Easygoing James Ferguson of General Foods Sees More Work Ahead
James L. Ferguson, as chairman and chief executive, presided over a recent five-year overhaul of the giant General Foods Corp. that included making major acquisitions, selling off units, launching new products and reformulating old ones.
Momentous changes like that bring tensions that often encourage frenetic behavior in executives--rushing around overseeing all the details, barking orders and pounding fists, the latter two of which would be daunting indeed from a man the size of Ferguson. Did it happen with Ferguson?
Absolutely not, he says. “Apparently, I’m a Type-B personality.”
The easygoing native of Evanston, Ill., explained why the company undertook such a large task in 1979: “The main problem at that time was that we were sort of stagnant. We had a company called General Foods that really didn’t have much that was substantial--God strike me--business.”
General Foods, whose brand names include Maxwell House, Post, Tang, Log Cabin, Birds Eye, Sanka, Kool-Aid and Stove Top, decided to seek new sources of growth by becoming more of a part of Americans’ total diet and by meeting the needs of the growing number of single households and consumers who are concerned with their health.
“There are potential opportunities in all parts of the (menu) mix,” said Ferguson, 58, who attended Hamilton College and Harvard University’s business school.
“With the rise of single-member and dual-income households, there is a growing demand for meals that require less time to plan and prepare,” he said, adding: “At the same time, growing consumer interest in diet and nutrition place a premium on quality foods and beverages that are fresh, light and low in cholesterol, sugar, sodium and caffeine.”
Ferguson, who joined the company in 1963 as an assistant to the marketing manager of the frozen-foods division and held various positions before he was elected president and chief operating officer in 1972, says the company’s products today are better aligned with those concerns.
“And we expect further improvement over the next few years,” said Ferguson, who became CEO in 1973 and assumed the chairmanship in 1974.
Here is how the restructuring went:
- The Oscar Mayer processed meats company was bought for about $470 million in 1981, the Entenmann’s baking concern for $315 million in 1982, the western division of Oroweat foods for $60 million in 1983 and the Ronzoni pasta products company for $52 million in 1984.
- General Foods’ Burger Chef restaurant chain and Gaines pet foods operation were sold.
- The company’s coffee business was pared back because of its volatility. Coffee sales, which in 1980 accounted for 39% of company revenues, now represent 27%.
- New products under existing brand names were developed, such as Jell-O pudding pops, sugar-free Kool-Aid and decaffeinated versions of its coffees.
- Crystal Light powdered drink mixes were introduced.
Symbolizing these changes are a new “space-age” headquarters north of New York City and a new logo that is a two-toned green leaf surrounded by a thick black band.
The overhaul hasn’t paid off yet.
The company posted a profit of $49.9 million, or $1.06 a share, in its third fiscal quarter ended Dec. 29, 1984, down 25% from $66.7 million, or $1.28 a share, a year earlier. Revenue rose to $2.16 billion in the latest quarter from $2.09 billion a year earlier.
Was the five-year plan Ferguson’s baby?
“I don’t think about it as my baby so much as something I helped put together and made some final decisions. This is not a solo act,” he said.
How did the plan come about?
“I don’t remember a particular flash of lightning. Just through the ongoing discussions among the management group here, it refined itself in that process. By the time we announced it, we had a lot of support for it,” said Ferguson, who worked for Procter & Gamble Co. for 11 years before joining General Foods.
There is more to be done, he says.
The company wants to focus more on its specialty cheese business and add other frozen novelties, such as a fruit-and-cream one.
It wants to expand Entenmann’s to the West Coast.
And it wants to grow in the Far East.
“We see the Asia Pacific as an area of longer term potential growth for us,” Ferguson said. General Foods is already selling coffee, rice and noodles there.
In addition, the company also wants its decaffeinated business to grow worldwide.
Another area of interest is ethnic foods. Ferguson cited the acquisition of the Ronzoni pasta company and added, “That may well be a springboard into another kind of Italian products, frozen entrees.”
Asked to talk about himself, Ferguson volunteered: “I don’t think, like other CEOs, I have a high profile in and of myself.”
“I kind of enjoy life because of the opportunities. I go places and meet people,” he said.
He also obviously enjoys an automatic door to his office, which he is quick to show off.
Ferguson and his second, 42-year-old wife, Esther, live in New York City and have a second home in the Bahamas.
Vacations there are “very unstructured,” he said. “There’s just sun and water. I can really get a pretty good recharge of the batteries. You just kind of wonder what happens to the time.”
