MY DOUBLE VISION GETS THE BEST OF ME

The other day I wrote about lack of focus at a corporate level, more specifically as it related to Sears. (click here to read)

Sears has announced plans to launch a video download service to compete with the likes of NetFlix, etc. My observation, and others too, is that this is far removed from their core business, and IMO, a major distraction for the company's management team.

In even more recent news, and from the perspective of companies re-focusing their efforts on core business practices, the Wall Street Journal wrote about Foodservice behemoth Sara Lee potentially shopping two of their divisions in an attempt to sharpen their focus.

Sara Lee's meat division and their foodservice beverage (coffee) division are apparently being evaluated for spin-off. Tyson appears to be interested in the meat division; and Nestle, which recently acquired Vitality Beverage Foodservice, may consider acquiring the beverage division.

I must admit, I have a personal interest in what happens to Sara Lee's beverage division. They, and Nestle, through the Vitality acquisition, happen to be competitors. In fact, Sara Lee dealt us a pretty significant blow late last year when Houston based SYSCO Foodservice Distributor announced that Sara Lee would be the single supplier for iced tea under the company's private label.

Until October 2010, several regional beverage companies manufactured and packed iced tea concentrates for the distributor. The decision to go solely with Sara Lee might have been a smart one as far as the distributor is concerned, but it significantly impacted the sales revenue for several beverage companies.

Now, it appears, the Sara Lee beverage division may not be under the Sara Lee corporate umbrella much longer. The parent company, following the resignation of their CEO for health reasons, is revitalizing its focus.

I am confident the decision to shop the beverage division was not made because the division is losing money. In fact, it's been said that division is one of the most profitable divisions at Sara Lee, valued somewhere in the $7Billion neighborhood.

Then why sell?

Running a beverage company takes the right personnel, both in sales and equipment; it takes a financial and time commitment to equipment because 90% of foodservice beverages are dispenser driven and dispensers need regular maintenance and service; and, it takes an understanding of the beverage distribution model, which is different from even your standard foodservice distribution model.

Nestle would do well to acquire the Sara Lee beverage division. It would immediately put them back in the drivers seat with SYSCO, picking up millions in potential annual sales. Plus, it would give them yet another recognizable foodservice brand in their portfolio.

It would of course make my life more difficult and my job more challenging, but what's life without a little more difficulty and challenges, right? Besides, from a visual perspective, Nestle would become the Goliath to our David.

Before someone misinterprets my comment, I am not saying our little company will (figuratively or otherwise) take out a multinational foodservice giant and one of the most recognizable brand names in the world...no, I'm not suggesting that at all.

All I'm suggesting is a Nestle/Vitality/SaraLee beverage company would be HUGE. As typical with most huge companies, there are limitations to how fast they can react and make decisions. (I compare it to an aircraft carrier trying to turn around while at flank speed...you measure the distance it takes to turn around in miles, not feet.). As a smaller company, with a finite number of shareholders, we are more "nimble" and can make decisions more rapidly. Our "focus" is more pinpoint, and hopefully more effective than a multinational foodservice giant.

No matter what happens with the Sara Lee beverage division, I can promise you my company will remain focused on our core business ... Foodservice Beverages ... and on our core principles: quality, customers, and value.

Now...can you tell me the release year of the Foreigner record that my blog title is based on? And how many times did it go platinum? (Without looking it up on Wikipedia) :)

HOW TO LOSE FRIENDS AND BECOME IRRELEVANT IN 30 DAYS OR LESS

Are you focused on doing those things you do well? No.

Don’t feel too bad. You’re not alone.

On December 28^th, 2010, (which in the digital age is an eternity ago, I know) Crain’s Chicago Business posted an article on Sears. Apparently, Sears announced that it would be launching a video download service. (Link Here)

The service (named Alphaline Entertainment) will allow users to download movies the day they are released on DVD or Blu-ray. Television shows will be available the day after they air, according to the article. Alphaline will be powered by RoxioNow, which according to people much smarter than me has been rejected by the bigger players because of technical issues and operational limitations.

Within minutes of the posting, Ken Leonard, of Leonard Associates, offered his thoughts on the decision. (Link Here)

Take three minutes and read his analysis. I think it is right on the money. And besides, he has one of the best quotes I’ve seen recently, “…always try to be the best at what you do best.”

Sears is in trouble. This is not news. They have not focused on what they did best. They are following industry trends (poorly) instead of doing what they know how to do well.

What does Sears do well? Well, my parents own a Kenmore washer and dryer set. I’m in my 40’s and the set is older than I am. Guess what? Both units still work.

I have a set of Craftsman tools that are OLD. (I may have been 18 years old when I bought the set.) Guess what? THEY still work. You can’t break Craftsman tools. Sure, I paid more for them then I would for the Home Depot (or Lowe’s) brand…but I don’t care…they last forever.

What does this have to do with Foodservice Beverages you ask?

How many beverage companies have not held true to what made them successful in the first place? Do I need to say anything other than “New Coke”? I probably do since New Coke was introduced in 1985, a few years before our college intern was even born.

If you want a more recent example, look at Tropicana circa 2008/2009. (C’mon, you know where I’m going, right?) Tropicana led the market in “not from concentrate” orange juice. A distraction, in the form of a packaging change, caused them to lose 20% of their unit sales in less than 2 months (January 1^st thru February 22^nd, according to Information Resources, Inc.).

Both beverage companies were able to refocus and recover from their distractions. The jury is still out on whether Sears can right the ship, but I have my opinion.

I’m going to borrow Ken’s phrase, and adapt it slightly…

Focus on doing those things you do best…

In order to do that, you need to know what it is you do best. That may take some introspection. But, once you have figured out what those things are…do them better than anyone else and you will soon be an industry leader.

If you can't figure it out, you are destined for irrelevancy...say hello to Hollywood Video and Circuit City while you're there.