Chairman and chief executive officer, Kellogg Company
Nationality: American.
Born: November 4, 1953, in Havana, Cuba.
Education: Attended Monterrey Institute of Technology.
Family: Son of Pedro (pineapple plantation owner) and Olga (Fernandez) Gutierrez; married Edilia Cabrera, c. 1975; children: three.
Career: Kellogg Company, 1975–1982, sales and marketing representative; 1982–1983, supervisor of Latin American marketing services; 1983–1984, manager of international marketing services; Kellogg de Mexico, 1984–1989, general manager; Kellogg Canada, 1989–1990, president and chief executive officer; Kellogg USA, 1990, vice president, product development; 1990–1993, vice president, sales and marketing; 1993–1994, general manager, cereal division; Kellogg Company, 1993–1996, executive vice president; Kellogg Asia-Pacific, 1994–1996, president; Kellogg Company, 1996–1998, executive vice president, business development; 1998–1999, chief operating officer; 1999–, president and chief executive officer; 2000–, chairman of the board.
Address: Kellogg Company, 1 Kellogg Square, Battle Creek, Michigan 49016; http://www.kelloggcompany.com/kelloggco.
Coming up through the ranks of Kellogg Company, Carlos Gutierrez repeatedly proved his ability to increase sales and output through innovative ideas. Wherever Kellogg assigned him, which was all over the world, Gutierrez corrected problems that prevented company growth, be they in manufacturing or marketing. General Mills was on the verge of becoming the leading cereal maker when the Kellogg board of directors appointed Gutierrez chief executive officer and president. True to his ethic Gutierrez quickly mapped out and set in motion a strategic plan to put the company on a new course. The successful implementation of the plan by this "charismatic and approachable executive," stated an article in the St. Louis Post-Dispatch, "has won the admiration in business circles for a flagging company" (April 7, 2004).
Learned Work Ethic from Father
Gutierrez was born into a Cuban family that enjoyed a comfortable lifestyle. His father, Pedro, owned and managed a pineapple plantation, and his mother, Olga, cared for Carlos and his older brother. Life changed suddenly in 1959 when Fidel Castro overthrew the regime of Fulgencio Batista, created a communist state, and confiscated businesses, including the Gutierrez plantation. The following year the Gutierrez family fled to Key Biscayne, Florida, believing they would soon be able to return home. For a time they lived as if they were on vacation; young Carlos learned English from the hotel bellhop. When it became apparent they would not be going home, Pedro uprooted his family numerous times as he pursued job opportunities. He eventually accepted a position with the Heinz Company in Mexico and later started his own business. Gutierrez worked in his father's business before a recession made him decide to leave. Gutierrez credited Pedro, whose work ethic was never to give up and always to deliver results, as being his mentor.
Delivered Results
Gutierrez was studying business administration at the Monterrey Institute of Technology in Queretaro, Mexico, when a friend told him Kellogg was recruiting employees for sales and marketing positions. Gutierrez knew something about sales, having sold magazine subscriptions in high school. After he was hired as a sales representative for Kellogg de Mexico in 1975, Gutierrez dropped out of college without earning a degree and dedicated himself to delivering results for Kellogg. His outstanding performance in sales and marketing assignments drew the attention of corporate headquarters in Battle Creek, Michigan. Gutierrez was transferred there in 1982 and made supervisor of Latin American marketing services. The next year he was promoted to international services manager.
In 1984 the 29-year-old Gutierrez was given the opportunity to test his entrepreneurial abilities on a larger scale as general manager of Kellogg de Mexico. The plant in Mexico routinely finished last according to company standards. Gutierrez consulted with employees about work conditions and then shut down the plant. When the revamped plant reopened three months later, new production and cleanliness standards were in place. Within two years the plant was performing at peak standards and serving as a model for Kellogg's largest operations.
Recognized for the turnaround at the plant in Mexico and for other achievements, Gutierrez was appointed to a series of high-level positions. In 1989 he was named president and chief executive officer of Kellogg Canada. Back in Battle Creek in 1990 he served as corporate vice president of product development and then as vice president of the Kellogg Company and executive vice president of sales and marketing for Kellogg USA. He was promoted to executive vice president of Kellogg USA and general manager of the cereal division in 1993 and to executive vice president of the Kellogg Company and president of Kellogg Asia-Pacific in 1994. Two years later he became executive vice president of business development. Gutierrez attained the position of president and chief operating officer (the first COO in six years) in 1998. He became a member of the board of directors and president and chief executive officer in 1999.
Reinvented the Company
Gutierrez, the youngest CEO in Kellogg history at age 43, faced the challenge of reversing the downward spiral in which the respected company found itself. Kellogg had been under-performing for more than five years and was losing out to its major competitor, General Mills, in volume of products—a position that previously had seemed impossible. Kellogg, the world's major cereal company, had not tried to counteract the two major factors contributing to its decline: the increase in sales of lower-cost generic and store brands of cereals that were knockoffs of Kellogg brands and the fact that because of busy lifestyles fewer people were eating a traditional breakfast of milk and cereal. The decline had a dramatic effect on stock prices, decreasing them 45 percent in 1999 alone.
Pledging to boost profits, Gutierrez developed a strategy that would effectively reinvent how Kellogg did business. First he sought to improve the balance sheet by scaling back operations and instituting a plan to reduce debt. Gutierrez remarked to Elizabeth Llorente in an interview in HispanicMagazine.com about closing Kellogg's oldest cornflake facility, a move that saved the company millions of dollars while laying off five hundred workers: "I was given the job to make difficult decisions. I felt it was my duty to do it. The worst thing I could have done for all the company's employees and the community was not to act" (January/February 2004). To reduce debt, the company began "managing for cash" so that "the amount of money tied up in inventory, accounts receivable and accounts payable" was reduced. When it could, Kellogg used its own assets for capital expenditures. The South Bend Tribune reported this approach "has freed up enough cash to pay down $1.6 billion in debt" (April 1, 2004).
Gutierrez increased Kellogg's presence in noncereal categories. In the wholesome snacks category, the company developed products such as Special K bars and made judicious acquisitions. The acquisition of Keebler in 2001 expanded Kellogg's lineup of snack foods and provided the company with a direct distribution system that helped implement Gutierrez's vision of selling products in places besides supermarkets so that anyone could have a breakfast bar anywhere. Gutierrez also steered Kellogg into offering healthful foods. The company acquired Worthington Foods, a maker of soy and vegetarian products, and Kashi, a brand of natural foods. Gutierrez told Supermarket News: "Most of all, we want to stay focused. Unlike other food companies, we are focused on key categories and capabilities instead of being a broad food conglomerate" (July 21, 2003).
Gutierrez directed the Kellogg toward brand building and launching new products to increase sales. Cross-functional teams of market researchers, food technologists, and engineers were charged with developing products that could not be easily converted into store brand products. They also were to consider health trends. In 2004 Kellogg planned selling low-carbohydrate and reduced-sugar cereals. Brand building also played an important part in product development. Many of the new products developed were spinoffs from current brands, such as Rice Krispies Treats snack bars and new varieties of Special K. To ensure Kellogg maintained its well-known and trusted name in its key categories, Gutierrez increased marketing efforts and entered into licensing agreements with leaders in children's entertainment, including Disney and Nickelodeon. The measure of company success ceased to be the volume (tonnage) of products sold and became the value of Kellogg products.
Turnaround
The new strategic plan executed by Gutierrez produced results. Between 1999 and 2003 sales increased 43 percent and earnings 131 percent. In 2004 analysts once again recommended investors buy the climbing Kellogg stock. Because of his success there was speculation Gutierrez might be lured by a larger company to bring about another turnaround.
Sources for Further Information
Fagnani, Stephanie, "SN's Power 50: Carlos M. Gutierrez," Supermarket News, July 21, 2003, p. 64.
Llorente, Elizabeth, "The Breakfast Champ," HispanicMagazine.com, http://www.hispaniconline.com/magazine/2004/jan_feb/CoverStory.
Martinez, Miriam, "Carlos Gutierrez: From Exile to Corporate Leadership," Latino Leaders, December 2003, http://articles.findarticles.com/p/articles/mi_m0PCH/is_6_4/ai_113053399.
Pande, Shamni, "It's Crunch Time for Kellogg," Brand Equity, March 24, 2004, http://economictimes.indiatimes.com/articleshow/577977.cms.
Prichard, James, "CEO Restored Kellogg's Snap: Gutierrez Seen as Catalyst to Company's Comeback," South Bend Tribune, April 1, 2004.
——, "He's Gr-r-reat!" St. Louis Post-Dispatch, April 7, 2003.
Taylor, Alex, III, "Kellogg Cranks Up Its Idea Machine: To Grow, the Company Needs New Products, but Will Fiber-Enriched Potato Chips Be a Hit?" Fortune, July 5, 1999, p. 181.
—Doris Morris Maxfield
