How Ready Pac Went from Near Bankruptcy to Innovation in 3 Years

Running a vegetable operation can be a highwire act. There are so many factors that play into if you have a profitable year — weather, labor availability, costs, and the price you’re able to demand. But lead growers are not helpless in the face of these challenges. They can and do make an impact on a farm’s success.

A great example of how leadership matters was on display at United Fresh’s MKT Expo in Chicago this week.

Three years ago, Tony Sarsam became CEO of Ready Pac Foods and was tasked with the herculean goal of saving the company from bankruptcy. Prior to Sarsam joining the company, it had lost its biggest customer. Sarsam admits that Ready Pac had broken its customers’ trust. In trying to cut costs, it had cut on-time deliveries and fulfilling orders correctly.

So Ready Pac was living up to one half of the formula for business success: Sell more, spend less (and repeat often). But Ready Pac had cut costs in the wrong areas, and sales plummeted.

When he came on board, Sarsam took a look at the company’s history. It was filled with innovation, like when it introduced the now-common complete salad kits, and the triple-wash system for its greens. Sarsam noted the last real innovation happened back in 2007.

For a company that is built on being innovative, losing that edge was a disaster. So he set about turning that around, and doing so as fast as possible.

To Sarsam, the key to innovation is having the right people who are supported with good technology and a company that’s adaptable to change.

He pointed out that the right people aren’t necessarily the ones who are the Thomas Edisons of the world. Innovation doesn’t necessarily mean you are inventing completely new concepts. After all, Amazon did not invent anything key to its success — books, home delivery, or online buying. But it was incredibly innovative at giving customers what they want. So, his first steps to saving the company was to invest in hiring staff that cared about their work and compensating them accordingly.

He didn’t lose sight of the need to keep costs down, but he looked for improving efficiency and cutting wastes instead of hacking deep into the payroll.

The next stage of his comeback strategy was to institutionalize communication at Ready Pac and to then better understand customer needs so everyone worked together to deliver on those needs.

Ready Pac conducted research on what customers want from their produce. What it learned is that customers not only want produce to be healthy, but be an indulgence, create convenience in a busy life, and offer value for the money spent.

When the new team at Ready Pac concentrated on meeting those goals, innovative practices quickly returned. In 2013, it won an award for peel and reseal clamshells. In September 2017, it’s introducing Fresh Prep’d Soup Kits and Fresh Prep’d Wrap Kits. Think Blue Apron or Hello Fresh, except located in grocery stores. These kits will give consumers everything they need to have fresh soup or burritos from scratch.

Sarsam says he finds inspiration from the book “Money Ball,” which he has been known to make required reading for his staff. The big message he takes from “Money Ball” is that you need to resist following the path that’s least likely to fail, and instead pursue whatever is most likely to succeed. Avoiding failure doesn’t lead to innovation. Reaching for success does.

Another analogy he spoke on was the narrow timeline between the first successful flight at Kitty Hawk and landing on the moon 60 years later. As remarkable as both those accomplishments were, the moon landing would not have happened with thousands of innovations during those 60 intervening years.

And if his company can tap into that spirit, Ready Pac will still be innovating far beyond 60 years into the future.

 

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