. The theme of our conference was good isn’t good enough. That’s the Chobani way, that’s what makes us tick.” Early feedback on Chobani Smooth has been encouraging It’s very early days, but early data for new launch Chobani Smooth – the brand’s first foray beyond the Greek category – has been encouraging, he said. “ We’re still building up the distribution, and most of the customer and consumer programs we have in place will go in in late August and September, but we’ve talked to a lot of people and if you look at the social feeds, consumers love the product.” SKU proliferation, irrational pricing As for the overall yogurt category, the problems of SKU proliferation and “ irrational pricing ” remain, he said, but Chobani is outpacing the category. “ It’s pervasive, and it’s commoditizing the category … we want to bring back the wonder of yogurt. It’s nutrient dense and the narrative has been lost. “You see sweepstakes and heavy discounting and all these random small players coming in and out and all this churn and burn in the category. We need to get back to basics.” FOOD VISION USA 2017 Interested in how Chobani's new president and COO Tim Brown sees the future of the yogurt category? Head to FOOD VISION USA in Chicago on November 13-15 to hear from Brown and a clutch of other industry luminaries, from Campbell Soup VP, R&D, Americas, Jeff George and PepsiCo president North America nutrition, Seth Kaufman, to VMG Partners md Wayne Wu and Sir Kensington’s co-founder Scott Norton. Tim Joseph from Maple Hill Creamery will also share his insights on regenerative agriculture, grass-fed and organic trends in the dairy aisle... Check out our full list of speakers HERE .

Chobani's Peter McGuinness explains the new org chart: ‘To me, having a separate sales department is archaic’

Bringing sales, marketing, insights, product innovation and commercial finance under one new ‘demand’ department will help break down silos and make Chobani even more responsive to customers and consumers, the firm’s new chief marketing and commercial officer tells FoodNavigator-USA.

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