Building a European food powerhouse with Paulig CEO Rolf Ladau

3 takeaways from the conversation with Rolf Ladau

1. Expanding International Footprint

Paulig is focused on expanding its presence in international markets, particularly in the Tex Mex category, where its Santa Maria brand is already a leader in Europe. Rolf mentioned that the company plans to continue its growth in existing markets like Sweden, Finland, and the Baltics and replicate its successful strategies in new regions. This includes leveraging the brand’s strengths in product quality, consumer understanding, and consistent brand messaging to penetrate new markets effectively.

2. Acquisitions and Partnerships

Paulig is actively looking at both organic growth and strategic acquisitions to add new capabilities, categories, and expertise to its portfolio. Rolf highlighted that the company recently acquired a Spanish snack company, Leevon, to enter the snacking category with innovative and sustainable products. Future acquisitions will likely focus on similar growth opportunities where Paulig can either expand its current offerings or enter new categories that align with its values and long-term strategy.

3. Innovation in Product Development and Sustainability

A significant aspect of Paulig’s growth strategy involves continued innovation in product development, especially in categories like Tex Mex, world cuisine, and snacking. Paulig aims to introduce new products that cater to emerging consumer trends, such as healthier, more sustainable snacks and meals. Additionally, sustainability remains

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Podcast transcript

[00:00:28] Josua: Rolf, welcome to the show. Thank [00:00:30] you. Thank you for having me. Really excited to talk to you about everything that you’ve got going on. And one thing that stood out as I was preparing about this and reading a little bit about Paulig, is I realized that my view of Paulig was very outdated. So I thought, it’s a Finnish company that sells mainly coffee, and maybe some other [00:00:45] side businesses, and it became really clear to me that it’s a company that sells a lot more than coffee, in a lot of, in a lot more countries than Finland.

[00:00:52] Josua: It’s one of those maybe Finnish like success stories that I don’t think people really necessarily think about. Obviously really excited to talk [00:01:00] about everything that you’re doing and so on. But before we get there if you could start with sharing a little bit about your background, you’ve been working in a lot of different places with a lot of awesome brands.

[00:01:09] Josua: So how did you get started and what’s been your journey to.

[00:01:12] Rolf: I started my career in the beginning of 90s, working [00:01:15] for Unilever Vanderbilt Foods. And why I chose a food company was because I’ve always been interested in food from the very outset. My dad was a great cook and I think that he instilled in me an interest in, in, in food and and that part of [00:01:30] living.

[00:01:30] Rolf: I stayed with Unilever working with, things like, Lipton teas and margarines and what have you. But my international career really started at a bus stop in Crete where I met a couple. I was on holiday with my partner. then girlfriend and now [00:01:45] wife. And and we started talking with this couple and basically, had dinner.

[00:01:49] Rolf: And then as you do, when you have dinner in a holiday destination, you say that, of course, we’ll meet again. And they happen to live in Denmark and they said that you come and see us in Denmark. I said yeah, of [00:02:00] course. And three months later, I think I was, plugging away in, in Helsinki in my office.

[00:02:04] Rolf: And I got a call from this guy and basically said that, would you like to, come and see us. So we did. And then we had a great, Saturday evening, had dinner at her place and woke up [00:02:15] the next morning and I was a little bit, tired. And I found myself to be in a job interview for Kellogg’s.

[00:02:21] Rolf: And then basically it started rolling from there. And, a couple of months later, I found myself, working in Copenhagen, for Kellogg’s worked for Kellogg’s for a [00:02:30] couple of years. Then. I moved to Germany to work for Gillette and with Gillette, I was with close to 10 years, I worked in their oral care, segments, I worked on their blades and razor business, so Mach 3 and Venus and what have you and I moved [00:02:45] with Gillette.

[00:02:45] Rolf: I moved from Germany to the UK, to Switzerland and to Germany. And then the company was bought by Procter Gamble, joined Procter Gamble, stayed a couple of years back in Switzerland. And then I moved to actually to [00:03:00] work for Coca Cola and with Coke in different marketing and business roles.

[00:03:04] Rolf: I stayed for the next seven years working in Denmark and the UK and the U. S. I came back to Finland in 2014, December, and started with Fazer Confectionery, where I was [00:03:15] the managing director for the confectionery business. And then in 2018 I then started at Paulig, and I’ve been with Paulig ever since.

[00:03:22] Josua: It’s really fascinating. First, the story shared. I didn’t know about that, but the chance encounter, which then led to everything. [00:03:30] Very cool. You work with some really world class brands. And also and now working with some of the Finland’s most respected brands. This is a broad question.

[00:03:38] Josua: So you can answer it however you would like. But what have you https: otter. ai Those type of [00:03:45] brands that have those kind of like brand equity obviously huge brand awareness among consumers, but also like just they’re constantly preferred by customers. Yeah. What’s your kind of philosophy about around?

[00:03:55] Josua: Yeah.

[00:03:55] Rolf: So I think that the way I look at, brand building and let’s say maintaining brands [00:04:00] is that the, you have to start with a foundation and the foundation is. Yeah. That you really need to get under the skin of your consumer, your target audience. And really have a solid insight on what does the everyday look like?

[00:04:13] Rolf: What are the touch [00:04:15] points in the everyday to your brands? And in those touch points, whether it’s a need or occasion or a solution, whatever it is. What is that your brand does differently, better, more conveniently, more enjoyably than the brands [00:04:30] that they might otherwise choose? And importantly, what you also need to understand is that, is your consumer the same as the person who shops for your brand?

[00:04:40] Rolf: And you need to tailor your strategy and your approach and your insight generation based on [00:04:45] who purchases and who consumes. Take, for example, a cereal. A mother will buy or a father will buy, for their kids a cereal. So and he or she may not, consume it.

[00:04:54] Rolf: So your story, to the particular shopper will be different than the story to the [00:05:00] consumer. And you need to be very, clear on who you’re talking to. And I like to think about, that generating that insight and really understanding your, the role of your brand in the everyday as the foundation of your house.

[00:05:12] Rolf: If your foundation is [00:05:15] solid, then you have a chance of building a solid house. But if your foundation is weak, then fundamentally everything that you will do on top of it will be not sufficient and you’re not going to win in the market. And I think that’s that I think is key. [00:05:30] The second thing is I think, which is very, Most of the brands that I’ve worked with is that they have a very clear brand identity.

[00:05:38] Rolf: They have, consistently built, certain color worlds, brand logotypes, jingles, tag [00:05:45] lines or whatever it is, and they have been, they have been added and repeating those and utilizing those, for years and years and decades.

[00:05:52] Rolf: And if not more, of course, the idea here is that once you have that insight and one you have, once you have that instant recognizability for the [00:06:00] consumer, you create a situation where the consumers and the shoppers on autopilot, so they go to the store and the only brand that they see, regardless of whatever they might be confronted with, with the, with the retail, they’ll only see you.

[00:06:13] Rolf: And that I think is is key. [00:06:15] The other element on the, on this one is that, that once you have that insight, whatever marketing communications you do. It needs to apply to the head, but also to the heart, and if it doesn’t speak to your heart, if it doesn’t create emotion, [00:06:30] then you are vulnerable, as a brand to everybody else that’s out in the market.

[00:06:34] Rolf: Once you have that connection based on the insight that you’ve actually generated I think you’re going to be golden. And then, with brands that have been around for a long time, I think the, what you need [00:06:45] to understand is that you can create a brand leadership position that And it takes a long time to create, but you can lose it very quickly if you become complacent.

[00:06:54] Rolf: And that’s why you need to track your performance, you need to understand where you’re going with your share, where [00:07:00] you’re going with your brand awareness, where you’re going with your brand preference. And you need to have that toolbox available so that you can at all time, start to get a feel as to are you moving in the right direction or am I indeed moving into a dangerous water?

[00:07:14] Rolf: And that I think [00:07:15] is something that That is that is also that is also vital. And I think the last point is consistency is key. Building a brand and driving, a brand and strengthening your brand requires that you don’t jump around. Once you’ve laid [00:07:30] that foundation, consistently be at it.

[00:07:33] Rolf: And then once you do that, I think that you’ll have a higher chance of success. Then if you don’t,

[00:07:38] Josua: that was a kind of good list of the fundamentals. Has there anything changed in the playbook? I’m thinking, for [00:07:45] instance, given your background at Coke, you were a global marketing director for sports and energy.

[00:07:50] Josua: I’m thinking now for prime, for instance the sports drink. They came up through, but very quickly, I think rose to like billions in sales. Now maybe struggling a little bit, but [00:08:00] when you think, look at examples like that has Has the kind of playbook changed fundamentally or is the fundamentals still the fundamentals?

[00:08:08] Rolf: I, so my personal opinion is that the fundamentals are the fundamentals. The consumers have not changed to something else. [00:08:15] You might have different channels available to you from a, from a consumer point of view, they might be, you might be conversing with them in, in, your mobile phone, which you didn’t do, 10 years ago.

[00:08:27] Rolf: But fundamentally, the basic laws [00:08:30] of how you do marketing and how you build brands are the same. There, there’s no such thing as. Digital marketing, there’s just marketing in a digital channel. So the basic rules of how you make that connection are still there. [00:08:45] And that’s my opinion.

[00:08:47] Rolf: Now, obviously, I’m an old guy, so that might not be true anymore.

[00:08:52] Josua: But it’s so safe to say when you’re looking at across the broad portfolio of brands that you have, you’re thinking yourself more so about the [00:09:00] basic questions. Are we, do we have the right audience? Is our messaging On point.

[00:09:03] Josua: Are we being consistent? You’re not necessarily spending all this time thinking about is it going to be tick tock or is there something else? Like it’s more so about the fundamentals.

[00:09:10] Rolf: I think the media agencies are going to be the ones who will help us with, [00:09:15] the tactics in how you reach your audience.

[00:09:18] Rolf: We are responsible for the fundamentals on what is it that we sell and what is it that we talk about and and how do we translate our understanding of the target audience into meaningful messages [00:09:30] to that motivates them and resonates with them. So I think that’s the way that, that I look at that.

[00:09:35] Rolf: And you’d be surprised how. Often, I think companies don’t spend enough time on the fundamentals, and when you don’t have the insight generated, [00:09:45] when you don’t have the understanding generated you end up in a situation where you start to put wallpaper out to the market. Something that is completely, doesn’t move a needle in terms of preference, doesn’t resonate.

[00:09:57] Rolf: It’s just something nice to look at, but doesn’t [00:10:00] touch here. It’s just, media for consumption.

[00:10:03] Josua: Yeah.

[00:10:03] Rolf: More than anything. It’s not something that actually drives the business or your brand forward.

[00:10:07] Josua: Yeah. I want to get your thought on something which I think. Comes up quite often. We think about Finnish companies, which is that we tend to [00:10:15] under value and under invest in marketing.

[00:10:17] Josua: That’s the criticism. And someone read a blog post where someone argued that effective marketing spend has dropped a lot because yes, in absolute numbers, it’s gone up, but not nearly at the same pace that the [00:10:30] economy has grown. So we’re spending a lot less on marketing advertising. Do you think that’s generally true?

[00:10:35] Josua: And do you think that there’s potential upside to be had by simply being more visible Don’t change anything about your messaging, but just be more frequent, be more available. Or do you think we’re at, [00:10:45] yeah, what are your thoughts about me, the level of media investment among brands? Maybe particular in Finland.

[00:10:50] Rolf: It’s hard to say when you are brand, it’s hard to say when you reach a saturation point, with your message. It depends on the quality of the message depends on. [00:11:00] Who you’re talking to whether you talk to a more mature audience, you talk to a younger target audience, your strategies will probably, and tactics will probably evolve.

[00:11:08] Rolf: I would say that the, the thing that, that, that strikes me generally in the [00:11:15] whole topic, when we talk about companies in, in, in this country is that I think our ambition level generally is too low. And by that, I mean that, we are sometimes, we are in a really good role and we reach the [00:11:30] leadership position in this country.

[00:11:31] Rolf: And then we stop And when we do that, we actually not fulfilling the full potential of what you might do if you actually then reach out and play in a more international space. It’s a comfortable choice because you know the market and you don’t have to invest an arm [00:11:45] and a leg to, to get to a more international business.

[00:11:48] Rolf: But you’re also leaving money on the table potentially. And I think importantly, you don’t necessarily learn, which is part and parcel of that then as well.

[00:11:55] Josua: So it’s it’s almost like a self-limiting, self-sabotaging kind of thing.

[00:11:59] Rolf: Yeah. If [00:12:00] it can be, if you are happy with, being in the national championships when you should be playing in the Olympics, then, of course, it becomes a self limiting prophecy in a way.

[00:12:09] Josua: Yeah, I think, you have done the opposite of that, I think, with Santa Maria, for instance, where you’re, I’m guessing, the market leader in [00:12:15] Europe in the Tex Mex category, where you could have been stayed just in Finland and Sweden and done really well for yourselves, but that was not enough, which is very good.

[00:12:23] Josua: Okay. So when you made the switch then from to, to Paulig what was that like? Because was that your [00:12:30] first CEO role? You had previously done mostly marketing and now you’re. You’re stepping and taking charge of the whole organization.

[00:12:36] Rolf: So the, so I had, I was I was doing a business unit direct business unit director’s role when I was at Gillette, I was the category head for sports and [00:12:45] energy bevs when I was with when I was with Coke.

[00:12:47] Rolf: And then obviously the managing director for Fazer Confectionery. And so it wasn’t, the first, let’s say traditional management role, but it was the first CEO for sure. And had this [00:13:00] hunger where, when you do marketing for a long time you, you can go in two different ways.

[00:13:07] Rolf: You can say, I’m going to be a marketer forever. And I’m happy with that. And that’s the pigeonhole that I have, created myself and I will do well [00:13:15] in, in working in that space. Or you can say to yourself actually, now that I’ve, done marketing for, for quite some time, I’m interested to see the other parts of the business and not just the sliver.

[00:13:25] Rolf: And that’s the latter was what I was really interested in. So I started to get more and more antsy [00:13:30] about, look, I want to really get my hands dirty in the rest of the organization as well. And now. In the last six years, I’ve had that opportunity with Bollig, and it’s been fantastic.

[00:13:42] Josua: No, I can totally see that. Has [00:13:45] now that you’ve you’ve gotten a broader and broader perspective on the entire business. Has that informed how you think about marketing? Have you learned, have you changed previously held beliefs about marketing now that you have brought no,

[00:13:56] Rolf: no it has not If anything, I [00:14:00] think that, they have confirmed, the beliefs and and I think you said earlier that, that, sometimes people think of marketing as an expense as opposed to investment.

[00:14:09] Rolf: And, in my view, Marketing is an investment and obviously you need to, to adjust things when [00:14:15] depending on where you are from a company performance point of view. But largely I think what holds true is that the businesses who continue to invest, despite the fact that you might be going through certain cycles, are the ones that come out of the, at the other end in a better shape that they came in.[00:14:30]

[00:14:30] Rolf: So to me, marketing is very much an investment and not an expense. The way you look at it is. Sales is responsible for sales today and marketing is responsible for sales tomorrow.

[00:14:42] Josua: I completely agree. One thing I’m [00:14:45] always really interested to hear about is when someone takes on a new role, like for instance CEO, what did the first, call it 90, 180, 180 days, first year, what did it look like?

[00:14:56] Josua: What were your kind of priorities? How did you structure your days? What were your [00:15:00] targets? How did you think about because it’s such a big change, even though you have like lots of experience, you’re stepping into a new organization with completely. Everything is so there’s so much you need to soak up and so quickly.

[00:15:10] Josua: So how did you? Think about your first time at Public.

[00:15:14] Rolf: It [00:15:15] was scary. It was motivational. It was inspiring. It was fun. It was hard. Everything, right? I think my first and foremost focus, which I guess is with everybody who comes into a new role, is that you get to [00:15:30] know the people you spend, try to spend as much as you time as you can listening.

[00:15:35] Rolf: And try to get a feel as to where the company is and how people think about the company and visit as many sites as you can. And when I joined Paulig, I think that I did [00:15:45] that. And one of the things to which I’m really happy about that we did was, we actually did this exercise where I asked the entire organization.

[00:15:54] Rolf: So 2, 200 people 2, 000 people asked them the question of, can you describe the company in [00:16:00] three objectives? Just to get a sense as to how people think about the business and and out came a, a certain word cloud and based off that, then, I started to think that what is, what are the things that we can do better?

[00:16:12] Rolf: How can we improve and maybe how can we [00:16:15] unlock the mindset off the organization to drive further growth? And, we did, certain, rejigs in the model off the company and started to build a new public. And obviously, been a very successful company up until that point, and now it’s continues to be a very [00:16:30] successful company.

[00:16:30] Josua: Yeah. I think you’re now, public is doing over 2 billion in revenue. No, it’s 1. 2. 1. 2.

[00:16:36] Rolf: A couple of years from now. We’ll repeat.

[00:16:40] Josua: Yeah. Still, massive growth. And like I said, you’ve had, I think your biggest in terms of [00:16:45] employees, the biggest factories in the Netherlands, I think.

[00:16:47] Josua: It’s actually, our biggest site is Belgium. That’s where our site

[00:16:49] Rolf: is. And too wrong in in

[00:16:52] Josua: details. Yeah.

[00:16:53] Rolf: Look, it doesn’t matter. And so anyway, so yeah, Belgium is our biggest site. We have more than 800 people [00:17:00] working there. And then we have Sweden. Then we have Finland and then we have Spain.

[00:17:06] Josua: Yeah.

[00:17:06] Rolf: We had, obviously, we have operations in 13 different countries. Yeah. But Belgium is the biggest. And that’s where we have the vast bulk of our TexMex [00:17:15] production actually happens there.

[00:17:16] Josua: Yeah. I want to talk about a couple of different things that you’ve been doing at Powerlink.

[00:17:20] Josua: One thing. That I think it’s just super interesting. It’s not something to be a case. I was purchased, I think, in 2011. So that was before you joined. But and obviously, there’s no [00:17:30] public numbers or anything, but safe to say it’s been extremely successful acquisition. So just you talked about some of the fundamentals there, but when you’re looking at a brand like Santa Maria, like what is it that gives it that Scalability [00:17:45] that what is it that allows a brand like something, but you have to become a European category leader as opposed to, there’s tons of brands.

[00:17:52] Josua: And if you go to the store here in Finland, there’s there’s local in all different categories. Most of them are very small. Most of them remain very [00:18:00] small. And then there’s the. I guess there’s maybe only one sent the video in but nevertheless, there are the ones that really then take the next step.

[00:18:06] Josua: So what is it that, what are the ingredients that allow brand to do that?

[00:18:09] Rolf: None of this happens overnight, of course. And we have to realize that, that [00:18:15] Pawlik first started to, to cooperate with Santa Maria company in 18, 1989. And in 2010, the company bought the majority stake in Santa Maria.

[00:18:26] Rolf: 2011, we bought the, the full ownership of the company. So we have, [00:18:30] we’ve been working on the Santa Maria a larger portfolio for more than three decades. And over that time, if you take Tex Mex we have double the business many times over that course of that, of the three decades.

[00:18:43] Rolf: So there is no magic, [00:18:45] let’s say, point that you say you do this and then, all of this happens. I think, What is key is that the way that we have built Santa Maria is by largely using the, things that I said early on about how do you build and maintain a brand [00:19:00] that has been a constant feature.

[00:19:01] Rolf: So we’ve, made sure that the brand is visible, we’ve made sure that, we. Learn from the things that we do and reapply that learning to do next time, do things better. So it’s gradually improvement, which has been key [00:19:15] with upskilled are our teams to make sure that we can do talk about and conceptualize meals in an attractive way to the consumer and part and parcel of the reason why we have been so successful in Tex Mex is because we have [00:19:30] been able to conceptualize to the consumer and the shopper at Tex Mex meal, which is you take your foundation, you take your protein, you take your spices and salsas and veg, veggies, and you have a meal.

[00:19:41] Rolf: Voila. So nothing, it’s not too complicated, [00:19:45] but that’s the, but that’s the, that, that is the secret sauce in the way that, that, you make it simple and make it attractive. And it becomes very easy for people to understand how you actually interact with this, with this proposition.

[00:19:58] Rolf: And we have done that, we’ve [00:20:00] taken, we’ve taken the learning from how to do it really well in Sweden. And what we have done is we simply replicated that. formula. We’ve taken that formula and said, okay, this is how you’ve done it in Sweden. Here’s how you do it in Finland.

[00:20:14] Rolf: Here’s how we do it in [00:20:15] Norway. That’s how you do it in Denmark. This is how you do it in the Baltics. That’s how you’re going to, also apply it to the Netherlands. So that is, that, that’s, so there’s no reason to, to reinvent the wheel when [00:20:30] you will. have essentially cracked the code on how you do it.

[00:20:33] Rolf: And it’s very tempting for the organization to think that it works there, but it won’t work here. And you have to fight that urge to try to tailor everything when you don’t have to. Some cases you do, [00:20:45] but in a, with a portfolio that is fundamentally, speaks to the need for tailoring your meal, speaks to the need of wanting to, to make something as healthy or as indulgent as you want.

[00:20:58] Rolf: Talk about the convenience, [00:21:00] you don’t need to, and we haven’t had to do that. And now we’re at a space where, we are, together with our customer brands, Tex Mex business, we are the market leader in, in, in Europe and it’s more than, half of our turnover as a business and it [00:21:15] will continue to grow with that formula.

[00:21:17] Rolf: So that’s been, that’s really been the key for us. Consistency.

[00:21:22] Josua: Remarkable success. And I guess there’s also there’s, like you said, there’s the urge or the temptation to go and try to mix change things. [00:21:30] And it’s surprising that when you have something that works, the human kind of impulse seems to be, let’s change it as opposed to being like, let’s just double down and triple down.

[00:21:38] Rolf: I think it’s just human nature. What you want to do is you want to. show that, you add value. And [00:21:45] sometimes the best value that you can add is to replicate, successes from elsewhere. And it’s completely natural. I completely understand it made that mistake many times by myself.

[00:21:55] Rolf: But that really is the key. And, you have the playbook, that’s how you do it. And when I was [00:22:00] working with the energy drinks and our main competitor, obviously at that point was Red Bull. Red Bull had a perfect playbook at which the app, which they applied every single time, they moved to a new market every time, the same playbook.

[00:22:13] Rolf: So it [00:22:15] works for big brands, it’s small, it works for small brands. Once you crack the code, it’s about keeping consistent and replicating. And of course, then you need to monitor and understand whether you’re actually moving the needle. Of course, small adjustments need to happen, but at the end of the day, [00:22:30] it is not rocket science.

[00:22:31] Rolf: This is about. Commercial execution. It’s about running the right messages with the consumers, having the right story to the trade in terms of what this category will do to you and why is it of interest to you having beautiful packs and having the right [00:22:45] quality product, great tasting products.

[00:22:47] Rolf: That’s the formula.

[00:22:48] Josua: Got it. And but like you said, I think then it becomes it’s so everyone wants to add value. So then it’s I guess it’s key when you have a brand manager that comes in to tell them that, hey, we’ve done this. [00:23:00] We’ve got the playbook, like you need to execute, yes, but the expectation is not for you to reinvent this thing.

[00:23:05] Josua: Because otherwise, like you said, human nature, we want to prove ourselves and so on.

[00:23:08] Rolf: Yeah, man, of course, we always listen to great ideas. Nothing is carved in stone in the sense, and of course, there’s [00:23:15] freedom within the framework, to tailor certain things. And that’s part and parcel of the fun, of course.

[00:23:20] Rolf: But you need to then ask yourself is this change going to fundamentally, result in a totally different outcome. And a better outcome than [00:23:30] you would if you would not do this thing and invest the time and money and resource to do that. So it becomes a question of choice.

[00:23:36] Josua: Yeah.

[00:23:37] Rolf: And, what is the degree of change that you expect to get by applying a new way of thinking [00:23:45] to a certain problem?

[00:23:47] Josua: How are you thinking now at potential future acquisitions? Is it most of it looking at these smaller brands that maybe Have the potential to do something, or are you looking at companies that have, like you said, figured out the formula? Because obviously you [00:24:00] have the resources, you could scale it,

[00:24:01] Rolf: I could tell you everything, but I’d have to kill you. No one’s listening. We’re just speaking in private. No, it’s all joking aside. We are looking at, I’m guessing. Yeah. Of course. I think that, it’s no [00:24:15] secret to anyone who’s out there in the market that, that, that we, as a company, we are interested in of course, in in organic growth in as much as obviously we drive organic growth, but we also interested in adding, new capability and new category, new expertise into our [00:24:30] portfolio.

[00:24:30] Rolf: And we just did a couple of years back, we, bought a company in Spain called Leven at the time. And Leven, we bought because we had an interest in the snacking category. And, we felt that That, Leevon added a lot [00:24:45] of, let’s say, capability expertise from a knowledge, but also from a manufacturing capability point of view to our portfolio.

[00:24:52] Rolf: Being able to produce interesting snacks from, Different raw materials, grains and, [00:25:00] vegetables and fruit it was pretty enticing to us. So they have been now with us for, for for a couple of years, and it’s been a very successful let’s say undertaking for us as a business.

[00:25:10] Josua: Okay. Yeah, I wanted to ask about that. Reimagine Snacking is one of the growth platforms of the [00:25:15] company. What’s driving this demand for these different types of new snacks? Is it like environmental concerns? Do people, consumers want more choice? What is it that fundamentally drives the category here?

[00:25:26] Josua: Let me ask

[00:25:27] Rolf: you,

[00:25:27] Josua: do you snack, right? Very [00:25:30] seldom. But when you snack, why do you snack? I snack because I’m hungry. Bored, actually. Bored and hungry. Okay. Bored most of the time. Yeah. Okay.

[00:25:38] Rolf: So the reason I’m asking is that, that when you think about snacking snacking has been around [00:25:45] ever since humans have been around, and snacking will continue to be around as long as humans are around, for sure.

[00:25:51] Rolf: And people snack for different reasons. They snack for, to get a pick up in the afternoon, for indulgence, for joy, to [00:26:00] address their, feeling down and, functional, whatever. There’s a whole plethora of reasons why you snack, including being bored and tired and what have you.

[00:26:09] Rolf: Yeah. So I think that what will happen with snacking is that it’s a huge category will [00:26:15] continue to grow. The demand for snacks will not go anywhere. My prediction is that, things like, more functionality from snacks more sustainable snacks better for you snacks, I think over time will, grow [00:26:30] in importance.

[00:26:31] Rolf: And , but at the same time, fundamentally, the core thing about snacks is taste. If the if the snack doesn’t taste good, you’re not gonna eat it regardless of the backstory. Yeah. If is, it is just not gonna enter into your shopping basket. [00:26:45] So taste is paramount and then everything else can along follows from that.

[00:26:49] Rolf: I believe that in as much as these, the, functional better for you and other elements and snacks, which may be smaller at the moment, and they will grow. I think the indulgent part of [00:27:00] snacking is probably going to be bleeding for quite some time. I don’t think that’s going to go anywhere, but I think the other parts will probably, start to make more of a splash in the category.

[00:27:12] Rolf: Interestingly enough, when. When before we [00:27:15] entered into the current recession the, or the economic downturn these, let’s say, alternative snacks for the lack of a better word where great give away gaining traction and now with the economic downturn, what happens in an economic downturn [00:27:30] is people, obviously they have less money and they tend to gravitate towards the safe choices.

[00:27:35] Rolf: So the things that, that they know, so there’s less of a willingness to try new stuff. And we see that in some of the category dynamics as well. Yeah. But we will come out of this [00:27:45] recession and this downturn as well. And, things will, start to take a different, turn as it always happens.

[00:27:51] Rolf: And then it’s just a question of, do you have the patience to continue to work on this broader category and then wait for, for that, for those things to happen. Start [00:28:00] to pick up in a different way and fall for public. The answer is yes.

[00:28:03] Josua: Yeah, I guess that’s one of the benefits of being a family owned company with a long history.

[00:28:08] Josua: There’s a patients that

[00:28:09] Rolf: yeah. And when we have, we have, pop snacks. We have tortilla chips. We have, nuts. We [00:28:15] have, all, you name it, we have it. So we operate the, pretty much the full spread spectrum of snacking. And yes, I think that when you work in a family owned company the benefit of working in a family owned company is that you have you have to look at [00:28:30] This from a point of view of what the owners actually want.

[00:28:32] Rolf: And in Paulik’s, case, what the owners want is that they want to hand over the company to the next generation in a better shape that they got it. So that’s the goal, right? [00:28:45] But don’t be fooled. The idea is not that, we operate, 50 years and that’s the time span.

[00:28:49] Rolf: Obviously we, We do, compete with, big FMCG’s who are listed and who have the, quarterly challenge and have to deliver the quarterly results for, [00:29:00] for the, for the, for their respective shareholders. And that means that even though we have that flexibility of executing and delivering on long term strategy.

[00:29:10] Rolf: We are still, competing against these guys. So we cannot be complacent. We have to be [00:29:15] fast. We have to be also reactive. And that’s the space that we operate in. It’s not going to get any easier. It’s just probably gonna get more complex. When you have progressive owners, like we do, who are willing to invest, who [00:29:30] are willing to take risks, who are willing to grow the company, willing to try new stuff, that’s how we get there.

[00:29:37] Rolf: And if you look at, the history of Paulig one thing which is interesting is that, Baltic started off as a colonial goods store in 1876 in the center of [00:29:45] Helsinki. And that point of time, the company sold, or the store sold coffee, spices, dried fruits and nuts, and some booze.

[00:29:54] Rolf: Something like that, right? And over time coffee and spices have been the constant in our [00:30:00] portfolio. But in the decades, it’s, gone from that to having frozen foods, to having ice cream, to having, you name it, category, come in and then go out and come in and go.

[00:30:11] Rolf: So the business and the categories have basically grown and contracted, [00:30:15] over the course of decades. But that’s also how you. remain relevant and fresh and interesting to the consumers when the consumers see that you actually oh you’re doing this or you’re doing that and you’re also relevant for the retailers, right?[00:30:30]

[00:30:30] Rolf: But that’s been part and parcel of why we’re still here 148 years later.

[00:30:35] Josua: So So, the company has had to reinvent itself many times. I’m guessing the thing that changes, maybe the cycles are more compressed now, changes faster.

[00:30:44] Rolf: Changes, [00:30:45] changes faster. Competition is no, I can’t say what competition was like in the 50s, but, but competition is probably,

[00:30:52] Josua: Yeah, it’s more global.

[00:30:53] Rolf: Yeah, it’s more global. For the consumer, the marketplace is not the corner stop [00:31:00] store anymore. It’s a global marketplace. And from that point of view, it’s it is more difficult. But but, I think that the secret why we are here after 148 years is really is driven by the fact that, we are We have been [00:31:15] curious about the surrounding.

[00:31:16] Rolf: We have been willing to try out new stuff, and we’ve tried to anticipate trends, decade in, decade out, so that we always stay fresh for the consumer. It held the truth in 60 years ago. It’s still the truth. Now, [00:31:30] nowadays and that’s why when you look at companies who have been around, in two years time, we’ll be 150.

[00:31:38] Rolf: You can, You don’t have many, certainly not many food and beverage companies that have been around for 150 [00:31:45] years. So you’re like in a, quite an exclusive club as a company when you get to that point. And the real red line is in this interest and curiosity about the outside world, wanting to stay fresh for the consumers, wanting to stay relevant, [00:32:00] understand how your, what your brands and your products mean for the consumer on the everyday.

[00:32:06] Rolf: And then, gradually improving. It’s not about massive steps of improvement, it’s small things. And over time, those small things, those [00:32:15] small improvements that you do into your business end up in a significant, step change to your business. That’s the way you do it.

[00:32:23] Josua: Yeah, that sounds like a good strategy.

[00:32:24] Josua: Compounding is really powerful. Yeah. You do it over 150 years. It’s incredible.

[00:32:29] Rolf: Yeah. And one of the things [00:32:30] that I’ve, that I talk about and what I try to do at Paulig is is I’d like us to, I want to create a virtuous cycle of learning, which is we do something. We [00:32:45] analyze what we did, we apply that learning and we do again, and you repeat that cycle and those small improvements and you get to that big change.

[00:32:54] Rolf: What prevents that in some cases? And that’s a nut that I think that we [00:33:00] still need to crack as a company. And I presume that quite a lot of other companies need to crack as well is that it’s human nature to be wanting to talk about successes. And of course you learn a lot about successes, but people shy away for [00:33:15] understandable reasons.

[00:33:15] Rolf: People shy away from, they really don’t want to talk about the things that they’re really screwed up. And it is uncomfortable, but once you get over that hurdle, And if you get to the point where people feel comfortable about talking about the [00:33:30] things that they screwed up, that’s where the relearning happens.

[00:33:33] Rolf: Now, have we as a company gotten to that point? No. Will we try to get there? Absolutely. Because fundamentally, if we, if you don’t talk about things and if you pretend that you don’t do mistakes, [00:33:45] and if you don’t do mistakes, then you’re not doing anything. That I think that old saying, holds water

[00:33:51] Josua: for sure.

[00:33:52] Josua: Yeah. Do you have any personal kind of favorite screw ups stories?

[00:33:56] Rolf: Yeah, I could tell you, but no, I think that, there’s [00:34:00] plenty, big and small and have to do with, Positionings and getting things right from a marketing point of view or introducing products that we did not listen to the consumers, in with the year that we wanted.

[00:34:09] Rolf: So

[00:34:10] Josua: yeah,

[00:34:10] Rolf: Many things.

[00:34:11] Josua: Yeah, the positioning is, The theory of how you do it, you define a [00:34:15] category and then you the message and all that. It’s Fairly straightforward, but Positioning feels really difficult. It is. It is.

[00:34:22] Rolf: It

[00:34:23] Josua: is an art and a science. How

[00:34:25] Rolf: do you know when you’ve got it

[00:34:26] Josua: or do you ever?

[00:34:27] Rolf: It’s actually quite interesting. [00:34:30] I’ll, I was, when I was working in in Agilette and we are, we were launching this this global oral care product to the marketplace. And this was. This was in 1997 [00:34:45] and we were doing some groundwork, to really capture the position of the product.

[00:34:49] Rolf: And I remember I was in a in actually in a focus group in Chicago cause it was a global launch and I was in a focus group in Chicago and I was listening to this to this group of people conversing about the [00:35:00] proposition that we had on the table. And then. And then during that part of that focus group, there was a gentleman who made a statement about how they should be talking about [00:35:15] this particular product that we had in mind.

[00:35:17] Rolf: And it was just, we were close, but we hadn’t cracked the code in terms of how do you actually, how do you actually express yourself in the right way from a positioning point of view. Internally [00:35:30] and then to your stakeholders. So you can actually create meaningful advertising.

[00:35:33] Rolf: I remember when this guy then talked about and made this statement. I looked at my boss at the time he looked at me and we were like, Yeah. that’s [00:35:45] it. And this particular statement that we have is still being used, today, in the oral care category in the nowadays, the Procter and Gamble, business.

[00:35:53] Rolf: So it’s, it requires a lot of hard work. Sometimes it’s luck like in this case but it’s an art and a science [00:36:00] there, there is no scientific way of getting to it. It always requires. A bit of judgment, a bit of luck and trial and error, I think, in some cases,

[00:36:09] Josua: for sure. And like you said, I don’t think you can substitute judgment with endless amounts of research.

[00:36:14] Josua: Like it [00:36:15] feels like at some point someone needs to say, this is what we believe in. And it’s based on judgment, experience, understanding about human nature. And it’s fascinating how, if you have that insight, whatever that sentence was, it can carry for like decades and drive the entire strategy [00:36:30] around that one insight.

[00:36:31] Rolf: That’s it. That’s exactly, it’s, and it’s, yeah. And it’s, and that’s where you, when you have that, when you have the insight honed in and nailed, and for us it took, it took, I was almost to the verge of [00:36:45] tears in terms of, bored to death of trying to nail this Yeah.

[00:36:48] Rolf: Until one, until it then finally actually happened. But it just shows to you that you cannot rush it.

[00:36:54] Josua: Yeah.

[00:36:55] Rolf: And. that foundation needs to be laid in a solid way so that it [00:37:00] carries over time and it rings true, to the, this generation, these consumers, but also the next gen next, consumers and so forth.

[00:37:08] Rolf: That’s when you know that you have it. It doesn’t and I’m not advocating that, everything is stagnant and you should always stick to a [00:37:15] hundred percent, what you started with no brand does that, but the successful brands. have been more consistent than inconsistent in how they work with work with their brands and work with their propositions.

[00:37:27] Rolf: You look at, the famous blunder in eight, [00:37:30] 1980 when Coke altered their, recipe and then quickly altered it back. Yeah. Why would you do that? Yeah. You’d been around for more than a hundred years at that point,

[00:37:40] Josua: that was fascinating that they actually did

[00:37:42] Rolf: that.

[00:37:43] Rolf: Yeah. I wasn’t [00:37:45] privy to and neither of us were privy to that conversation, but I’m pretty sure that there was very compelling, case as to why you wanted to do that. And, but it just showed that, some, sometimes it’s better not to when he doesn’t need fixing, don’t fix it.

[00:37:57] Josua: Yeah. For sure. [00:38:00] I think just a kind of a personal question. The judgment is so incredibly valuable, in all professions, but marketing, it feels like it’s super, super valuable. You can learn tools and sticks, tricks and tips of the trade. But acquiring judgment [00:38:15] is incredibly important.

[00:38:16] Josua: If you want to be an effective marketing leader. What’s the best way to go about that besides experience? Or is it just you have to work with a lot of brands, you have to see it. How they succeed and how they fail or is there any way that one can acquire judgment more [00:38:30] easily?

[00:38:30] Rolf: Make a lot of mistakes.

[00:38:32] Rolf: That’s,

[00:38:33] Josua: simple, but not, yeah,

[00:38:34] Rolf: It’s, it’s, and you don’t have to make a colossal blunder, of course, but, with any learning, you try stuff and, and you, and I think that it’s, you have to [00:38:45] ground your judgment on A thorough understanding off your target audience that and that homework is scientific.

[00:38:52] Rolf: You can do that, right? But then the judgment part comes on top of that, and then you can, spice it up with the mistakes that you made [00:39:00] to then land on something, which was wrong. Creates value, to your consumers and your stakeholders.

[00:39:05] Josua: Yeah, learning from mistakes is that requires a kind of closed and tight feedback loop, because you need to know when you made a mistake.

[00:39:12] Josua: And I guess that can be hard when you’re dealing with FMCG. [00:39:15] Like, how do you Make sure that the teams, the people working at public with your different brands are getting that actual feedback of Oh, our position is wrong. Our messaging is wrong. This product, the product features need to be tweaked.

[00:39:28] Josua: Like, how are you getting generating? You [00:39:30] mentioned insights. Like, how are you generating those insights, those feedback on a scale?

[00:39:35] Rolf: So I think that, the feedback loop is something that the, I think as in our case, the marketing team is, that’s a community and they have their [00:39:45] way of analyzing and understanding on whether they’re on the right track.

[00:39:48] Rolf: And by and large, I think that, we’re doing a good job in in, in that. I guess what I’m trying to get to is getting exposure, to not only the [00:40:00] successes, but also the, the learnings from the mistakes that we made on a. On a broader level than just within a community because in it, because there is, there’s a lot, there’s a lot of value of of sharing, the things that you might have, made a blunder on [00:40:15] with a broader, community because everybody will learn.

[00:40:18] Rolf: And so that’s something that we haven’t cracked that probably quite yet, but we will get there.

[00:40:23] Josua: Yeah. You mentioned one, one really key ingredient there is creating a space where people can talk about mistakes without being shamed or [00:40:30] Yeah. Yeah.

[00:40:30] Rolf: And we had this one, just about, a few months ago, we had this one session where we had people coming into the leadership team and sharing some learnings of the mistakes that, that they made.

[00:40:40] Rolf: That we had made as a company in, in, in a particular case, and it was [00:40:45] probably the best conversation that we had as a leadership team in a long time. And we have good conversations, mind you that’s not the, that’s not the issue. But what was really refreshing about this one is that we really got to the core of the issue.

[00:40:59] Rolf: And I think [00:41:00] everybody felt that we really learned. And we could rejig and reorient ourselves, in a better way to, to address that particular, not that we needed to crack. And that was because we had courageous [00:41:15] people working in the organization who trusted us. And we trusted them so that we could have this open conversation, very valuable, awesome conversation with some real actionable follow ups and [00:41:30] course corrections as a result of that.

[00:41:31] Josua: Yeah.

[00:41:31] Rolf: And that’s what you get. But you have to create that, that, you have to earn the trust of the organization and so that they feel that, hey, I made a mistake, I can talk about this without having repercussions.

[00:41:41] Josua: Yeah.

[00:41:44] Rolf: You need to create that [00:41:45] environment.

[00:41:45] Josua: Yeah, it’s so energizing and obviously, these conversations need to take place in person, I find, for

[00:41:50] Rolf: Oh yeah.

[00:41:50] Rolf: You can’t, you can’t have that

[00:41:52] Josua: Over Zoom. You don’t feel the energy. No,

[00:41:55] Rolf: No. That would be a kiss of death, that one. But, you have to have that live. We had that live and [00:42:00] it was beautiful. Very

[00:42:01] Josua: good. Yeah. Awesome. Yeah I want to talk about sustainability and how you’re thinking about it a public and maybe especially from a investment business case point of view.

[00:42:12] Rolf: Yeah. So we have, we spend I [00:42:15] have spoken about sustainability on multiple forums over the course of the last year. Three, four years. And oftentimes I get the question, and because obviously companies are different levels of maturity in their thinking and their planning and their [00:42:30] execution of a sustainability, let’s say, program.

[00:42:33] Rolf: And oftentimes when I’m finished with my little song and dance, somebody in the audience will say nice, but, what’s, do people pay more because of the fact that you’re now doing this, great program. So the question is what is the business [00:42:45] case for doing sustainability?

[00:42:46] Rolf: And oftentimes, I say that, Hey no, not at the moment. That’s, I cannot put a marker on the ground and say, because of this, that we are doing, that people will automatically want to pay more for price. They’re not. But the [00:43:00] way that I like to think about it is, it’s not a question of what is the business case for sustainability.

[00:43:05] Rolf: I like to think about it in the context of what is the business case for not doing sustainability. And once you turn that question around, once you look at it from that point of view, [00:43:15] you realize that, particularly as the younger generation, who is much more wiser than my generation, who is much more enlightened than my generation on this one.

[00:43:25] Rolf: Once they come of age and once they become. The dominant so called [00:43:30] generation, their expectation is to have these types of products, have these type of companies who are well versed in sustainability, where their sustainability programs are not just something that lives on PowerPoint, [00:43:45] or not just something that you glue on top of the things that you do anyways.

[00:43:50] Rolf: They will gravitate towards companies where sustainability is integrated into the business model. Sustainability informs the decisions that you do, [00:44:00] whether it’s a CapEx decision or a partnership position or, or a new market position or whatever it is, as in our case. Sustainability, for Paulig now basically is firmly integrated into our business strategies.

[00:44:14] Rolf: There [00:44:15] is no separate sustainability strategy. It’s just embedded there. And I firmly believe that once You know, we put, put a year, put a couple of years, put 10 years, put 15 years. And as we [00:44:30] continue to plow ahead and continue to work on, on, on our agenda and being true to our values, when it comes to the company of wanting to be a part of the solution and not the problem that this will pay off.

[00:44:42] Rolf: In the same way that that when I bought it, when [00:44:45] I joined the company probably in 2018. At that point of time, we had made earlier, we had made a pledge as a company that we would have 100 percent of all the green coffee beans that we source globally come from verified sustainable [00:45:00] sources.

[00:45:00] Rolf: And, I got to benefit, from the end of that program when just a couple of years later we reached that goal. But that was then the catalyst for us to think about that’s just one raw material. That’s just one part of the business. What about the rest? And hence, we then [00:45:15] started to look at a much more broader, but focused, sustainability approach for the company, which we have since, then operated.

[00:45:22] Rolf: But I in as much as you can’t put a monetary value on it today and in as much as it costs a lot of money to [00:45:30] execute it today it will pay off. Absolutely will pay off.

[00:45:34] Josua: I think that’s really powerful when you can say. Make that case because if you’re in, if you’re in a place where it’s sustainability or marketing, where you have to pretend to be able to calculate the [00:45:45] ROI today down to the last cent, or if that’s the perceived that’s the burden of proof level of proof you need to have before you make an investment, safe to say that investment is not going to be made.

[00:45:56] Rolf: You will not be, no, there, there is not going to be a business case [00:46:00] that you can reliably put on the table to say that. Because of this, this, that, this and that happens, this is an investment into the future. It’s an investment for the benefit of the next generation. It’s an investment to the next generation owners of this company.[00:46:15]

[00:46:15] Rolf: that we have now, that we’re working on this so that they can benefit from the fruits off of this work once they become the leaders of this company.

[00:46:23] Josua: Yeah. And those types of investments are, have lots of compounding effects. It impacts employer branding [00:46:30] and how you think about recruitment and how retail partners think of you as a brand.

[00:46:34] Josua: There are so many trickle down effects that You can’t really

[00:46:37] Rolf: see this. This is a great point. Thanks for raising that. Because interview people on a regular basis who want to come and join public. And, [00:46:45] one of the first questions I always ask is why are you here?

[00:46:47] Rolf: Why? Why? Why? What? What is the journey that, that has now taken you in front of me and you wanting to come and work for us? And, what I get is, oh, the categories, family, blah, blah, blah, blah, [00:47:00] blah, all the usual suspects. And sustainability, always. So this is, it is already, it’s not something that is emerging.

[00:47:09] Rolf: It’s already a reason for people wanting to be [00:47:15] employed by you. Because And I completely get it. People want to, people are gravitated towards companies who have a higher value than just profit generation. It’s important, of course, profit needs to be generated, [00:47:30] but there’s a higher agenda that attracts the, the people who want to work with you.

[00:47:34] Rolf: And that I think is, we can say, I can see that in, in my interviews, I think, the people in the broader organization can see it. It’s already a competitive advantage.

[00:47:43] Josua: For sure. I think the fact that, [00:47:45] CEO comes on once a quarter and talks about EBITDA.

[00:47:47] Josua: Yeah, it doesn’t light the fire in most people’s the

[00:47:50] Rolf: only, the only place where it lights a fire is behind me. So yeah, particularly if it’s not doing what I want. Exactly.

[00:47:57] Josua: Yeah. No, I think that’s a really good kind of place to end. I think [00:48:00] that ties up a lot of things that we’ve been talking about.

[00:48:02] Josua: Unfortunately, we’re out of time, could continue this conversation for a really long time. But final question for you. Is there anything across politics portfolio of brands or products that you’re particularly excited about or that you feel that people should know [00:48:15] about anything new?

[00:48:16] Josua: Anything? Anything? Especially exciting?

[00:48:19] Rolf: I think that what I’m I think that we have a really strong portfolio as a starting point as a whole what I’m really excited about is, is the development in the food space in [00:48:30] general. When we think about the evolution of, the world cuisine and ethnic kitchens that are raising their heads and have already raised their heads in different, parts of Europe and European countries.

[00:48:42] Rolf: That’s going to be a rich space. And that’s [00:48:45] where, we will continue to, to, to drive our journey and drive value to the retailers. But I think importantly, inspire and delight our consumers. And that’s where it’s going to be. So watch that space.

[00:48:57] Rolf: Okay.

[00:48:58] Josua: That’s good.

[00:48:58] Josua: It’s good advice for [00:49:00] everyone. Thank you so much for coming on and really excited to, to follow follow along your journey to the 2 billion, 2 billion mark, which will hopefully come sooner rather than later. And yeah, I think from speaking just as a Finn, I think it was super impressive to see what public has [00:49:15] done over the last, especially over the last, decade, two decades, it’s been truly transformative and we need more of those more of those kind of stories, more of those types of brands and more of those types of yeah, investments.

[00:49:26] Rolf: Thanks. I think that it’s been a, it’s been a pleasure being part of [00:49:30] this conversation. I think the current management and the past managements who have contributed to this journey. Thank you. Perfect. Thank you so much. Thanks.