Regional Oral History Office University of California

The Bancroft Library Berkeley, California

Tyler Johnston

THE DREYER’S GRAND ICE CREAM ORAL HISTORY PROJECT

Interviews conducted by

Victor Geraci

in 2011

Copyright © 2013 by The Regents of the University of California

Since 1954 the Regional Oral History Office has been interviewing leading participants in or

well-placed witnesses to major events in the development of Northern California, the West, and

the nation. Oral History is a method of collecting historical information through tape-recorded

interviews between a narrator with firsthand knowledge of historically significant events and a

well-informed interviewer, with the goal of preserving substantive additions to the historical

record. The tape recording is transcribed, lightly edited for continuity and clarity, and reviewed

by the interviewee. The corrected manuscript is bound with photographs and illustrative

materials and placed in The Bancroft Library at the University of California, Berkeley, and in

other research collections for scholarly use. Because it is primary material, oral history is not

intended to present the final, verified, or complete narrative of events. It is a spoken account,

offered by the interviewee in response to questioning, and as such it is reflective, partisan, deeply

involved, and irreplaceable.

*********************************

All uses of this manuscript are covered by a legal agreement between The

Regents of the University of California and Tyler Johnston, October 26, 2011.

The manuscript is thereby made available for research purposes. All literary rights

in the manuscript, including the right to publish, are reserved to The Bancroft

Library of the University of California, Berkeley. Excerpts up to 1000 words from

this interview may be quoted for publication without seeking permission as long

as the use is non-commercial and properly cited.

Requests for permission to quote for publication should be addressed to The

Bancroft Library, Head of Public Services, Mail Code 6000, University of

California, Berkeley, 94720-6000, and should follow instructions available online

at http://bancroft.berkeley.edu/ROHO/collections/cite.html

It is recommended that this oral history be cited as follows:

Tyler Johnston “The Dreyer’s Grand Ice Cream Oral History Project”

conducted by Victor Geraci, Regional Oral History Office, The Bancroft

Library, University of California, Berkeley, 2013.

Table of Contents—Tyler Johnston

Interview #1 February 15, 2011

[Audio File 1] 1

Family and educational background—UC Davis, UC Berkeley—Jazz and other

interests, and “people skills”—Junior executive training program at Macy’s—

Retailing, merchandising, consumer analysis—Promotion at Macy’s—

Northwestern MBA program.

[Audio File 2] 19

Northwestern, cont’d.—Training in marketing—Internship at Jewel—Wife

Melanie and her career—General Mills—Brand management position at Kraft—

Melanie’s work at Leo Burnett—“The mayonnaise business,” snackable cheese,

satirizing corporate absurdities—fun.

Interview #2 February 25, 2011

[Audio File 3] 38

From Kraft to Dreyer’s—Meeting Rick Cronk—Team work at Dreyer’s—

Meeting Gray Rogers—Accepting position as VP of marketing at Dreyer’s—

Excitement, people, challenges—Initiation—Marketing and planning for the long

term—Personal relationships and success at Dreyer’s—The Grooves as good

business—Entering the New York market—Centralization and de-

centralization—The Grooves in action.

[Audio File 4] 56

Building brand management side of Dreyer’s—New product development—Ben

& Jerry’s—“Hiring smart”—Explosive growth at Dreyer’s—Regulations—

Failure of some new products—Regional markets: Atlanta, Chicago—

Unilever/Nestlé—Changing strategy—Creative PR and advertising campaigns.

[Audio File 5] 76

Mergers and acquisitions in the grocery business—Regional plants—Celebrating

success—Mother of All Parties, Hoopla—Ben & Jerry’s—Creative brand

marketing—Godzilla and Starbucks and other partnerships—Promotion of

Dreyer’s—Going public—Research and development, new products, Dreamery

and the super premium business.

[Audio File 6] 93

Unilever/Nestlé, Ben & Jerry’s, Breyers, Haägen-Dasz, and Dreyer’s—Making a

deal—FTC regulations—Complexities of a joint venture—Repositioning—“An

amazing ride”—Career trajectories of Dreyer’s management team—Corporate

values—Values in practice—Failing forward—And trust: “Kind of magical.”

[End of Interview]

1

Interview #1 February 15, 2011

[Begin Audio File 1]

01-00:00:12

Geraci: I am Vic Geraci, food and wine historian from the University of California

Berkeley’s Regional Oral History Office. Today’s date is Tuesday, February

15, 2011 and seated with me is Tyler Johnston. Mr. Johnston served as the

executive vice president of marketing for Dreyer’s Grand Ice Cream. First of

all, thank you for doing this. This is—

01-00:00:30

Johnston: Absolutely.

01-00:00:30

Geraci: —becoming part of our project. Let’s go ahead and start with your family,

your birth, your parents, growing up, a little bit about the background about

you, your education, and then from there we’ll move into your professional

career. So I’ll just let you begin.

01-00:00:47

Johnston: All right.

01-00:00:47

Geraci: Begin at the beginning.

01-00:00:48

Johnston: Begin at the beginning. Well, I’m a native of Northern California and I’m

probably squarely in the middle of the middle class baby boom in Northern

California. So I was born in Oakland in 1953, but my family at that time lived

in Walnut Creek and that’s where I grew up. So I grew up in Walnut Creek at

a time when there were walnut trees, there was a creek as opposed to shopping

centers and banks. It was a town of maybe 20,000 people. Some parents

commuted by Greyhound bus into San Francisco because BART was not built

at that time. My dad was from Vancouver and had been in a few businesses,

but generally in the selling side of businesses. Largely in insurance and then

real estate and then for many, many years was a real estate agent and broker.

Again, at a time when California real estate in those days meant a post-war

building of tract homes out in the suburbs, so he was often out at

developments.

01-00:02:12

Geraci: Well, that’s the East Bay over the hill was really starting to develop.

01-00:02:17

Johnston: Right, right. [telephone ringing] I forgot there was a phone in this room. My

mom is from Kansas and she came from a fascinating sort of family with a lot

of pioneer history of wagon trains out to Kansas. Her dad was a country

lawyer who became the attorney general who at one time had a promising

political career back around the FDR time. My mom had four sisters. My

mom studied in Kansas at the University of Kansas but then had a bug for the

2

television and radio business and so she drove out here with a friend to

Hollywood way back to sort of get into the radio business if they could. She

was one of the early women in the radio business. Not as an on-air talent but

as stage manager and producer and that sort of thing.

01-00:03:34

Geraci: That makes her a little bit of a feminist at this point.

01-00:03:38

Johnston: Yeah.

01-00:03:38

Geraci: For that era and that time, to strike out on her own like that for a profession,

that’s—

01-00:03:44

Johnston: Almost all the sisters were that way. Her other sister, who is my aunt, who is

still alive, was even more so that way. Just for two minutes. She came out to

Mills College, then started as a journalist. Was the first female sports

journalist over in San Francisco. Then developed an affinity for photography

and auto racing and became an auto race driver and a journalist and is still

writing. I just saw her this weekend at the auto show in Chicago. She’s eighty-

two and she still writes for AutoWeek and flies around the world to try out

new cars. So there was certainly that bug in the family. My mom had all of

that but I often think she went down the road more traveled, in that once she

met my dad she got married and I think those early aspirations of the radio

career sort of faded, at least temporarily. She channeled them back later after

my brother and I were born. There’s two of us. I have an older brother. My

mom worked for a while just in department stores and things like that, but

then she got her teaching credential and became a very successful teacher,

predominantly in middle school out in Walnut Creek. While she taught lots of

subjects, leadership and English, her main love was drama and she was a

drama teacher, a director. A director at the civic arts theater early on. One of

the founders of the young repertory company out there. So theater and drama

are also a theme—

01-00:05:32

Geraci: A very big part.

01-00:05:33

Johnston: —that kind of run in my past. I have one brother. We’re very different, as

siblings often are.

01-00:05:42

Geraci: What’s his name?

01-00:05:43

Johnston: Robert.

3

01-00:05:43

Geraci: Robert.

01-00:05:44

Johnston: He’s a chemical engineer. Very quantitative. That’s one of the main

differences right there. And he still lives out in San Ramon Valley. And my

upbringing was very straight ahead. That’s what I mean by being right in the

center of the baby boom. We weren’t well off but we weren’t poor. We had a

lot of family vacations but they meant camping on Mount Diablo, not

traveling around the world.

01-00:06:20

Geraci: This is the typical 1950s middle class white picket fence family story.

01-00:06:25

Johnston: Exactly. Harvesting walnuts for the summer job and the like. And so I went

through grade school and intermediate school, as it was called then, and high

school all in Walnut Creek. I was pretty much a good student. My mom was a

very strong force in our life. She was a teacher and she was going to have kids

who studied.

01-00:06:55

Geraci: Especially a middle school teacher.

01-00:06:56

Johnston: Either qualitative or quantitative, regardless of skill set, we studied hard. So I

had good grades through school. Both my brother and I picked up music early

on. Played trombone. Started in about the fourth grade. Was picked for

trombone probably the way everybody got their instruments back then. You

stood in line and the band director looked at you and decided what you were

going to be. So maybe I had one arm longer than the other or something. I was

still short at that time, so I don’t know. But I ended up playing trombone. So

music was a big part of my education. I was always playing in groups, on our

bands and select groups around the Bay area and things like that. I also

dabbled in theater a bit. Enough to sort of win awards at high school as far

as—sort of fine arts awards and things like that. But my major interest was

music and then just trying to get decent grades.

I went through high school at an interesting time. I graduated in 1971 so I was

catching the tail end of the sixties and, of course, a whole lot was happening,

particularly through the tunnel, as one would say, in Berkeley. And a lot of

my teachers were Berkeley, lived in Berkeley, my high school teachers. And

so when there would be something at the Cal campus, tear gassing or the like,

they would come to school, out to the suburb, and be quite wound up about

what was going on. And so while I went through a suburban experience

around that time of the late sixties, I was always proud to say that the Grateful

Dead played at my high school and that only cost three dollars. We had

some—

4

01-00:08:57

Geraci: Now, that’s amazing.

01-00:09:00

Johnston: And I joined their fan club and they never sent me a darn thing. And so I

never became a Deadhead. It’s the early marketer, I guess. But that was kind

of an interesting time because there was a lot of turmoil and a lot of classes, in

particular, were interesting. I had a teacher in eighth grade, an English teacher

in eighth grade, that was so frustrated with what was going on at high school

in terms of English—this will make sense in a second—that he said, “If you

guys—” His bribe was, “If you study hard in this class in eighth grade and you

really put your mind to it, this will be the last time you have to really study

hard in English.” Now, that’s a nice incentive when you’re in eighth grade, so

I studied pretty hard in eighth grade. And I saw what he meant when I got to

high school. When I got to high school, our English curriculum was elective

and you had about ten classes you could choose; film and study hall. Only one

of them really pertained to sitting down and reading books and writing about

them. I took one class which was film. The teacher had taken all the furniture

out of the—all the desks out of the room and put in couches. Of course, this

teacher lived in Berkeley. And we watched films and then it segued into doing

improv comedy. So I got A’s in English in high school for doing improv

comedy, which is later why, when I got to college, I had to take what was

called bonehead English because I basically had a four-year hiatus of English.

But anyway, that’s a little bit of the high school experience.

It was always assumed I would go to college and it was largely assumed I’d

go to somewhere in the University of California system. My folks really made

enough money to not necessarily qualify for a lot of scholarship money but

not enough to really afford a private university. And at that time, almost

everybody I knew, you either aimed for one of the Cal campuses or you went

to one of the state colleges, as they were known. My brother went to UC

Davis. [telephone ringing] Sorry about the phone. And I visited him quite a

bit. Liked that a lot. So that was my first choice when it came down to

applying. Berkeley was not anywhere on the screen for me because most

parents in the suburbs were saying, “Please don’t go to Berkeley or Santa

Barbara,” because they were blowing up banks. But I got into Davis and I

went. And that’s where I went in 1971.

Not knowing what I would major in, thinking I would be pre-something, law

or maybe medicine. My brother was more science oriented so I thought,

“Well, I’ll take some of the science classes to head down the path.” And so

then college for me was sort of like being in this long hallway where you try a

doorway and then if it opened and no one yelled at you, you kind of went

through it academically. If it didn’t open or you opened it and someone yelled

at you, you said, “Well, maybe that’s not for me.”

01-00:12:26

Geraci: I’ll close this door.

5

01-00:12:27

Johnston: That was chemistry. So the chemistry door was a little tough for me to open.

Calculus somewhat. And I just kept trying different things. I said, “Well, I

guess I’m not going to be pre-med after all,” and started taking different

classes. I was always somebody who wanted to take a diversity of things

though. College for me was great. I really enjoyed it. I remember walking,

when I first got to Davis, walking into my very first lecture which was

chemistry 1A in the largest hall at Davis, which was 200 students. Coming up

the steps with a huge smile on my face and an upper classmen coming out of

the lecture hall from the previous class. He looked at me. He says, “What are

you smiling about?” [laughter]

01-00:13:16

Geraci: [laughter] Get real.

01-00:13:19

Johnston: That was my first day. I was like, “Oh. This looks like it’s going to be pretty

fun.” So I did try a lot of things but I quickly sort of shifted from the sciences

more toward—I took an economics class that I really liked. I took some

history classes that I really liked and I started developing a little bit of an

affinity over time at Davis for more of the social sciences, psychology and

economics. However, as I looked at UC Davis in those days, it didn’t have

any degree [in business]. If you wanted to major in business, you could piece

together a degree in agricultural economics. But I wasn’t really big on

agricultural economics. So while I had a blast, I loved UC Davis. I had great

friends, great roommates that are still close friends today. I played a lot of

jazz, of course, up there, and loved living there. I looked at it and said, “I can’t

really stay here because I’m not finding the precise major.” I guess as a slight

aside on that— I thought for a while about majoring in the arts. My mom

pretty much talked me out of it. Again, she’s a pretty strong force and she had

seen enough masters in fine arts over the years unemployed.

01-00:14:58

Geraci: Or underemployed.

01-00:15:00

Johnston: Or underemployed is probably a better way to say it. So she kind of pointed

me a different direction on that. But nonetheless, I kept music as a big part of

what I was doing. But coming into my sophomore year, I got very involved.

Oh, yeah, I was very involved in lots of stuff. I was asked to join one of the

parts of the student government that ran the program that brought speakers to

the school. All sorts of different kinds of speakers. The Speakers Forum it was

called, and it was run by a guy who was in my dorm, a year older than I, and

he wanted me to join and then he wanted me to take it over from him later.

And that was fascinating, because I’m pretty young and I’m meeting Jane

Goodall and Ralph Abernathy. I have a great story about coming down here to

pick up Ralph Nader and drive him up from Berkeley in a car that didn’t have

seatbelts. [laughter]

6

01-00:15:58

Geraci: [laughter]

01-00:15:59

Johnston: It was a university car. Oh, god. That was one of my more fun experiences.

And, of course, Ralph Nader never slept a full night. He would just catnap. So

you’d be talking to him on the drive up and then turn around and find out he

was asleep in the car. And he’d just grab ten minutes every now and then. But

I met all sorts of nationally renowned folks. So I was very involved in the

school. It was very fun. But didn’t see a degree there for me. Most of my

buddies and roommates were either going toward medicine or engineering.

They were all happy in their academic track. So I looked around and saw that

Berkeley had a business program. At that time it was a separate business

school at Berkeley. It wasn’t the Haas School but it was just a separate

business school. In those says, it was easy to transfer around the Cal

campuses. But for the business school at Berkeley you did have to apply. So it

wasn’t just go put your name in the box and transfer campuses. You did have

to fill out an application. So I decided now is the time to do that. I should get a

degree in something that is closer—

01-00:17:16

Geraci: It’s like your junior year?

01-00:17:18

Johnston: Yeah, for my junior year. So I picked everything up and moved to Berkeley.

Knew just a couple of people there. And came in therefore as a junior into the

business program, which was new. And then, of course, I think what I brought

with me as my way of getting settled was music again. I joined the Jazz

Ensembles program there, which was very active. It was a student run

program. Really good jazz program which I’m, as a tangent, still involved

with today. And hit it pretty hard. I decided at that point that I ought to focus

on this. I wouldn’t say I just became a total bookworm but I took it pretty

seriously. I wanted to do well. I didn’t know what I wanted to go do but I was

starting to get a sense of kind of what are some of the things I like to do. I

liked the world of business. I liked the marketing classes a lot. And in my

other life, in the jazz program, I became very involved. I was asked to be the

personnel director for this giant jazz festival that they were having for the first

time. So it meant organizing 120 jazz musicians to do work, which was—

01-00:18:42

Geraci: [laughter] That’s herding cats.

01-00:18:43

Johnston: Yes, that’s herding cats. That ended up being on my application to business

school as an achievement later on. And I eventually, the next year, became

president of the Jazz Ensembles program. And so I started to realize I like

being around people. I like the complexity of that and sort of the chaos of that

and over here academically I was studying business, and liking the marketing

element of that. But the nice part about the Cal program at that time was you

7

could get a business degree but it was still very much a bachelor science and

liberal arts. So a lot of encouragement to take natural science classes, geology,

psychology, sociology. I was still trying to take kind of a broad—

01-00:19:34

Geraci: Still a traditional liberal arts student.

01-00:19:35

Johnston: Yeah, yeah. With an emphasis, clearly. I graduated with a degree in business

but when I look at that whole four years it was kind of a broad cut of a liberal

arts degree and a fair amount of artistic stuff around the edges, with music

being kind of a theme all the way through it. Music organizations.

And so that takes me up to 1975 and I graduated in four years and started off

then in the real world of, okay, now I need to work for a living. I bring this up

because now I have a college senior son and I’m thinking back on what I was

going through at that time. But one of the things my parents did, just to come

back to them. My dad continued to sell real estate and early on got a job as the

realtor at Rossmoor, the retirement community over at Walnut Creek. And my

parents were reasonably young at that time but they sort of fell in love with it.

He was working out there selling places. And so by the time I graduated, in

fact the year I graduated, they sold our family home and moved to Rossmoor.

So I thought it was a very clever way of blowing up the bridge to prevent—

01-00:20:53

Geraci: [laughter]

01-00:20:56

Johnston: They said, “You guys can come visit but you’re not allowed to live there. It’s

not us. It’s Ross—”

01-00:21:05

Geraci: It’s the rules.

01-00:21:06

Johnston: It’s the rules. [laughter] Here’s a guest pass. So there’s never any question that

it was time to—I got to go do something. It was never even a question of

returning home. It was all about, “Okay, time to move on.” I started to just do

interviews and my interviews—in those days there were interviews on college

campuses at Cal. You’re in a temporary building. It was built after World War

II and was still considered temporary. You go to the placement office. And so

I interviewed in almost anything that looked friendly toward marketing or

sales but I think back on it now and they were pretty goofy. Dean Witter in

stock sales. Oil companies were big to come by for sales. And then retailers.

And two retailers came. Emporium, a department store, and then Macy’s

department stores. And they had a training program and it caught my eye. And

I will also say I wasn’t looking outside of whatever the on campus interviews

were. I wasn’t networking with people. Those were all more modern tools.

And I interviewed with Macy’s and got to the second interview and kind of

8

liked what I heard, as crazy as that sounds. I never thought I would go into the

retailing business or anything around the apparel business.

In fact, my mom would crack up because when she was in the department

store business, or anytime she ever took me to a department store, I would

instantly start to yawn and yawn the entire time. And it would just be a family

joke. I would go down to buy some new jeans or something and there I am

yawning. And she says, “And you’re going to go work at a department store?

You’ll be sleeping on the job the whole time.” So that was kind of funny but I

think she was actually pleased I was employable.

And so the interview was pretty intense, because they were interviewing for a

class of people. They wanted to hire about thirty kids.

01-00:23:35

Geraci: So they had like a leadership training program.

01-00:23:36

Johnston: Yeah, yeah. I think it was called the management training program and you

would come in as a junior executive. I later learned what junior executive

meant. You’d go through some combined training with your class and then

you’d start through this rotation of assignments. The idea would be you’d be a

trainee for a while and then you’d become a department sales manager

somewhere in a store and then you’d get into the buying office and move

down the merchandising track. And if you kept on, then you’d go back into

store management and back and forth. And I don’t know how much I thought

through. It was a job opportunity. It felt good in that it was, okay, high pace,

lot of people, marketing related and kind of fun and had a creative aspect to it.

And they were going to pay me something.

01-00:24:38

Geraci: [laughter] There’s the big one right there. They were going to pay me.

01-00:24:42

Johnston: The offer letter was $7,600. But you get an employee discount and you’re a

junior executive.

01-00:24:57

Geraci: A great title.

01-00:24:59

Johnston: Yes. Excuse me, it was $7,800. I have the letter in this drawer over here. And

then they sent a second letter and said, “Good news. We’ve increased the

salary to $8,400 a year.” By the time I started out of school, they had changed

that. There’s one part in the middle of college I didn’t go into. Can I do that

briefly?

01-00:25:28

Geraci: Please do. Please do.

9

01-00:25:29

Johnston: I forgot about it. Because I did have some business experience in my

summers. I was a camp counselor for one summer. But my college roommate,

the first guy I met when I went to Davis, was a very unusual guy. He looked

like a hippie but he was an Eagle Scout out of Monterey. Guy named Tony

Stearns. Had a beard out to here and was already losing his hair and rode a

sting ray bicycle around Davis. If you can imagine that look.

01-00:25:58

Geraci: Whole image.

01-00:25:58

Johnston: And we became best friends. We were put together as roommates. We became

best friends. He had a business. He was always a business person but he had a

business making handcrafted leather goods. Belts, purses, back in the day.

And he’d go to fairs around the country and sell these things. So I ended up

starting to work with him in that business while I was in college. One of the

best summer jobs I ever had, he and his brother and I toured the country in a

van for eight weeks and we spent one night in a hotel. That was the night

Nixon resigned actually.

01-00:26:37

Geraci: You wanted to watch some TV.

01-00:26:39

Johnston: Wanted to watch TV and have a real good shower. And we spent eight weeks

going across the country to three major state fairs and setting up for two

weeks. Usually it was the Hari Krishnas next to us and the Mormons selling

lemonade on the other side. We’d be there with our hippie belts and purses.

And his brother had a beard and no hair and he had a beard. And we all wore

jeans and blue work shirts and then we started joking with people that we

were actually on a work release program from prison. It was the most fun but

it was a fantastic business experience because it really was the retailing

business. Quite literally, set up shop, sell, see what works, what doesn’t work.

I know it sounds goofy but—

01-00:27:29

Geraci: You were learning to interact with the people—

01-00:27:28

Johnston: Yeah. And how you merchandise.

01-00:27:29

Geraci: —at the ground level.

01-00:27:31

Johnston: And how you price stuff, how you make a profit, and a whole lot of

interaction. You think about a massive fair like the Allentown, Pennsylvania

state fair at Allentown. You see America in those two weeks. Anyway, so it

was a fantastic experience. So I did have elements of those kinds of business

10

experiences, as well, because Tony was constantly in business my first two

years I lived with him and then we’ve remained friends to this day.

So fast forward back to the retailing business. I took a break but I was broke

after college. I didn’t pay for anything in college. My parents said, “We will

pay for college.” So I didn’t work. I had a lot of off the dole kind of work that

I was doing on behalf of different programs, the jazz program and stuff, but I

didn’t have to work, which was really a blessing and I’ve actually modeled

that. But they also made it clear that that was it. College is what they could

afford and if you want to do something beyond that, you’re on your own.

So I needed to start work right away. So I graduated in June of ’75 and started

at Macy’s in August of that year and jumped full speed and headfirst into the

wacky world of retailing, which I look back on and even at the time I really

enjoyed. I learned a lot. And it was crazy. It was sixty hour weeks easily. As a

junior executive, what that meant was you weren’t union and they could work

you as long as they wanted to. And the employee discount was very cool,

except it took that $8,400 a year that you were making and very quickly you

found out that you were spending it on crock pots and designer suits that were

in your department and you couldn’t pass up the deal because it was on sale

and you got 20 percent off. So I was probably better dressed than most of my

friends and had a better kitchen but I wasn’t really saving any money. And I

was working all the time.

Fun group of people. Crazy. Twenty-five, thirty people, very competitive, all

trying to position themselves. So I learned a lot about, okay, the body politic

that goes on. And very high paced. An interesting business in that there were

good bosses and there were some really crappy bosses. There were seat of the

pants merchants that were mysterious, many of whom became senior

executives, and then basically their approach was because I went through all

that crap, you have to go through all that crap. So you’re starting here and

you’re going to work your way up that same ladder. I don’t care how smart

you are or where you came from.

01-00:30:54

Geraci: If I had to do it, you have to do it.

01-00:30:56

Johnston: Right. And then there were some executives there that were different, that

came in that were either just really pleasant people in the buying office or, in

one case, and I’ll get to this one guy, an MBA who had come in and was

trying to bring a little more of an intellectual approach to some of the stuff

that was going on. But great training. You take a few classes, the next thing

you know you’re ringing on a register in San Francisco downstairs in the

middle of a sale and you barely know how to run the register and everybody’s

watching you to see whether you can swim and how you interact with people.

And people generally are upset when they’re in department stores. This was

11

long before Nordstrom made it cool to be positive in terms of customer

service. So just wild stories. It was the late seventies. Disco was going crazy

in San Francisco. Cocaine was in the workplace. People were sleeping with

their bosses in the buying office as a way to get—it was like, oh, my god, this

is crazy.

01-00:32:15

Geraci: From this middle-class boy from—

01-00:32:17

Johnston: Yeah. A long way from—

01-00:32:16

Geraci: —Walnut Creek.

01-00:32:18

Johnston: —the walnut tree. And I wasn’t yawning either. I was only yawning because I

was exhausted. But very quickly I got placed, which was good. I had some

good feedback. I remember one woman who was a peer in the group came to

me and she said, “You’re going to do great in this because you care about

people.” And I was like, “Well, that’s interesting,” because we were just

friends going through the program together. So somehow I was exhibiting

some affinity for working with people. I got placed very quickly in a

department job to run a men’s department in San Leandro at Bay Fair. Newly

remodeled store, so the eyes of the chain were looking at—and Macy’s

California at that time was a rock and roll division. It was the success story in

Macy’s, believe it or not. This goes back so far. But the guy who had turned it

around was now the head of Macy’s New York, but what he did in California

was the footprint for transforming Macy’s across the country. So it had a lot

of cachet in the business. So I got placed early and it was great. Everybody

said, “You got to get a job in the downtown store because that’s where you

can be seen,” because all the buying offices were in the store.” They weren’t

in an office, they were in the store. They were all hidden behind the

stockrooms and stuff, these little rabbit warrens of cubicles and people

screaming on the phone to vendors in New York early in the morning. It was

just “insane.” You don’t want to go to a branch store because you’ll be

forgotten.

Well, so the job comes up. They say, “We want you to go to Bay Fair. It’s

kind of brand new. New department, new store. Just recently remodeled. It’s

about to have its debut with all the executives coming there.” And I wasn’t

going to say no. So within a month of starting I was now a manager. Great

experience. You come in and here’s your team, and your team ranges from

teenagers and part-time people to guys over here selling men’s suits who have

seen twenty guys like me come and go, and they could give a crap that I’m the

new—

12

01-00:34:32

Geraci: You’re just the new raw meat that’s just going to—

01-00:34:33

Johnston: New guy, and, “What are you going to teach me. I’ve been selling suits for—”

And so as my first experience at trying to pull a team together, if I think back

about it, and great lessons. Some very positive, things that worked, some

things you look back on and go, “Boy, that was really stupid. I have to do that

differently.” In fighting with the store management, assistant manager of the

store who didn’t like the managers, so you quickly became like the kid who

was in between fighting parents. Lots of interesting experiences.

01-00:35:13

Geraci: This is a good trial and error education.

01-00:35:13

Johnston: Yeah. So my first breakout was I started to make observations about what was

going on. The buying office is pretty far away. I’m in this branch store. And

there’s just stuff that’s really strange. I have a few shoe department, and I

never have the right assortment. Never. Because they’re in San Francisco,

they’re marking in a book, “Send two dozen of these to these stores,” and

that’s about as sophisticated as it was. So I decided, “I got to tell them that we

need to do this differently.” So I wrote a report and I decided to use my

limited marketing knowledge from Cal and I said, “I’m going to study my

consumer.” I wrote this report. I think I still have a copy of this thing. And it

was called The Bay Fair Men’s Shoe Consumer. I typed it up and it was about

five pages of here’s who I think is in this store and here’s our assortment and

why it doesn’t work and here’s what I think we need. I tried to write it in

whatever I had learned about business writing and with an executive summary

and a few of those things. And I typed it up and I sent it over to the buying

office. Well, this apparently had never been done before. I didn’t send it to the

president of the company. I sent it to the buying office, and the buyer loved it

and just said, “This is fantastic. I wish all of our managers—“ there were only

twelve stores at that time—“would do this.” And he sent it to the director of

stores, of all of the stores, who is this guy named Clark Stone, who people

used to call Clark Rock. And everybody feared him. And so he either called

me up or sent me a letter about it. I was like, “Wow. I guess you can sort of

make a difference.” The funny part of the thing was, of the write-up, was in

there I talk about we have a rather “elderly,” and I put in parentheses, “45 and

up,” closed parenthesis, consumer here. And, of course, they all had massive

amounts of fun with this because every executive in the company was, of

course, in that category.

01-00:37:36

Geraci: Was elderly.

01-00:37:36

Johnston: Yeah. So they picked on me a little bit for that. We did well. I think we did

well because we were a new store and newly remodeled but I became one of

13

the sales manager of the year kind of things and got to go to a big award

dinner at Trader Vic’s with the president of Macy’s. So I’m now six months

out of college and kind of liking this. I have some authority. I’m away from

the mother ship, so I have flexibility. People are listening if you think about

things a little different than they’ve been thought about before and I kind of

liked it. I think I did that for about a year, which was about the typical term or

maybe a little less than the typical term. And every department has a manager

and many of those managers were coming out of the class. Some of them were

not doing well and I could hear what they were doing or how they were doing

it. So I just observed how does fit really work. Not trying to be political but

just trying to see where some people would trip up.

Anyway, I got promoted to the next step of the training, which was now to

come back to the buying office and be an assistant buyer. Still a junior

executive. I got a decent raise, so I’m probably now making $10,000 a year

and still buying again. This is a good time.

01-00:39:22

Geraci: So you’re well dressed.

01-00:39:23

Johnston: It was a good time to have me as a friend or if you were getting married

because I could always give a pretty good gift because of my store discount.

Lots of crock pots. I went into the buying office for, believe it or not, table

linens and I had this delightful buyer. So she’s in a different zone. She’s not

crazy like a lot of the apparel people screaming thinking that you win through

intimidation. She’s, in fact, a very pleasant woman with great taste and very

calm and a perfect teacher for me to come in to the buying office because—

and the domestics group was a tight group headed by a guy named Larry

Graeber, who was a fantastic boss. He was much more of a seat of the pants

merchant but he was a very positive people person. He was tough but he

would encourage his team. So the group was really tight. It was largely all

women. In fact, most of my bosses in my career, up until Dreyer’s, were

women. But this buyer I had was great and she took me under her wing. I

learned a lot from her because she had a calm approach to this and I saw that

that actually really worked instead of the sort of—

01-00:40:46

Geraci: The sky is falling.

01-00:40:47

Johnston: Yeah, hair on fire kind of thing that goes on. And I literally mean it. When it

went on, we were all in cubicles and you heard everything. So when

somebody’s screaming at somebody you heard it all day long. So probably

like a female version of the trading desk at Lehman Brothers or something.

But it was really a good experience and it was a cool little business. What I

learned there was you first go, “I don’t know anything about table linens. I’m

14

not sure I really want to learn a lot about table linens,” but you take it as a

business.

01-00:41:27

Geraci: But that was a good time for those type of goods. Williams Sonoma is really

starting to come out at this point. Americans are—with consumable income,

their disposable income, they’re making decisions to go up.

01-00:41:43

Johnston: To upgrade. Absolutely. That was going on and Macy’s had redesigned a lot

of the store toward that. So the development of The Celler as the place for

housewares, that was going gangbuster because it’s the first time housewares

got out of Sears and became kind of cool. The same thing was going on on the

domestics floors. A lot of the designers, the fabric designers, the Marimekkos

of the world, were realizing that—and the big mills in Carolina, were realizing

that there was a lot of money in value added scrap, in a way. You could bring

a designer orientation to what had just been a fabric business. And towels. The

other thing I learned there. The towel business. This sounds so fundamental,

but it was easy—it’s Merchandising 101. The towel area had been redesigned

at Macy’s and it was the first time somebody did vertical merchandising, of

putting a towel wall all the way up. And so they stacked merchandise halfway

up and then have a Styrofoam element that would go all the way to the ceiling

where you could tuck one towel up so it looked like you had merchandise

going floor to almost ceiling. So you had these walls of color. I started to learn

all—some of those basics at merchandising. Full racks. You need to have the

full presentation. Nobody wants the last thing. You always have to neaten it

up or fill it up. How to suggestion sell? How do you accessorize? How do you

put things together so you sell three instead of one? It’s so fundamental but

that’s what I got to learn. That was my education daily. And I remember when

I got to that store, somebody—oh, back when I was a trainee, one of the

domestic buyers had me for a day and she says, “I want you to reorganize

this.” These were all a bunch of glassware and bowls and vases in this atrium

setup. I started to put it together. She walks down an hour later and she goes,

“You’ve got it.” I said, “I have what?” She goes. “I can tell. You’ve got it.”

And that didn’t help me because it was mysterious.

01-00:43:48

Geraci: I didn’t know what I had.

01-00:43:50

Johnston: I don’t know what I did. I sort of did it in a way I thought made sense. But

that was what some of the teaching was. You had it or you didn’t. And then I

had this buyer I was working with who could really nurture that and give me

more of a method toward it. So it was very cool. And you’re right. We were

selling quite a bit. The department was doing well. So I had a great year. That

was a little less than a year, as well. And then as these things go, I got

certainly a decent evaluation and I moved to my next job in the buying office,

which was to be a senior assistant buyer or associate buyer in boys clothing,

15

young men’s clothing. And then I fall in with this young MBA, a Harvard

MBA named Sam Leask, whose family had been in the department store

business for years in Santa Cruz and had some small stores. And Sam was one

of the first experiments with hiring an MBA. There were maybe three of them

there. So Sam was a merchant. Came up in through the family business but he

had a great head on this shoulder. He’s out of Harvard and he’s bringing an

analytical approach to what otherwise was still checkmarks in books kind of

stuff. Computers were nowhere. There were people doing inventory control by

checking little books. They sat on the other side of the Styrofoam wall from

you and you handed things to them. It’s amazing. But Sam very calm. He’s

going to bring an analytical approach to boys clothing. The boss, a woman

named Rose Marie, a very elegant, talented, seat-of-the pants merchant again.

So I had both situations where I had a good nurturing environment but a sort

of spiritual leader above that, if you will, in merchandising. The children’s

group was pretty tight and we were doing pretty well. And Sam was, “Okay,

it’s time for you to have some stuff of your own.” And so he really carved off

responsibility for me.” I had another funny—I won’t go through that story.

01-00:46:20

Geraci: No, go ahead. [laughter]

01-00:46:24

Johnston: No. Okay, I’ll stay where I am. Sam, and he said, “I want you to—I’m going

to give you a piece of—“we had classes of goods. He gave me outerwear. So

now it’s young men’s size eight to twenty. I was helping him buy suits. And,

frankly, we sold a lot of those suits to adults in San Francisco because a lot of

the population in the city was smaller sized and you could have a Yves Saint

Laurent suit in boys size twenty, which was about a thirty-eight men’s size for

about half the price that the same suit would be in size forty in the—

01-00:47:00

Geraci: In the men’s.

01-00:47:02

Johnston: —men’s department. So shoppers figured that stuff out. So we were doing

really well in the sort of goofy designer stuff, which sounds—but he gave me

outerwear. Outerwear at that point had been jackets. Big, big jackets. Big,

dumb jackets that I wore when I grew up in Walnut Creek. But I had been

living in Berkeley and hanging out with outdoors oriented people and my

roommate, Tony, I told you a lot about, we used to do other stuff other than

just the leather stuff. We’d do spelunking and mountain climbing and river

rafting. I forgot about all that side. I did a bunch of that. And so I got

responsibility for this and I had seen that—I always thought that one of the

best things for California was a vest. Was basically down vests, because we

all wore them when we were camping. They were quite functional and perfect

for California climate because it keeps you warm but you can stay active. But

they were all kind of walking around in Michelin tires at that time, especially

in the boys stuff. So I decided I’d work with the manufacturer and let’s

16

develop a line and make a huge marketing push against vests for boys, for

kids. It was great. And Sam gave me the whole thing. And, of course,

everything in retailing is on a drop dead timing. Depending on the department,

you have from two to four seasons per year that you’re getting ready for. It’s

always a crisis. You’re either too early or too late with everything and you got

to get your markdowns timed correctly, of course. At that time we had also

been dealing with outerwear at a time when California was in a drought. I had

a great lesson there, because we took the huge markdown on all of our

clothing one year, one season, because it hadn’t rained at all and it was so

warm and stores were filled with jackets. We took the march of death

markdowns and about a week later it’s pouring rain. It made me never want to

be a farmer.

01-00:49:15

Geraci: And you had no stock left?

01-00:49:16

Johnston: We had no stock left. We got rid of it all. But anyway, Sam gave me the

responsibility. I got to build out the down vest program and it was very

successful. We put little chevron stripes on things so it had some color with

down vests. They sold out crazy. So I got to go to the show and actually work

with the vendor, negotiate the deal, work on the pricing, work on the design. I

certainly had a coach but he was pretty hands-off. So that’s Sam. He’s a great

guy. I’m still in touch with him today. He’s now doing development work for

the San Francisco opera.

And the group was tight. I remember this because we had some funny habits

and Sam always tells this story. We’d always have lunch together. I’d always

go upstairs to the cafeteria at Macy’s on the top floor, which is now the

Cheesecake Factory. And I’d always order the chef’s plate, the diet plate,

because it was a whole plate of cold cuts and they gave you bread and you

could put potato salad on it. And everybody in the group thought this was the

funniest thing in the world, that I would order the diet plate and then pile it

with food. And so to bring that all around, at my going away party, at a nice

restaurant, they actually brought in the diet plate from—because I had that

quirky little habit.

But I started to just raise the idea of, I don’t know, maybe, “I like this but I

don’t know if I want to do this forever.” It’s analytically not very satisfying.

I’m learning and all of that but it’s still so much a seat of the pants business.

And maybe I was reflecting on if you write one report about your consumer

you stand out as being a forward thinker. I feel like I need a little more

stimulation. I wasn’t sure what that was. There were people leaving at that

point, leaving the training program because you get picked off by the vendors

on the other side. They really wanted to hire the—but I didn’t want to just go

sell. So Sam said, “Have you ever thought about business school?” And I said,

“Yeah, a little bit. I don’t know much about it.” And he goes, “I know you like

17

marketing.” I said, “Yeah, I do like marketing.” And he started to talk to me

about business school generally and what he learned at Harvard and what it

was like.

On the other side of my life, one of my Berkeley roommates, who was a year

younger than me, had himself discovered economics. I’m not sure what he

wanted to do for a living. He went off to business school at Northwestern. So I

kind of started talking on both sides of this. And Sam said, “Well,

Northwestern—The guru of marketing in the world is on the faculty at

Northwestern. His name is Phil Kotler and he’s written the book that we all

studied in Harvard on marketing.” I said, “Really?” So he got me thinking

about maybe business school. Maybe just to go have a hiatus for a couple of

years and come back to the retailing business. But he wasn’t selling me on

that. He was just interested in me personally, which was—

01-00:52:51

Geraci: He was just helping you with your options.

01-00:52:55

Johnston: Yeah, yeah. So that conversation developed further and he brought in or I

brought in some material on Northwestern and I looked in the back and

looked up a little bit about the faculty and I looked at where people were

being placed when they came out of business school and all those companies

looked kind of interesting. This whole fuzzy area called brand management.

And it sounded a little bit like what I’d been doing. Small groups of people

centered around a business, responsibility early, but it had much more

theoretical and analytical rigor around it relative to just the merchant class.

And meanwhile my buddy’s back at Northwestern and he’s loving it, even

though he’s not really going toward marketing. And I don’t really recall a

moment I said, “I’m going to go do this,” but obviously I came to that point of

view. I said, “I think I’m going to apply,” and talked it through with Sam. He

thought that was great. And I started to go to work on that, to look at business

schools. So I applied to Northwestern because of that background. I applied to

Berkeley, although I wasn’t sure I wanted to go to Berkeley because I had

gone there as an undergrad. I applied to UCLA. I wasn’t sure what I was

going to do or how I was going to pay for it because my parents were very

clear. I had done well. I was now making twelve, thirteen thousand dollars a

year. But I had some savings bonds, maybe, and that’s about it. Maybe a

couple hundred, a few hundred dollars in the bank. So it was pretty daunting

to look at but I just figured, and my buddy Chris who was at Northwestern just

said, “You get loans. You’ll figure it out.”

01-00:54:51

Geraci: Now, you were about twenty-five at this point?

01-00:54:52

Johnston: Yeah. I’m twenty-five. Yes, I’m twenty-five. Twenty-four probably when I’m

doing the application. So I went to work on it and so now in that time of

18

retailing when I’m working sixty hours a week, and that never quit—at one

point I ended up getting mononucleosis in the midst of the retailing thing and

kept coming into work and I finally had somebody physically say, “You got to

get out of this building. You can’t even walk up the stairs.” But you never

wanted to miss it because it had that kind of vibe. But now I would come

home and study for the GMATs. I was never good at tests. I had okay SATs,

enough to get into Davis, but I knew that would be the toughest part. I started

to develop who would I go to for recommendations and, of course, Sam was

one of them, who had worked with me and had an MBA. I went back to this

very important mentor I’ve left totally out of this story, I shouldn’t have, who

was the head of the UC Jazz Ensembles. I worked with him directly only for

two years but he became a lifelong kind of mentor. His name was David

Tucker and he put me into the leadership roles of the Jazz Ensemble and he

was just a great coach as far as running that organization. So he was a letter of

recommendation. One of my mom’s friends from Kansas dad it turns out was

one of the early deans of the Harvard Business School. So she had me come

out to Rossmoor and go spend an hour with him. So I put a little tie on and

went over there and talked about why I wanted to go to business school and he

wrote a letter of recommendation for me. So those were good. I had good

work credentials and I had a lot of involvement in stuff. And my GMAT

scores were okay.

So turns out my buddy Chris is on the admissions committee, because they

had students on the admissions committee, and he sees my application come

in. So he gives me the, “We got your application. It’s great. Everything looks

good, but you might want to think about taking the GMATs one more time.”

01-00:57:07

Geraci: You might want to get those scores up.

01-00:57:08

Johnston: Yeah, so I did. I went down and isolated myself, again studied, and moved

them thirty points or something. I think it was more. It was just enough or

whatever. So I got into Northwestern. I got into UCLA. I did not get into

Berkeley, which was kind of interesting, but I’ve sort of written that off as—I

always knew that at business schools they didn’t really want to have too many

people go from the undergrad program into the grad program. But on the other

hand, who knows?

01-00:57:37

Geraci: No, there’s that feeling of intellectual incest almost.

01-00:57:40

Johnston: Yeah.

01-00:57:41

Geraci: You want your students to move to different places.

19

01-00:57:43

Johnston: Yeah. And this is at a time when business schools are developing two year—

two years is the minimum work experience required. Let’s get people in there

who aren’t just—who have real work experience. So they were clearly looking

for diversity. I went down to visit UCLA. It was a good business school, had a

good program in marketing. But I went down there and it was, I don’t know,

let’s just say it was a winter month. I’m not precisely sure. And it was a

stunningly beautiful day and I’m walking around the UCLA campus and

everybody’s out on the lawn reading their books and it’s beautiful people out

on the lawn on a beautiful day and I looked at it and I said, “I can’t come

here.”

01-00:58:26

Geraci: It’s Southern California.

01-00:58:26

Johnston: I’m doing this to get myself ahead and to study and to focus. I know that when

I study I couldn’t study in my apartment. I had to go to the library. I know I

needed a cubicle. It was just my nature. I tend to be rather broadly distracted

with a lot of different things. I can’t do that. And furthermore, my buddy back

in Chicago, he said, “It’s great. It’s a great program.” And so I told my

parents. I said, “I’m going to graduate school.” As part of the application I got

enough student loans. I got it all on loans basically. I had some two percent

loans and some eight percent loans. And at that time it was $8,400 a year in

tuition, which was a lot given that I had come through Cal. But everybody

said, “Ah, you just get the loans and starting salaries coming out. You’re

coming in making $13,000 a year, you’ll come out at an average salary of

twenty-five, twenty-six thousand and so it doesn’t take too long to pay off the

loans.” And it just all kind of, “Yeah, I’m ready for this challenge.” And Sam

was ecstatic when I got into Northwestern, which is now called Kellogg. But

he was thrilled. And they threw me a big party. They gave me a little

keychain, which I still have today, that says, “California’s Best” on it, partly

because the division was Macy’s California but also because we would always

all get together and talk about how California was great. So anyway, I have

now spent three years at Macy’s. I was in three different jobs there.

01-01:00:12

Geraci: We’re at a perfect point to stop, just finishing with the Macy’s there.

01-01:00:15

Johnston: Great, okay.

[End Audio File 1]

[Begin Audio File 2]

02-00:00:00

Geraci: Gotcha, okay. This is Vic Geraci. Today’s date is Tuesday, February 15, 2011.

Seated with me is Tyler Johnston. This is interview number one, tape number

20

two. When we left off we were talking about business school. Let’s try this

again.

02-00:00:16

Johnston: Okay. So I left the Macy’s career after three years and three different—three

different positions. Packed everything in my rundown Toyota Corona,

everything I owned, and drove back to Chicago to start business school. I

think it’s probably time to put this thing out in the open, which is as I thought

about it, I’ve been motivated a lot of my life by essentially—not necessarily

an abundance of confidence, but kind of the other side of that. A wonder of

whether I could make it or not. So I think everything I’ve joined, unlike

maybe lots of captains of industry who might project that they were ready to

conquer everything, almost everything I’ve joined I’ve had many moments of,

“I’m not sure I’m going to be able to cut this.” And that was true in college

and that was true in the transfer to Berkeley. It was absolutely true at Macy’s.

And frankly, it was true all the way through my career. So that’s how I was

feeling when I was driving across the country. I’m going into an environment

where there’s now going to be a whole lot of smart people with good

experience in a high—and I was presuming a highly competitive environment,

and I hope I can cut it. That’s honestly what I felt. The fact that I had a

roommate back there that was thriving in the program helped a bit. But a fair

amount of anxiety. But that’s always been more motivating than demotivating.

It’s never gotten me to the point of not giving it a shot. It’s more probably that

I’m going to work really hard at it.

02-00:02:19

Geraci: But isn’t that a normal or a natural thing?

02-00:02:22

Johnston: I’ve met people who certainly project a different approach, who aren’t as

maybe—who certainly appear to be, “Hey, I’m going to go take that on and I

can do it. I’m positive I can do it.” And that certainly is a path to success. I

think it’s put me in a situation where I tended to work harder. It becomes self-

fulfilling in that the concern about am I going to succeed or not gets you into

an environment of saying, “I’m going to work that much harder at it.” So I

studied a lot in school. I worked hard at it. I took it pretty seriously. So I think

maybe it’s more natural but it certainly has been a thread throughout

everything I’ve taken on. There’s times it can really get in the way because

there’s times you need to walk in a room without that in your head so that you

don’t trip yourself up, in a way.

02-00:03:21

Geraci: Right.

02-00:03:22

Johnston: And I think I got pretty decent at that over time. Board presentations and

things like that, or presentations in front of 500 people. I would always project

21

that I was quite calm, even though probably prior to I was quite, quite

nervous.

So packed everything in the car, drove across, rang up my buddy. I said,

“Let’s go get a beer.” And he said, “Well, you’re in Evanston now. We have

to go to a restaurant because you have to buy three dollars worth of food in

order to have alcohol.” That was something I didn’t research at that time.

02-00:03:57

Geraci: [laughter] That can get expensive every time you want a beer.

02-00:04:03

Johnston: Yeah. Oh, god. So that’s Evanston. It’s different today, but that was Evanston

back then. Because I was from out of state, I was staying in this dorm. The

school did not have enough housing for the business school, so they had an

arrangement with a women’s—well, it wasn’t a women’s. It was called the

National College of Education, which is also in Evanston. They had a dorm

that they insisted be segregated women and men, but they only had—they had

80 percent of their student body were women, so they could never fill the

men’s side of the dorm and they’d rent out the third floor of this dorm to

business school students. I only bring that up because I’m now out on my

own. I’m away from college, I’ve lived in my own apartment for three years.

I’ve been working on my own. And now I go back into a dorm environment in

a Midwestern college, basically, with rules that we’re going to inspect the

rooms and there’s no alcohol allowed. You can’t go over to the women’s side

of the dorm and you’re kind of saying, “What?” But that created, again, a nice

little community of all of us from out of state who had the same reaction of,

“You’ve got to be kidding?” because they’ve all been off working and living.

02-00:05:19

Geraci: And especially for a business school.

02-00:05:20

Johnston: Right.

02-00:05:21

Geraci: You have to have a few years experience as part of your résumé.

02-00:05:24

Johnston: Right, right. So it was a bit of a paradox as to where we were living. But I

walked into the program for the first—this wasn’t quite the chemistry thing in

college but I was—walked in in my bellbottom Levi or jeans, some kind of

jeans, and my KNBR t-shirt and the admissions director said, “You must be

Tyler,” because I think they’d admitted maybe four people from California,

and by process of elimination we stood out. And my wife tells me the story of

still seeing me dressed that way. So I was insisting I was going to dress as a

Californian even though I was now in Evanston, the land of button down

collars and crew neck sweaters and khaki pants.

22

But I jumped into the program. It’s a two year full-time program. Because of

my undergraduate degree in business, I could pass out of a couple of classes,

of the introductory marketing classes. I didn’t elect to do that in many cases,

because I had a feeling that whatever I was about to go through was—maybe

it was good remedial and it was going to be at a much higher level. And I just

fell into it. The program was intense. Very, very stimulating and a great group

of people. Today, just to reflect on it, I do a lot of recruiting for Kellogg. I’m

on many boards back there. But quite honestly, if I was in trouble and needed

to call, I had the chance to call ten people, six or seven of them would be

classmates of mine from that experience who I’ve stayed close friends with,

and the others would be from Dreyer’s. So that would be my bail me out call

list.

02-00:07:23

Geraci: Yeah, help.

02-00:07:26

Johnston: Again, it is highly stimulating because you’re immediately in a class with

sixty people in your section and now everybody wants to do well and you see

all sorts of behavior. You see the kids who are naturally just really bright who

maybe don’t have to work that hard at it. You see the ones who want to sit in

the front row. I was probably more of a back row, back third of the

auditorium, but then once I got in the rhythm of it, I’m going to raise my hand

and start asking questions.

In passing out of the introductory class, I jumped into a second year class in

marketing, a class generally reserved for second year students. My advisor at

the time was the professor that taught this class. It was an advertising class.

He talked through my background and he let me into the class. So as a first

year student, first quarter—yeah, first quarter, maybe second quarter—I’m

taking advertising. Today he’s still a long-time friend of mine, I teach and I

lecture and give ice cream cases in his classes. But a fantastic experience

because now I was in with kind of the big kids right away and I started to see

that I had, in fact—the experience I had at Macy’s, plus my interest in the

subject matter put me in reasonably good shape to compete, in a sense of

competing on ideas.

Northwestern is built on group work, what differentiates it. The school

experience is that almost from the time you get there you’re in teams and

small groups and your grade is the group grade, regardless of the class. That

could often be an accounting class or a finance class. Certainly true in

marketing. Secondly, it was a real strong marketing department. Almost

everybody that was there was tops in their field. This is thirty years ago now.

And it was gaining the reputation of being the thought leader in the country

relative to marketing. So fantastic experience. Sort of in the crucible and

working hard with a lot of students.

23

You very quickly start to get into what do you want to do for a living? Kind of

what do you want to do coming out the other end. I wanted to go there to put

the clutch in a little bit and think about do I want to go back to the retailing

business or is there something else? What is this brand management thing?

And I started to think that’s probably where I wanted to head. At that time,

Kellogg was putting most of the market—most of the majors were in

marketing, the majority of the school. The top of the list of majors would be

marketing majors and the majority of those folks were going into brand

management. You very quickly learned that you need not only to go to

graduate school, you need to go to post-graduate school. Post-graduate school

is get a job with General Foods, Proctor & Gamble, General Mills, maybe

Frito Lay, and go to one of those kind of academy companies to learn brand

management.

But I had other interests that developed. I really liked advertising. I liked

studying it, thinking about it. I liked the creative aspect of it. I hadn’t given up

on the retailing business, but my major thrust in that first year was immerse

myself, try to visit—hit as many presentations as possible from companies,

and naturally start to build some really, really great friendships. That group

work, though, teaches you, if you didn’t know it coming in, immediately

about, again, human behavior, sociology, under pressure in a work

environment. It models what business is all about. You very quickly learn that

you don’t have to bring all the skills to the table. You learn that you want

diversity around the table of ideas. You learn that you’ve got to deliver. You

have people depending on you to get it done. And through trial and error you

have fit issues that work well and fit issues that just like, hey, I just can’t work

with that person very well, which is a fantastic repeated pattern for two years

that sets you up.

02-00:12:17

Geraci: It’s simulated real life.

02-00:12:19

Johnston: It’s simulated real life in business, and particularly in the marketing business

where you’re constantly working in teams and working through others or with

others. And I found that my retailing experience was pretty good. I could raise

my hand and speak with some authority about what I’d been doing. One of the

other professors there, who was probably the toughest professor in the school,

in marketing, taught a class in channels of distribution, which in effect was

retail environment. He and I hit it off pretty well because I came out of

retailing.

I got through the first quarter. I remember going to the O’Hare airport and

meeting up with some classmates, we’re all going home, it’s my first time

home, and thinking I got through it. My grades were okay. Certainly okay

enough. I struggled a little bit in accounting. That won’t surprise anybody.

Struggled a bit in statistics but on the other hand, the strategy classes and the

24

advertising class and those were falling into. Those seemed to be in my

wheelhouse, so to speak. But more importantly, in December I said, “I’m

going to make it through this.”

And so I came back in January that first year and really ramped up and just

had a great experience overall, leading into the summer where everybody gets

paranoid about internships even then. Today it’s worse. You have to land a

summer job. So I’m thinking I want to go into brand management, I think. I

look at this field and I say, “These are big diversified consumer products

companies.” You work in teams and the promise is that you’ll be the center of

the hub of the wheel. You’ll be the brand manager and packaging and

advertising. You’re work on all the slices of the pie. I have fun with that

today. I’m actually going to give a speech to alumni of Kellogg in a chief

marketing officers series in a few weeks and I’ve titled it, Who Told You You

were Going to be the Hub of the Wheel, because I think later you learn that

that metaphor is semi-accurate. But it looked really fun. Although the

companies, none of them were in the West Coast. Clorox was out here but the

big ones—I want to go to the big one. I want to get in post-graduate work at

one of the prime marketing houses. So once again, regardless of what

paranoia, I was going to set the goal of that’s where I wanted to go, even

though it meant I’m not coming home probably.

But in the summer, General Mills, as an example, which will hire ten Kellogg

graduates into their class at the end of two years, is going to have one

internship. So then I go, “I got to have that internship,” because if you get that

internship, and if you do well, you get a job offer right then and then you’re

set for your second year because you start from—so all of this starts to build

up. Well, the reality is I didn’t get that. I wanted to get it and I interviewed

hard for it and I did reasonably well in the interview. But no, I didn’t get that

one job.

But it turns out retailing companies were very interested in me, not

surprisingly, because now I have three years in retailing. And a grocery store

chain in Chicago named Jewel were hiring lots of MBAs, had good

connections with the university, and they had some internships. And I did get

that. So that meant I was staying in Chicago for the summer, which ended up

being a blast because to go through the winter you need to celebrate in the

summer. I realized that this is fantastic. This is just another layer of learning.

I’m going to work at a retailer in food. If I want to go into brand management,

that’s their customer. So that experience is going to be valuable. But in and of

itself it was pretty interesting.

I had a fantastic summer experience. Of course, I have just been really lucky

with some of the bosses, many of the bosses that I’ve had. So I was paired

with this guy who had gone to the night program at Northwestern. He was an

up and coming razor sharp guy in the merchandising group and he had this

project for me to work on. And the project dealt with inventory in the stores

25

and it meant I was going to be out in the stores three days a week and in the

office two days a week. So out in the stores meant I have one of my great

moments of, again, being thrown into some difficult situations because of that.

Because you came out from the corporate office and I remember walking in. I

was going to go into one of this guy’s stores. They had these sort of

lieutenants who managed groups of stores and they were all real tough

merchants in the food business. They’re constantly having vendors coming

into stores.

But I remember meeting with this guy and going out to meet him and I wore a

long sleeve shirt. Went out and had my meeting and he looks at me and he

goes, “Let me just tell you, you don’t wear long sleeve shirts when you’re out

in the stores. We all wear short sleeve shirts.” Because that was the policy in

the grocery. It’s white, short sleeved shirts. This is late seventies in the

grocery business. This guy was tough. His name is Phil Brice. Somehow in

that conversation—it started really ugly—we found a common place and I

found I could kind of tame him. He ended up being a real good pal. I liked

those guys, those sort of salty, tough guys who maybe have seen a hundred of

you come along and you try to figure out how to work with them.

So I had those experiences out in the stores. It got me all around Chicago,

which was cool, because I had to go to stores everywhere in the tough—

02-00:18:42

Geraci: So you learned the city?

02-00:18:44

Johnston: Tough parts of the south side and some of the north side. I could see the

segmentation that was going on. I could see the differences in the business.

But mainly I’d come back and have my mentor guy working with me. And

this all would lead up to a presentation to the senior management. And, of

course, they’re looking for people to come into their training program, so

you’re going to meetings, you’re meeting the executives and you do have a

meeting with the president of the company. So I had a meeting with the then

president of Jewel. I remember getting ready for that. I guess somewhere

along the line I learned how to ask decent questions. I had a lunch meeting

with him and I asked him what the difference was between a great manager

and a great leader. I guess I just hit a zone of a subject matter that he had been

thinking a lot about. He pulled out a book that he had been reading on the

subject. He said, “That’s a fantastic question,” and he went in to a twenty

minute answer. And then I came back down to cubicle and then the next day

that books shows up signed by the president of the company with, “I just

really enjoyed the conversation,” blah, blah, blah. The secretary of the

department goes, “Boy, it’s not every day people get books from the president

around here.” So it was a fantastic experience and the guy I’m working with,

Greg Josefowicz later in life becomes the head of Jewel. So the joke at

Dreyer’s for many years was that I was connected with one grocer, who

26

happened to be a key customer, and there happens to be an interesting story

about what happened in Chicago where I called on that relationship. But I was

very fortunate. Greg went on. He was an extremely bright guy. But I was a

kid—

02-00:20:43

Geraci: Do you remember what the book was?

02-00:20:44

Johnston: —working with him. No. It wasn’t one of the standard leadership books. It

wasn’t like a Bennis or one of those. I don’t remember the title of it now.

Actually, I should have it somewhere.

So a good summer experience and at the end of that summer Jewel gave me a

job offer, and a very good one. So I ended up kind of walking back into the

second year of business school with an offer, which was a very calming thing.

I wasn’t sure I was going to take it because I wasn’t sure that was the program

that I wanted to go through. But what it did is it said, “You ought to interview

also maybe back in the retailing business and not just reject it out of hand

based on your prior experience.”

So the second year is almost all about you get to take a lot of classes in your

major, but you’re also heavily involved in recruiting. And I interviewed

broadly in brand management, which was still my major orientation, with

General Mills as my top three [places] where I wanted to go. They were

diversified as a company. They were informal. I remember that. Proctor &

Gamble was still very formal. General Mills, you called everybody by their

first name and you took your coats off in the meetings. Those cues said it’s a

more informal environment, even though it’s still a big formal company. I

interviewed in retailing. Short circuited. I got involved in a bunch of stuff, too,

at school, case competitions, and worked on a case project, a case competition

for General Motors in marketing. We got to meet all the chairmen of General

Motors and go up to the executive dining room in Detroit, pitch our

advertising ideas. So a lot of fun and very stimulating. I ended up with offers

in retailing from Jewel, from Target stores up in Minneapolis, from Levi

Strauss back out here in San Francisco and then in brand management quite a

few: Frito Lay, McNeil Consumer Products, which is the Tylenol part of

Johnson & Johnson. I had a fantastic recruiting experience with them in that

the vice president or chairman of McNeil at that time, named Ralph Larsen,

just liked me. When I told him I wasn’t going to join them, flew out

personally to take Melanie and I out to dinner at the top of the Hancock

Building in Chicago to try to change my mind. Ralph Larsen went on to be the

CEO of Johnson & Johnson. And he was a really quality guy. So fun contacts

along the way. There’s a couple others in there I’m forgetting, but I had an

offer from General Mills.

27

An important part of the story. I met my wife, Melanie, I met her at the end of

my first year of business school. She was in the graduate program of

journalism at Northwestern. So we started to date at the end of the summer,

middle of summer, and then throughout my second year. So then my

recruiting view suddenly needed to change from one career to two and that

was a real hot topic at that time, of dual careers and how does one manage—

02-00:24:48

Geraci: How do you manage those?

02-00:24:49

Johnston: Yeah. There were people at companies that we knew that were living in

different cities, because that was kind of popular at the time to try to solve it

that way. There were many couples being formed in business school who

suddenly had that in the mix, and I did, as well. She is just starting a career,

getting into the copy-writing—wanting to get into the copy-writing side of

advertising and Chicago is a beautiful place for that. And I’m sort of saying,

“General Mills is my top opportunity and it’s really where I want to go,” in

Minneapolis.

So I had several offers. I had six or seven offers, which is obviously a

fantastic place to be, and to be able to evaluate all of that. And what became

most difficult was the dual career. What do I do? So I did interview in

Chicago, not only with Jewel but I also interviewed in advertising and I had

an offer from Needham, Harper & Steers in advertising, which went on to be

today DDB Needham and Omnicom is now the company. But I did it initially

because I did like advertising. I wasn’t sure that’s where I wanted to go. I

wanted a bigger part of the pie. I wanted to be the hub of the big wheel, not

just a slice of the pie. But I also thought I needed a Chicago option. As we got

into the decisionmaking, and I remember at General Mills I got that offer and

I was just elated, but it became much more difficult to weigh that and to think

about going to Minneapolis because the advertising business there was way

underdeveloped and it wasn’t going to be a place Melanie was necessarily

happy about going.

So put that all into the mix and go through it. I made a decision and the

decision was to stay in Chicago and go to advertising. I made that decision

and immediately obviously had all of the buyer’s remorse on that, which

Melanie, of course, was with me all the steps of the way on that decision.

While she was momentarily happy about that, she could see the

disappointment. I remember General Mills just being somewhat shocked

because I for so long cultivated them.

02-00:27:26

Geraci: This had been your goal for so long.

28

02-00:27:29

Johnston: Yeah, yeah. So the only time in my career that ever happened but it did

happen and Melanie basically, within a matter of a couple of weeks, said,

“You’re miserable with this thing,” and she offered to call the guy at General

Mills who was one of the division managers who is the key recruiting guy and

say I was miserable with this decision and if he changed his mind would that

still be there? And they said, “Yes.” Interestingly, the agency, Needham, that I

had chosen to join, who was shocked when I said yes, was a General Mills

agency. So that got a little interesting. But I called them back up and I said I

changed my mind. The reality is they were disappointed. They sort of shared

that they were surprised that I made the call initially and they were very

gracious about it, partially because they had to be because I was now going to

go become a client of theirs in Minneapolis. So it was tough, for all of the

planning and all of the thinking about it. Obviously things come into the mix

that are very different and change the priorities.

So we rewired it and I said yes to General Mills. It all happened probably

within two or three weeks but it was certainly frowned upon, obviously, by

the recruiting office. Nobody wants to be—

02-00:29:12

Geraci: Make up your mind what you want to do.

02-00:29:15

Johnston: Yeah, yeah. It’s not cool and it’s happened. I’ve been on the other side of that

in my career where people have done that. It’s certainly not very pleasant. So

we go off. Going to go to General Mills. We go off. I get out of school in

June. I’m now broke, again, with debt. We are now planning to get married in

September and I started in Minneapolis in August with General Mills. So kind

of the same pattern of coming out of school. A little bit of a summer break,

long enough to move to Minneapolis. Melanie comes up and she gets started

interviewing in advertising, which we think might be okay. And she starts to

interview at one of the major agencies in Minneapolis. She gets to the point of

having an offer, they really want her, and again, she’s at the start of her career

and has done some work in Chicago but is now transferred up to Minneapolis.

I’m in heaven because it’s the place I want to be. And that agency finds out

that I’m at General Mills and they are a General Mills agency and they rescind

the offer because they don’t want to have a situation with the client over here

and the spouse, even though she would be in the creative department writing

it.

02-00:30:50

Geraci: It’s a conflict of interest within—

02-00:30:52

Johnston: Or they used that as a—so what happened is General Mills was the big fish in

town and there were very few agencies and most of them had big General

Mills relationships. So it put her into a situation of having to find more niche

29

secondary opportunities. So we started, in this sense, a groundwork for what

was that time like.

So I start at General Mills. I’m in heaven. Frankly, it’s the same pattern again.

Twenty-six of us all come in together. Now we’re not only all MBAs, we’re

all MBAs who majored in marketing who want to be at the academy

companies. The competition’s about to begin. Who’s going to be promoted in

a year? Who should you work for and what are the good brands? All that stuff.

But I’m loving it. And I fall in with a first boss. I start as a brand assistant and

my assistant brand manager had responsibility for me. Once again, a really

good guy. A woman brand manager but my direct report. It’s almost parallel

to the Macy’s experience. It is parallel. And Ken was a great boss and he

taught me very quickly. He was not afraid to give feedback and he taught me

very quickly. I remember thinking I was a pretty good writer of memos and

that sort of thing. I did some things and instead of coming in and saying,

“Your writing sucks,” or something, he came back in and he gave me ten

different memos that he had written but they were all for different purposes

and how to structure them. So I almost had this template in front of me.

02-00:32:44

Geraci: You had templates in front of you.

02-00:32:44

Johnston: Yeah. Follow this. And immediately I went from here to there as far as an

ability to write. So, again, very fortunate to have somebody take that interest

in me and develop me. Really good guy. He went on to a great career at

McKinsey and he’s still a good friend today.

So I’m moving along in brand assignments. I started working in new products,

which is very unusual. Part of the reason I got the new product job was

whatever they had me geared for was a bigger brand but when I said no all of

that shuffled and so I think they shuffled some things again when I was now

back in the pool. But it ended up being fantastic to start a new—

02-00:33:34

Geraci: General Mills is very diversified as far as the products?

02-00:33:36

Johnston: Right. It’s the same thing. You got to be in one division versus the other. You

don’t want to be in Betty Crocker or you want to be in big G and work on a

big cereal brand. Well, I was in big G but I was working on new products kind

of over here. Very rare to start in new products. And it’s a little weird because

you’re immediately working on a different skill set and you don’t have kind of

the everyday transactions of a big brand to sort of be part of your learning. But

I liked it because I thought maybe I might be good in new products because I

kind of liked the spontaneity of it in a way and the creativity of it and I had a

really good boss. So I was happy. I was in that assignment, I have to think

about this, well, I guess a little less than a year and then I was moved to a

30

cereal brand. Two cereal brands. And then I was moved in less than a year to a

big old brand, Gold Medal Flour, the original brand of General Mills, which

was a tough business. Very commodity oriented. Very thin margins. Hard to

have a marketing budget, but one of the most important marks of the

company.

I have to think about this. Within two years I was on my third assignment. So

I was moving quickly and I was getting good feedback but Melanie was not

very happy having to work at smaller agencies in order to get a career going.

So the disparity was pretty significant. One theme that carries through how

I’ve thought about where I can go, even though it’s analytically incorrect, was

I always felt I could stay some—I went to companies where I thought I could

stay twenty-five years, even though the reality was you wouldn’t. And that

was true with Macy’s and that was certainly true with General Mills. You

could see brand managers who have gone on to be chairman and you could

see staying there a long time. So I had a good overall fit with the feel of the

company, even though the statistics would say that everybody goes to these

academy companies and then goes off because other people pick them off.

And that started to happen.

02-00:36:15

Geraci: And that’s part of the purpose of the academy companies to begin with.

02-00:36:17

Johnston: Right, right. And so some of those phone calls were starting to come my way,

even at two years because the recruiters would start to wander the halls,

metaphorically, and try to find talent. And so the disparity got pretty big

between how happy I was. And, of course, again, it’s an environment of sixty

hours a week in a pretty cold climate. We’re newly married and I’m fully

loving it. I’m loving my career on a ninety-five on a one hundred scale and

she’s feeling thirty-five on a one hundred scale. So that needed to change. It

wasn’t critical, has to change today, but I said I would think about, I’d

entertain looking. However, again, the peer coaching going in is you never

leave General Mills before you become brand manager, because if you leave

one of those academy companies before getting that stripe, as it was called,

people would think you weren’t going to make it. So I’m now at two years.

I’ve been promoted once. To make it to brand manager, you need—it’s not

going to happen before three years.

02-00:37:41

Geraci: Now, you're not even thirty years old yet.

02-00:37:43

Johnston: No, I’m twenty-seven when I got married. So no, I’m twenty-seven, twenty-

eight years old. I did say, though, to Mel, I said, “I’ll listen, see what’s out

there. I’m not sure I want to do it but I can see that this is—“ But inside I’m

going, “Man, if I leave before this, I’m not going to get that stripe. And if I

31

don’t get that stripe— ” whatever peer chatter is on these things, regardless of

how you might buffer it, you always hear it. It’s always a voice in the back.

So a recruiter called and said, “We have this opportunity for a brand manager

position at Kraft in Chicago.” I made it clear to a couple of recruiters that I’d

listen to Chicago opportunities. Kraft at that time, if I was at Northwestern, no

one thought of going to Kraft even though it was in Chicago. When you’re at

General Mills and the stories of get your stripe—the hero stripe was get your

stripe and then go to Frito Lay. They paid big for General Mills brand

managers. In fact, there was a Fortune 500 cover article all about brand

management at the time and my boss was in that photo. And it said, “The

General Mills brand of manager.” And it was cranking out damn good brand

managers. But don’t leave before you get the stripe.

So a phone call came in for Kraft and it was a brand manager job in Chicago

and I listened. It was to run the Kraft mayonnaise business. So once again I

kind of go back to the table linen story. You get to a point of arms length on

these things and go, “Doesn’t sound like I’ll real popular at cocktail parties,”

but it was a big business. But I knew nothing about Kraft. But then somebody

said, the recruiter said, “There’s something new going on at Kraft. It’s filled

with thirty year veterans who have all come up through the sales ranks. That’s

who runs the marketing department, except for there’s three MBAs that have

been hired from the outside who are starting to make a difference. And there’s

a new guy that’s come in to run grocery products who’s a real fireball out of

Proctor & Gamble and he’s starting to basically put Kraft, start some

renaissance kind of thought.” So it was a palace of huge brands that had

been—that are well respected and revered, that were somewhat stale, where

no real brand management marketing push has been brought to it. But it was

totally off the screen. No one knew about it. And so it wasn’t going to have

any hallway cache. In fact, it would have a lot of suspicion. So on that basis I

took the interview and did whatever. I flew down, nervous, flying out of

Minneapolis feeling like the only people on the plane getting on in

Minneapolis were Honeywell executives and General Mills executives.

“Where you going today?” What if they find—

02-00:41:16

Geraci: A target.

02-00:41:17

Johnston: They are a target at that time. So I flew down to Kraft and I went through this

day and I met this guy, Joe Durrett, who’s the change agent who’s come in. I

met the guy who’s hiring and he’s a Harvard MBA, real introverted,

workaholic, but seemed like he really was—he cared for people a bit. And I

heard the stories of what was going on down there and I interviewed with lots

of people and I met these guys who are the next rung up. So Joe Durrett was

just a vice president of one part of grocery products. His boss is a thirty year

sales veteran. The guy running retail products, a thirty-five year sales veteran.

32

I met all those guys. But I loved it because in a way it was like these are like

my suit salesmen. But they’re thinking about this experiment, about what if

we bring in these new MBAs. Get on the plane, come home and go, “This

might be kind of interesting.” The business is sizable. You don’t have a lot of

people reporting to you but a whole lot of things had never been done here

that at General Mills you’re doing—

02-00:42:38

Geraci: There’s opportunity.

02-00:42:39

Johnston: —the version of—you’re doing the tenth version of the packaging change on

Wheaties or twentieth. Great learning. But I kind of came back with a fuzzy fit

feeling. And more importantly, it fit the big puzzle. The big puzzle, of course,

being Melanie’s career, my career, Chicago. We loved it, we had friends

there. It had certain pull. So I won’t say that was the only thing. I did go on

another interview at the time, which was back in San Francisco, for this little

tiny company that was headquartered near the San Francisco airport in a little

crappy office where they are looking for marketing thought because they were

a freight distributor called DHL. Believe it or not, that’s how young that was.

But that looked like too much.

02-00:43:38

Geraci: But that was a bunch of rugby players.

02-00:43:41

Johnston: Yeah, it was. I don’t know. I wasn’t convinced they really—you like to go to a

place where they at least know what marketing might be. And that was really

early in DHL’s history. But, of course, who knows what would have happened

there. I didn’t have a second round of interview there. I didn’t follow-up on it.

But Kraft I did. I made the decision and I talked to my boss at the time. On my

third assignment, I was now on my third set of pairs of bosses. I had a great

one my first one at General Mills. The second one I had—I ran into my direct

boss. It was a woman who I absolutely could not work with. I tolerated it. And

she didn’t like me and she knew I didn’t really respect her. She was not very

sharp and so that experience was rough. I came home miserable. But luckily it

only lasted about seven months and then I moved to a third experience and I

had a really good boss. I went in and told him. And he’s like, “Kraft? What

goes on at Kraft?” So it was like nobody knew about it. And so my peers

come up and go, “What are you doing? You’re going to leave? You didn’t get

your stripe. Yeah, you’re going to be a brand manager but is it really a brand

manager job?” I said, “Yeah, I think it really is a brand manager job. It’s a big

brand and there’s a lot of—it seems like the start of something there.” I didn’t

think about it too long, as I recall. It looked like it would be some risk but I’d

give it a shot. So I resigned from General Mills and kind of surprised them.

But there are twenty-six of us. I was doing fine and they liked me but—

33

02-00:45:40

Geraci: I guess the age old question is it better to be the big fish in the small pond or

the small fish in the big pond?

02-00:45:48

Johnston: Yeah, yeah. And so we pack everything up and rent a place back in Evanston

and go back to Chicago. And I start at Kraft. So that is now—just on the year.

So I got out of business school in 1980. General Mills was ’80 through ‘82ish.

Two and a quarter years, two and a half years. And I start my career at Kraft. I

ended up being at Kraft for six years. As I reflect on it, it was fantastic. It’s

everything that I guess I figured it might be. It was a big palette. There was a

lot of opportunity. It was fantastic navigating of big company established

executives but an experiment going on down here. And I was in the division

that was making the big change. The grocery products division had this

manager. The rest of the company didn’t have it. The cheese division was still

kind of the cheese division. And we started to rock and roll a bit. Joe, who’s

the head of it, he was a change agent. He had run Ivory soap and he was the

youngest brand manager in Proctor to run Ivory soap. I just sent him a

LinkedIn note. I said, “Are you still drinking Coke at 7:00 in the morning?”

He drank Coca-Cola, get fired up.

02-00:47:22

Geraci: Get that caffeine.

02-00:47:26

Johnston: He knew he was pushing and breaking some whatever. Breaking the china in

the china shop. But he had three other MBAs that had come in out of school

and I got to work for all of them basically. What also started was recruiting

and adding to the team. So I liked my job running the business, running the

mayonnaise business. I had a fair amount of autonomy and authority. It was a

trouble business, again, thin on the margin. All the money was made on

Miracle Whip and mayonnaise was used to keep everybody at bay while

Miracle Whip sat over here and made—just printed money. One of the most

profitable brands in the company. But that was fine. This group, there were

probably fifteen of us in marketing within grocery products at Kraft. And total

marketing was probably twenty-five. When I left Kraft, it was 140 people in

brand management.

02-00:48:40

Geraci: My goodness.

02-00:48:41

Johnston: So I liked it and Melanie loved it. We were back in Chicago. She got great

traction at Leo Burnett in advertising, an academy company, and then went on

to a very successful copy-writing career. Not only at Leo Burnett but also at

Hal Riney when they opened a Chicago office. That’ll come back into play

when we get to Dreyer’s.

34

02-00:49:06

Geraci: I was going to say Dreyer’s used—

02-00:49:08

Johnston: Yes. Believe it or not, that old story will repeat itself. So I don’t precisely

remember. I was on the mayonnaise business for maybe a year. My boss was

everything I thought he was going to be. He was very introverted. He was a

total workaholic. His whole life was working. But he didn’t press that on the

people that worked for him. He wasn’t the kind of guy—this was before

voicemail. So he wouldn’t be at home at 3:00 in the morning leaving you a

voicemail. And a very kind guy. The other MBAs were right next—they were

all group brand managers.

So I worked on the mayonnaise business for a year. I started to get to hire

people. I get to recruit. I started to get involved in recruiting and I wanted to

recruit at Kellogg. There were four MBAs in total. Two of the others, who are

also doing really well, were both Kellogg grads. So I got in with them, starting

to recruit, and we said, “Let’s put Kellogg—let’s put Kraft on the map over at

Kellogg.” Great school, great brand management. We want to hire, we want to

grow. And I got involved in that, which was very cool. It’s an area where you

can make a big difference in addition to running the business and get involved

in the organization. So the mayonnaise job for a year and then they tap me on

the shoulder. Yeah, I got good feedback. And Joe, the Coke-drinking change

agent, always, always—he was a brilliant drive by manager and he was very

savvy. And he’d always remember a few facts about you. Over time he got to

know a lot about you but he’d always sit down in your cubicle or come in

about five o’clock, six o’clock and sit down. “How’s Melanie?” And I’m like,

“Wow, this guy knows my wife’s name.” Just little things like that. Joe is a

master at that. And he’s also a master of dropping in right at the end of the

day.

02-00:51:26

Geraci: [laughter] As you’re trying to—

02-00:51:27

Johnston: [laughter] Yeah. But a good coach. God, he put me in charge. Oh, I know.

There’s this fun story there. The mayonnaise business had had an advertising

campaign that was comparative with Hellmann’s mayonnaise and it had

gotten in trouble with the regulators because they had challenged the

advertising claim. And it had gotten really heated and the advertising

regulatory body was a self-regulating body called the National Advertising

Division of the Better Business Bureau. Kraft had kind of played it like, “Oh,

heck with you guys.” But they were about to pull the rug out from under our

advertising campaign, which had really made a difference in the brand.

So Joe said, “We failed at this. I want you to go do this. Negotiate this.” I’m

still relatively young. I’m meeting with the general counsel of Kraft trying to

formulate our case and I’m going to Washington to meet with this salty old

35

guy and his staff who run the National Advertising Division. Joe was a great

delegator. Now, he’d give you a big challenge. He basically said, “We’ve

pissed them off. Bring home the bacon. Bring home the bacon.” I’m like,

“Okay.” First time ever doing anything like this. But I thought, “Well, okay,”

jumped in and we made the case and I went to Washington and we had the

meetings and I went through the defense of what we had done and what our

substantiation was and worked this guy and we got to a favorable resolution

where they allowed us to keep the campaign. So we won basically on the case

that was presented. I was pretty much the point guy on it, because it’s not a

legal—it’s a regulatory body and you get legal advice but it’s not a lawsuit.

So a businessperson has to make the case. And I come home from that and I

go to the store that morning and I buy a big wad of bacon, a package of bacon.

Joe’s up in the executive wing. He’s a rising star. I walked over to his office

and I just threw the bacon down. [laughter] He still tells that story.

02-00:53:58

Geraci: Well, he told you to bring home the bacon and you took it literal.

02-00:53:59

Johnston: Yes. I brought it home. So good experience in that first year. Then I was

moved to new products. Again, I’ve always sort of expressed an interest in it.

Loved new products. The new product division was floundering. They wanted

to kind of put some people in. I worked on this project that was already there

called cheese twists, which were little bite size pieces of cheese made on what

used to be the caramel, Kraft caramel machine, to be a snackable cheese. And

you think about it today, how much snackable cheese is out there. But we

were the first attempt at it. It failed but it was a fun test market. Really fun test

market.

And that was my first experience with running a new business team where,

again, yeah, you’re the hub of the wheel but you got people of very different

skill set. We had a woman who was our regulatory advisor who basically said

no to everything. All these different personalities. And the engineering guys

who had, again, seen a hundred of you before but we’re busting them to go

out. I started this. Somehow I can’t remember the theme. But it basically was

we had a very short period of time to make this work. I think I just said,

“Hours count,” because we had to get this marketed in an extremely short

period of time and bring up this Rube Goldberg production system to make

this cheese snack to put it into two test markets. And I decided I’m going to

run this team much more as a cheerleader and get everybody onboard with the

challenge here and the mission and so have some fun with it and set goals and

push people into meeting but try to be friendly with it but at the same time use

humor quite a bit. So that’s going on in my second year at Kraft.

My recruiting is building up. They throw me the opportunity to go to Kellogg

and speak at brand management night. I make this speech about what is brand

36

management and I challenge this hub of the wheel thing in a funny sort of

way. One of the other MBA group managers, he’s now the CEO of Mattel by

the way, he says, “Tyler, you do it. You do the panel.” And he comes up to me

afterwards and he goes, “You got this. This is your thing.” And they put me in

charge as key school rep of Northwestern Business School for all the

recruiting of Kraft, but particularly the marketing recruiting. So I’m there a

year and I have now that position basically, informally, which comes into play

because for that window of time I recruited—I met every marketing graduate

at Northwestern and I recruited every marketer into our division and many

that came into the other divisions. So I got to know the broad marketing team

very well.

And thirdly, I also started to just kind of have moments of fun, because we

were kind of the kids at the controls, including these group brand managers.

So I started to note, I don’t know, just see. And I felt some security. I was

kind of in Joe’s group and we were able to push. So I had fun with stuff.

There was just goofy things that would go on. I developed this fake office. It

was “the office of administrative services” that would from time to time put

out these memos that were total BS, making some observation about what had

been going on. And I have those memos still today. One of them I recall dealt

with—as the company grew, it was always open office concept and everybody

had these massive cubicles. Well, a year into being there, these cubicles are

getting smaller and smaller. They’re being subdivided because the floor was

only so big. So I put out this memo about the anticipated continued

subdivision of what was going on and new cubicles that were going to be

introduced. It was all very sort of seriously sarcastically kind of like The

Onion, written that we were going to go into massive—we were going to have

timeshares and then I think one, we were going to have double-deckers, I

called them, where one would actually have a bunk cubicle, but only if you

read all the way into the memo would you get to this. And then Kraft had

these automated mail carts, this was the big innovation in this building, that

would literally follow a track in the carpet and go around, these robots, all day

long, and deliver the mail and stop at every secretary’s station and beep. And

then you’d go up and get your mail. If you weren’t there when the mail cart

came—tough luck. It was automated, and if you didn’t get out of the way—

well, as the building got subdivided, these tracks got tougher for the mail. So I

also put in a memo that we were actually going to develop a cubicle style

called fast trackers, which was a cubicle built on the mailbox so you could

literally be mobile and move. But again, it’s all BS, of course. And I had a few

others like that, that were built—acronyms would start and new departments

were being created with all these funny acronyms. Now, I didn’t distribute

these beyond maybe sixty people. Sort of realized there was a home for

having fun.

02-00:59:37

Geraci: Seems that the key word here is have fun with work.

37

02-00:59:39

Johnston: Yeah. Yeah. So I was involved in it. I kind of became the outlier. If we were

going to do something goofy, we would do that. One of those experiences

completely backfired in one way. I don’t know if you want to go through that.

It was very fun.

02-01:00:05

Geraci: We’re at a point where we should stop.

02-01:00:08

Johnston: Okay.

[End Audio File 2]

38

Interview #2 February 25, 2011

[Begin Audio File 3]

03-00:00:08

Geraci: I am Vic Geraci, food and wine historian from the University of California

Berkeley’s Regional Oral History Office. Today’s date is Friday, February 25,

2011 and seated with me is Tyler Johnston. Mr. Johnston served as the

executive vice president of marketing for Dreyer’s Grand Ice Cream. This is

interview number two, DVR tape number three. To start off, I’ll give you a

quick recap interview one and then we’ll just dive in.

In interview one, we covered your family, growing up, your education at UC

Berkeley and the Kellogg School, and then from there we discussed your first

career jobs at Macy’s, General Mills and Kraft. So let’s start from the

beginning of your career at Dreyer’s, from getting hired and going all the way

through. And we need to introduce someone here.

03-00:02:35

Johnston: This is Floydee. Floydee, can you say hi to the camera? Say hi to the camera.

This is Floydee. Floydee is a girl but she’s named for my wife’s father.

Floydee the power pug.

03-00:02:48

Geraci: The power pug.

03-00:02:49

Johnston: The jazz dog. Right? Yes. So she’s here to keep things factual. If at any time I

exaggerate my role in the company, she will growl. Sort of like a purr, growl.

03-00:03:04

Geraci: It’s great to have a truth meter available.

03-00:03:06

Johnston: Truth meter.

03-00:03:09

Geraci: Right.

03-00:03:12

Johnston: So I’ll just slightly step back. I’m at Kraft and a phone call comes in from a

friend who had a recruiter call him about a job in California at this Dreyer’s

Grand Ice Cream company. And he sent the recruiter to me because he knew I

grew up in California. I was very happy at Kraft but I knew Dreyer’s because

I grew up in the Bay Area. I had lived right up the street from Dreyer’s, which

I thought—I didn’t really know that’s where the headquarters were, this brick

building, but it had an ice cream parlor. Between getting home on BART and

walking home, I would occasionally grab an ice cream cone. So I certainly

knew the brand well from being in Northern California.

39

I was coming out for a meeting with Kraft and I said, “Well, what the heck?

I’ll go meet these folks.” The recruiter kind of described, “Hey, here’s this

company. It’s small but they’re growing. Two guys from Berkeley bought this

company. It’s got kind of an interesting, fun environment and they’re really

looking to build out brand management.” That’s about what I knew coming

into it. I was running a pretty sizable business at Kraft, so this was going to be

going from a big brand to a small company. A company that was much

smaller than the brand I was running at that time at Kraft. So I went to this

meeting, came over, scheduled a half day of interviews and went through the

day.

But one of my first interviews was with Rick Cronk. I think I did not meet

Gary on that first round of interviews but I met most of the executive

committee at that time. But Rick’s interview in particular, there were two

things about it. I’ve got this thing around here somewhere but I don’t know

where I’ve put it. One thing was he had a mug on his desk that it turns out was

from the Boy Scouts but it has this fabulous quote about—the net of it is it

really doesn’t matter what you do in your life. What matters is if you make the

difference in the life of a boy. That’s basically the sentiment in the quote. And

the Boy Scouts had given it to him. And, of course, at the time we were

pregnant with our first child and it was going to be a he. I didn’t know that.

But he hadn’t been born yet so I was kind of a little more oriented toward that.

I thought, “Well, that’s pretty interesting.” That’s not your power mug to have

on a desk. And then his first, really his first question—he’s a very nice guy,

and personable and came in, sat down and he just sat back and he just said,

“So why should I give you the keys to the brand?” And I’m pretty sure I made

a glib response, something to the effect of, “I’ll be sure to bring it back with a

full tank of gas,” or something like that. [laughter] But it always stayed with

me because it, in essence, crystallized what I then learned was the culture of

the company and the upside down organization. I’m in a big brand

management company with a lot of hierarchy and what you’re always

wondering is do I have the right to make this decision? Am I going to be

overruled? Do I have to check it with five people? And so here I get to this

company where these two guys have bought this thing. It’s much smaller, so

typically you would think the president of the company is going to be very

involved. And his first question is, “Why should I give you the keys to the

brand?” When I retired, Rick replayed that story because he remembered it, as

well, and gave me a set of wooden antique keys that are hanging outside in my

living room as the keys to the next phase of my career. But that kind of set the

stage.

And then I met many of the executive committee. Paul Woodland, who was

CFO at the time. And from that interview, what I remember was he kept

referring to his counterparts in the company as his partners. So he’d say, “My

sales partner, Norm,” who’s running sales at that time. And I thought, “Well,

that’s kind of interesting. That’s very non-corporate.” They used the word

partner a lot. So that was pretty cool. And I had just a half day of interviews. I

40

met the majority of them. Bill Oldenburg, who was running manufacturing at

the time, just had this incredible energy about him. And he was a non-

manufacturing guy running manufacturing. He had been a division manager at

Levi Strauss. Well, I’d been in the retailing business. So once again I’d see

this guy and I’d meet him. I’d been working with all these Kraft

manufacturing guys who have been doing the same thing for thirty-five years

and here’s Bill who they put in to run manufacturing who had no

manufacturing experience. He had been a great general manager. So I thought

that was kind of interesting.

And through the course of it, I just relaxed and felt like I could be myself. And

they asked me a lot of questions that were smart, tough questions about brands

and what do I do and what do I think about them. My sense was the day went

pretty well. So I got on a plane, having never thought about, “Oh, I’m going to

move.” I wasn’t looking for a job. And I got home and my wife asked me how

it went. I said, “You know, I think it went pretty well and I think I really like

these folks.” So that started the process. And it did. The next step was a

callback to come back again and meet Gary and spend a lot of time with Gary.

Gary was, as he always was, warm, personable and tough-minded in his

approach in the interview. And clearly he’s a guy who is very interested in

marketing and brands and wanted to really bring that to the forefront of the

company.

03-00:09:35

Geraci: Well, that was part of his training.

03-00:09:36

Johnston: That was part of his training but he was going to—you could get the sense he

was going to drive. I want the marketing discipline in this company to be as

strong as the rest of the company. You clearly get the sense that this is a

company based on some culture that’s kind of interesting. It wasn’t written

down at the time. I don’t think the term grooves were used but there was a lot

about proven practices and things like that. There certainly was a lot about

“hire smart people and get out of their way.” So the essence of an upside

down organization. But what Gary was articulating, and what appealed to me,

was maybe similar to what I had felt at Kraft when I went there, which is

there’s a whole lot of marketing and branding stuff that needs to be done here

that hasn’t yet been done, although there’s been some really good things

started. And he wanted to elevate that in a skill sense. I wasn’t saying with my

hire per se but with building a group in a discipline that could equal the

manufacturing and sales and distribution strength. So I also got the view, quite

quickly, that this is not walk in and everybody bows down to the marketing

person. You’ve got to earn your stripes, so to speak. You’ve got to make the

case as to why marketing matters, because the company’s doing very well and

it was growing and direct store delivery and route salesmen, et cetera, were

critically important. In fact, Rick’s stump speech at that time would be, “The

people that matter in this company—we don’t matter, the management doesn’t

41

matter. We support the front line— the front line in this company is the person

that’s making ice cream, the ice cream maker and the route salesperson.”

So I’m coming in saying, “What are we talk—“

03-00:11:32

Geraci: “Yeah, where’s my job?”

03-00:11:33

Johnston: “Hello? What about marketing?” So I knew that going in, that it was different.

Some pioneering was going to be on even inside a company that in and of

itself was pioneering and growing.

So to fast forward. The interview process went pretty quickly and I got an

inclination that they wanted to hire me. I had a few things to work out in the

offer and I let them know that. And I’m in Chicago and all of a sudden I get a

call from the recruiter and he says, “Gary Rogers would like to—he and Steve

Schickler—“ who was the guy who was hiring me. Steve was the VP of

marketing at the time—“are nearby and they want to fly into Chicago and take

you to dinner.” And they did that and, of course, it was like literally going to

be that night or the next night. Turns out they had been in Fort Wayne at the

manufacturing plant. The reason this is important is because the other insight I

saw there.

So we got to dinner and Gary starts to talk about the Fort Wayne plant, which

at that time was almost revolutionary in that it had been converted and being

run on a team based system. Maybe more akin to a Japanese model.

03-00:12:57

Geraci: I was going to say this was the Japanese model that was coming out at that

time.

03-00:12:59

Johnston: Yeah, yeah. And, so again, I’m in the food manufacturing business. I’m

working for Kraft. I see these big plants and here’s Gary enamored with this

experiment at his biggest plant for what is going to be the expansion frontier,

the East, and he’s kind of just openly saying, “It’s just fascinating to see. We

have a system where it’s a team based management. It’s not a hierarchy and

there is no the manager makes all the calls.” He was excited about it.

Genuinely excited about it. And I think analytically concerned about it at the

same time. But I’m sitting there saying, “Here’s the CEO of the company

who’s just been at his own manufacturing plant and he’s openly wondering

about this experiment,” but I’m thinking, “You allowed that experiment?

That’s pretty amazing.” So it was a very cool dinner and—

03-00:13:59

Geraci: That’s a true insight into his leadership style.

42

03-00:14:05

Johnston: Yeah, yeah. Was it his idea? I don’t know specifically if that was his idea. It

was probably Bill’s idea, Bill Oldenburg’s idea. It very much came out of his

philosophy of hire smart people and get out of their way and let’s have this—

what then became characterized as the upside down organization. So it was

pretty fascinating.

The other thing I learned through the course of the interviews was—they’d

start to tell stories about some of the goofy stuff that went on. Steve Schickler

would say, “Well, we just had this meeting and Gary has this huge wheel and

it’s like a wheel of fortune and he’s spinning this wheel in front of the

assembled management staff. And if your name comes up—”And I’m

thinking, “Whoa. It’s like a game show host or something.” Anyway, well,

that’s pretty goofy. And I sort of enjoyed Kraft and had found my way around

being kind of goofy there and wanted to enjoy what I was doing. And I

thought, “Well, this is going to be kind of an interesting environment. Maybe

being a little outside of the norm is the norm in this company.”

03-00:15:21

Geraci: So what year are we talking about?

03-00:15:22

Johnston: 1988.

03-00:15:23

Geraci: Eighty-eight.

03-00:15:24

Johnston: So the company was about 150 million, maybe 160 million in sales. And I

remember they were so focused on the bottom line. Everything was about the

number. Make the number. And the number was earnings per share and the

target was to grow EPS, earnings per share, 25 percent per year. And they had

missed it the prior year and maybe barely made it the year before that.

Because I remember asking Gary what happens if you don’t make the number.

And he said, “Well, that’s a really good question because we’re right up

against that and we did miss it last year.” You didn’t get the sense that

everything would fall apart but you got the clear sense that nobody was

getting a bonus and we didn’t make what we said we were going to go do. So

small company, a growth company, a public company of 150, sixty million in

sales, just starting the expansion into the East. I was in Chicago and I saw the

Edy’s brand come up on television commercials and I said, “Those guys are

ripping off Dreyer’s. I grew up with a brand that looks just like that.” And my

wife told me, “No, no. That’s Edy’s. That is Dreyer’s,” because she knew that,

because the person doing the advertising, the agency doing the advertising

was Hal Riney & Partners and she knew all about Hal Riney at that time. She

ultimately went on and worked for Hal Riney in Chicago and then

subsequently in San Francisco.

43

But just starting the Eastern expansion. So Milwaukee was up and running.

Minneapolis was up and running and these were with real pioneers. The early

guys who went out and opened up a market, which quite literally in some

cases meant fill up an ice cream truck and drive it from Fort Wayne up to the

market and start driving around and selling ice cream before it melted. There’s

a little hyperbole in there, but not much. And try to create a brand. Maybe

Atlanta was about to open. And that’s it. None of the other Eastern markets.

Baltimore/Washington was just opening at that time. But nothing else. No

New York, no New England, no South, no Texas. None of that.

And so I joined as director of marketing, working for Steve. So I took Steve’s

old job basically. Steve was promoted into the VP of marketing spot when Jan

Booth retired and that’s what opened up the spot for me. And I began to go

after it. So put a tie on and come down to College Avenue and start to work in

the area of brand marketing. Very small group at that time.

03-00:18:21

Geraci: That must have been a huge transition from a traditional large corporate to

something that is—[phone ringing]

03-00:18:31

Johnston: Excuse me just a second. I’ll turn that off.

03-00:18:32

Geraci: —just starting to become regional. Very different work style.

03-00:18:39

Johnston: Well, the work—

03-00:18:40

Geraci: Were you nervous about making this change?

03-00:18:41

Johnston: Yes. Well, I was somewhat anxious about it. But I don’t know. It just struck

me. Its fit was good. It’s sort of similar to the Kraft feeling. Kraft was off the

map when I went there and nobody knew much about it and your peer group

would sort of say there’s a lot of risk with it because it’s unknown. Well,

Dreyer’s is sort of the same way, only now it was even a smaller company.

And yeah, friends are saying, “What are you going to do when America wakes

up and decides it’s has had enough butter fat?” This is in 1988. Well, that still

hasn’t quite happened a couple of decades later.

But from the inside, it was very disciplined. You walk in. Gary and Rick are

very smart people. The executive committee I was really impressed with. I felt

they were as sharp as anybody I had worked for in their various functions. Bill

running operations, the guy, Norm Lawson, who ran what was predominantly

the sales organization at that time. Well, it was the west. And Tom Delaplane

was just starting to work on some of the Edy’s expansion. So those guys were

all extremely disciplined. Were all in shirts and ties. You want to put together

44

a good presentation and you want to be—Gary’s going to run a disciplined

organization. So inside the bubble it wasn’t that different. Once you sort of

walked outside and looked at this building, you said you’re in this little brick

building and there’s an ice cream plant out back and some of the offices, if

you go up and feel the wall, it’s brutally cold because on the other side is the

freezer and trucks are arriving all day long. So then you get the sense of this is

a real small operation. But that was cool, too, because you got to meet

everybody. You immediately had access to—you felt like this isn’t about

you’re just doing this, you’re part of this whole thing.

03-00:20:50

Geraci: Do you consider yourself to be a risk taker?

03-00:20:52

Johnston: No. Not in the more celebrated sense of that. I feel like I’ve taken risks like

that. I like to change the world on myself and try new things. So I will take

those kinds of risks. But generally I wouldn’t say I’m a high roller risk taker.

03-00:21:20

Geraci: But you resist absolute routine?

03-00:21:22

Johnston: Yeah.

03-00:21:23

Geraci: And falling into ruts.

03-00:21:24

Johnston: No, that’s definitely true. I really like a broad sense of stimulus, of what’s

going on. I like an arena that is not yet paved.

03-00:21:44

Geraci: That’s a good—

03-00:21:44

Johnston: So I definitely enjoy all of that. And I think I probably went into marketing

because it’s very people oriented and it’s got a lot of stimulus and it changes

all the time. So I do like that kind of change. So therefore, yes. I don’t really

love just routine. And people asked me years later why did you stay twenty

years at Dreyer’s. And the honest statement I’d say is because I could say,

wherever I was, and I said, “What’s going on in the next six months?” I would

say, “The next six months seem like they’re going to be the most challenging

or exciting or anxiety producing that I’ve ever seen in the company.” And so

it always felt like there was this change right around the corner because we

were growing, expanding, being threatened. We were looking at alliances, we

were trying to buy other companies. There was always something like that.

And that kept me so happy.

03-00:22:48

Geraci: Literally keeps the juices flowing.

45

03-00:22:48

Johnston: Yeah. For a long time. Next thing you know it’s twenty years.

03-00:22:51

Geraci: Because within this type of job description there seems to be a lot of mobility.

03-00:22:59

Johnston: There is.

03-00:23:00

Geraci: If you look across the board at all the corporations in the US and the world,

executives are moving constantly.

03-00:23:06

Johnston: Right. And marketing in particular. When I ultimately became the equivalent

of chief marketing officer, which was sort of my final ten years there, that

tenure of that position in the US is about two and a half years typically. So

most heads of marketing last about two and a half years in whatever

organization. So it was very unusual in that way, as well.

03-00:23:39

Geraci: But there's a specific reason for that. They want new ideas, an influx of new

ideas constantly, yet Gary and Rick seemed to be able to give people the

permission to come up with their own new ideas all the time.

03-00:23:55

Johnston: Yeah. And the other root cause of that kind of transitory nature in marketing

is—that’s clearly part of it. But from the marketers point of view is you want a

place where you can see your ideas come to life. And in many places that

doesn’t happen. So you get a lot of marketing people in with a lot of energy

but the ideas are rejected. There isn’t the opportunity. You don’t ever get the

realization of seeing them come to life and learning what works and what

doesn’t work as a result of that. And I think that frustrates people and so they

move around, as well. So it was a unique environment because it had the

discipline and structure of good teaching. I could sit here and I can learn from

everybody that’s around me and learn good things. And it all seemed

somewhat safe in the sense that it’s familiar around disciplined business

management. But you step outside of it and it’s a very young company on a

big growth and it has all that other small company feel to it. And it was kind

of goofy.

My very first meeting was a management staff meeting. It was coming up

rather quickly. Oh, no, that’s not my first meeting. My first meeting was I was

on the executive staff, which was at that time about eighteen executives and I

was going to be—so my position would be a member of the executive staff,

which would meet twice a year, usually on the road. We’d go out to some

location. And I don’t know what to expect at this. Now, this is going to be my

first sort of inside the chamber meeting. I wasn’t expected to present anything.

Somebody comes up and says, “You might want to think about the fact that

46

you might be called on to make a toast of some kind.” “Really?” “Yeah,

there’s this sort of thing that Rick is—particularly the new people.” “Oh,

okay.” So then we go to the meeting. This meeting is in Denver. Denver was

run by a guy named Bob Ryal. It was a good market for us. All of these

people who are running these markets, they were their own people. It was

their territory and it reflected the personalities of all of these different folks.

So the executive staff’s coming to town.

We have this meeting in a hotel. It’s a U-shaped table. And on the serious

side, I had a counterpart who was running new products who was also a

director of marketing who was struggling a bit with the fit at the company. He

had come out of Proctor & Gamble and he was struggling with a couple of the

division managers. And in the course of this meeting, a really heated argument

broke out between this guy, who was my peer in marketing, and one of the

division managers, to a point of openness and candid dialogue or whatever the

diplomats would say. Open and frank discussion. Not coming to blows but

really aggressive and almost personal in the attack. I was like, “Whoa.” Well,

this isn’t soft, safe and friendly little bubble of an ice cream business. This is

serious stuff. And I was perplexed by it a little bit because it was kind of

like—it went on. It wasn’t uncomfortable for anybody. So that was an

interesting observation.

In the course of the same meeting, there’s awards being given out. Gary’s

giving out awards to people who have made their number or not made their

number. You can see what later becomes known as Hoopla. You can see the

positive effect of that. Marketing is still an experiment at this time. The P&L

of the company is divided up into these regional and divisional P&Ls and

marketing doesn’t really have its own profit and loss statement. So these guys

are the kingpins in many ways, and to see them celebrated or see what they

felt like if they didn’t make it, that was interesting to see the power of that.

But then you also saw the fun of it. I saw Rick and Gary work in the way they

worked every single meeting. Opening it as a partnership with commentary,

closing it with both having an opportunity to comment, each bringing their

own twist to it. Very interesting to watch.

Then we get to dinner and then we go visit stores. We go to the store. We go

walk into this grocery store and the entire aisle, frozen aisle, is all Dreyer’s.

So what Bob Ryal has done is he’s set this whole thing up as a joke. “Let’s go

check the store.” We walk in. The entire freezer case of a huge Safeway, I

think it was a Safeway or a King’s Super, is Dreyer’s. And everybody thinks

this is the greatest thing. And so then you sort of go, “Oh, I see.” There’s

going to be fun here, too.

We get to dinner and John Thomason stands up and he is going to now give a

toast and cel—oh, yes, Rick starts to go around the room and I’m thinking,

“I’m up. This is my—“ He comes up and he puts his hand on my shoulder and

47

he says, “And Tyler we’re going to save for a larger audience,” and then just

moves on. So it’s like getting a stay of execution. I don’t have to stand up.

03-00:30:04

Geraci: But a little bit of a fear factor. Save you for a larger audience.

03-00:30:06

Johnston: Yeah, a larger audience. So that was a little frustrating. John Thomason stands

up and one of the local managers there had been very involved with—I think

it’s a boys club of some kind. A charitable thing. And John just thinks this is

the greatest thing that this manufacturing guy’s involved with this. He opens

his wallet and pulls out a hundred dollar bill. And he says, “I want everybody

to reach into their wallet and give what they can and we’re going to help

support this guy.” John pulls out the hundred and I’m thinking, “I just moved

to California. I don’t think I have my first paycheck yet.” But it was really

interesting. It was totally outside of the business context but it was part of the

Hoopla and part of the celebration.

The meeting had all sorts of observations that then became played out for

many, many years. Hoopla was going to be a big part of every gathering.

Hoopla was highly motivating. But to be on the other side of that was—also

had a purpose. I saw that it was a very decentralized company. Gary’s going

to—he’s going to let you guys fight it out amongst yourselves.

03-00:31:23

Geraci: I was just going to ask—

03-00:31:24

Johnston: The power of the ideas.

03-00:31:26

Geraci: When this heated discussion was going on, what role did Gary and Rick play?

Did they just sit back and let it flow?

03-00:31:34

Johnston: Yeah. Gary would let it flow a little bit longer. I think if it ever got bruising,

Rick would kind of try to take some of the heat out of it and—

03-00:31:42

Geraci: Defuse it.

03-00:31:43

Johnston: —defuse it. But the main headline was they’re going to let this go and you’re

on your own. You need to be persuasive on your own. My peer’s boss didn’t

jump in, who was my boss at the time, to defend him. And the other guy’s

boss didn’t jump in to take the other guy and say, “Why don’t you calm down

a little bit.” So you really got that sense that you’re going to work this out

yourself. That plays out throughout my twenty years there in a number of

ways, as well. And the fun. The fact that there’s going to be this goofiness and

48

that clearly was the way that meeting went. We had it twice a year almost

every year for the remainder of my time, that executive staff meeting.

So I went more deep into that because these are so early. This is literally

within my first three weeks and when I flew back with them, I didn’t have a

ride from the Oakland airport so Gary and Rick said, “You have a ride?” No.

They said they’re going to take me, drop me off at my house. I just thought

that was really cool, too. I remember their coming up to the parking area at

Oakland and one of them says, “Do you have beer money, partner?” to the

other to pay for the parking. So you start to see the relationship that they had

with one another, which was very, very exciting, as well.

So we went after it. Those were my observations as I sort of get inculcated,

which became the word. You start to feel the culture more on a daily basis.

The work was tough. The expectation was that, at that time, I think, for

marketing, we expect home run advertising. And there was a search for that.

So they hired the best. They hired Riney. They had paid a lot of money for big

commercials. They had some very early success with big campaigns like that.

The CFO, Paul, was very tough minded about does this marketing stuff make

any sense and does it pay out? Gary was really tough minded. Said advertising

needs to pay out in a year. Most marketers come to their jobs looking at

advertising as a long term equity build, blah, blah, blah, blah. Oh, my god.

03-00:34:24

Geraci: And I’m talking to Gary. He’s, over the long run, still kind of ambivalent to

did it really help the bottom line.

03-00:34:31

Johnston: Yeah, yeah. He knows the moments where it was clear. And we spent a lot of

time on working to prove it. And we did get to a point that we had what we

thought in the marketing group, but also with outside help and also with Gary,

we had made the case. That didn’t mean the case was made throughout the

company. Paul Woodland, until the day he left, was still very skeptical that the

numbers hung together. But Gary was always tough minded with the

marketing group on payout. If you ever got into that argument with him,

which he got into with almost every marketer, and the more you fought the

more you found you were up against a real—you were making the case in the

barrister’s box at the Supreme Court. But you could make it if you brought

facts to it and you stuck with it.

And at first I remember every marketer went through this at this company, and

me, too, where you just go, “He just doesn’t get it.” And then you kind of go

through a phase of righteousness, of, “This is really frustrating. Do I want to

fight this battle every time?” And then you realize it actually made you better

because you’re being held to a standard that was higher than anybody else in

marketing. And so—

49

03-00:36:06

Geraci: Well, it seems that also there’s a tension between that which is marketing and

that which is branding. Branding doesn’t necessarily pay a short-term.

Branding is a long-term goal, whereas marketing seems to be more a short-

term. Is that a fair observation?

03-00:36:21

Johnston: It is. But Gary would—his response to that was, “On the way to the long-

term.” So let’s just say your branding program all in is going to get you there

three years from now. Shouldn’t it have gotten you a third of the way in the

first year, such that it’s paying for what you put together at that time. A

branding campaign is about an integrated effort and advertising one’s

component of it. And that was one of the issues, was when you carve it out

and say advertising alone, prove that that pays out. This, this, this. And today

there are people in the marketing business that do mix models that attempt to

tease all of that out. Big statistical models. And we use some later in the

course of it. It’s still very difficult sometimes to isolate the independent

effects of what you’re putting together.

03-00:37:17

Geraci: I would think it’d be more than difficult. I am not quite sure I would

understand how you could quantify—

03-00:37:21

Johnston: Yeah. You—

03-00:37:22

Geraci: —those type of—

03-00:37:24

Johnston: It can be done in a rearview mirror statistical model called marketing mix

analysis. But it’s pretty complicated and, frankly, we changed directions so—

it works in a big brand with a lot of money that does the same program year in

and year out for about five years. It can give you a reasonable sense of what

the slices gave you.

But Gary’s very tough on the—so I guess the point there is, and this is just the

way he is, is that as much as he believed that marketing mattered—and he

would talk about, “I want this to be a marketing led organization,” which I’ll

come back to in a second, and branding mattered, he wanted home run

advertising. When I first started, marketing organizationally reported to Rick.

So they had divided up the functions. But you very quickly saw that it worked

more as a partnership across the executive committee, but nominally, at that

time, Rick had marketing reporting to him. So my boss Steve reported to Rick.

Within my first year that changed. Or maybe first year and a half, and

marketing switched over to report to Gary because he wanted his hands on

marketing and he wanted his hands on the CFO and the finances and Rick had

more of the leadership responsibility over operations and sales and

distribution.

50

03-00:39:06

Geraci: Almost from the beginning they both had their great skill sets.

03-00:39:09

Johnston: Yeah, yeah.

03-00:39:10

Geraci: And this was a logical way to divide.

03-00:39:13

Johnston: So my point was Gary’s a big believer and he hired and he supported the

group as we built it up. But very tough. He would put you on the box and you

had to know what you were talking about. And he would take you down. Or a

new junior marketer. He was just extremely tough. And I think over time that

became difficult for some people as to how you survive with that. There’s a

path that sort of works well with that, which is stay calm and be disciplined

and be persuasive. You can put emotion into it but only up to a point because

it’s not going to be persuasive to Gary.

03-00:40:00

Geraci: One thing that’s come up in speaking about this. It almost seemed that for

many of the people there was a parental role that Rick and Gary are playing.

You don’t want to let mom and dad down.

03-00:40:10

Johnston: Yeah.

03-00:00:12

Geraci: And you beat yourself more than they would ever have to do—

03-00:40:18

Johnston: Yes.

03-00:40:20

Geraci: —if you think you have let either of them down.

03-00:40:22

Johnston: Yes.

03-00:40:22

Geraci: That obviously is a skill on their part to build this sort of rapport with their

employees. That’s a skill in itself.

03-00:40:32

Johnston: Yeah. Boy, that’s a big subject. And the reason it’s a big subject is a whole lot

of what went on there was a result of their personal partnership and chemistry.

And it doesn’t demean it to say that in Gary’s mind and in Rick’s mind it was

calculated as a superior way of running an organization.

03-00:40:59

Geraci: It was a business plan in and of itself.

51

03-00:41:02

Johnston: Right. Fast forward to “you decide” and the power of that, it’s exactly that.

That you will hold yourself to a higher standard and therefore, they, if you say

it’s an us and them, they’ll get a better result than having pushed their agenda

onto me. I’ll do more checking of it. I’ll hold it to a higher test if it’s my call.

And many, many instances, Gary’s nomenclature around that would be, “I

wouldn’t do it that way but I wouldn’t bet against you.” So he’d leave you

with that statement. He’d try to make his case. Let’s just say he disagrees on a

particular issue. And that didn’t happen all the time, certainly, but it did

happen. But then he’d say, “But I’m not going to bet against you.” And I

heard him say that. He said that to me on a number of—I heard him say that to

everybody. To Tom and various—and what that does—when you leave the

room there—in most cases we didn’t change our minds. We didn’t go back

and go, “Gary wouldn’t do it that way so I’m going to do it a different way.”

But that, “I won’t bet against you,” the confidence that that then puts on you is

also pressure. You hold to a higher bar.

I go through that because I made a long toast speech to all the senior

management of Nestlé who are on our board. Peter Brabeck and others there,

and all of the brass in one of the tribute dinners to Gary. I wanted them to

understand the value of “you decide” as how it can ignite achievement and

how it in fact gets to superior risk management in all of this stuff. Because I

felt they saw that as, “I’m losing control.” And frankly, it was a damn good

speech. Didn’t matter but I felt better for having said it. [laughter]

03-00:43:18

Geraci: [laughter] You felt great afterwards.

03-00:43:19

Johnston: Gary liked it. Everybody else liked it.

03-00:43:21

Geraci: It also seems to me that it takes a certain person then to thrive. Not everyone

can thrive in this sort of a situation. You have to have some self-confidence.

03-00:43:34

Johnston: Yeah, yeah.

03-00:43:35

Geraci: And you have to be able to work outside the box. If you’re a person who

needs absolute direction in everything you do, you could not thrive in this.

03-00:43:45

Johnston: Yeah, right. I would also say that if you weren’t particularly comfortable at

leading that way as well, you would not succeed. So there would be people

that would come in that I saw that would like the personal freedom that they

had but may have difficulty in turning around to their team and doing the

same thing. And the way this worked was no, no, no. This is the way we do it.

Therefore, what your role is as an executive is to work with your team that

52

way, as well. So they might have the self-confidence to enjoy the freedom

themselves but not the self-confidence to be an upside down organization,

kind of leader or manager themselves.

03-00:44:32

Geraci: Well, the traditional model is if I’m your supervisor I’m responsible for

everything you do and you’ve turned that upside down.

03-00:44:40

Johnston: Yeah. But the reason I come back to the calculated statement is here’s

Dreyer’s, a small—this is why people who don’t know these guys—it’s good

business. And they would always say that. They’d say the Grooves are not

only a good environment, we all like it and we all—but this is not about being

warm and fuzzy. It’s good business. And Rick would say that, okay. You’d

expect Gary to say that but Rick would say that. You’d think about it and

you’d go, “Here’s this company with a direct store delivery organization

trying to expand across the country. There are brands everywhere. There are

regional strengths all across the country.” And it’s a smart way to do it. We’re

going to have a local distribution organization. Aren’t they going to be better

at organizing that distribution organization than—

03-00:45:33

Geraci: Yeah.

03-00:45:34

Johnston: —doing some autocratic centralized thing. They’re going to know the market

and how to respond. And therefore isn’t that better. Floydee, I’m telling the

truth. I promise. I’m getting feedback that I’m not telling the truth. And we’re

up against this monolith at that time called Breyer’s, which is initially owned

by Kraft. Ultimately gets sold to Unilever, although we tried to—almost

bought it. Almost got it. Fifteen million dollars short and one elevator ride in a

tall building in New York. But we were close. But you’re up against the

equivalent of the British Army marching in red uniforms all together and so it

makes a lot of sense. So while it sounds warm and fuzzy, “upside

organization” and “hire smart people and get out of the way” and decentralize,

it made a lot of business sense because we could move faster in building out

this footprint across the country that way rather than having management top

down trying to problem solve all these different circumstances.

Now, that worked its way into the marketing function, as well. There’s many

times I would say we were a damn good tactical regional marketer more so

than we were a classic national brand builder because we were building the

brand that way. A, we had to prove that everything we did made money. It

wasn’t like the purse strings were just opened up for marketing. That will tend

to push you toward more tactical things because you can show the impact of

them. B, we wanted our marketing efforts to sync up with the power of direct

store delivery and so the way you do that is work with the regional sales folks

with programs that they can get excited about. And you try to activate them at

53

a local level. So there’s times in our history, and some of them very

successful, where we had separate advertising campaigns for what we needed

to do in Chicago—I’ll tell that story at some point because it’s a pretty fun

one—or when we entered New York. We had an advertising campaign that

was just all about a brand new brand in New York. It wasn’t a West Coast

company saying, Here’s our strengths.” And we did the same thing in Texas,

et cetera. So it was a decentralized push in many ways. So as a marketer I had

to flip around what I knew, which was big national brands going out across

the country and do that much more locally. Again, to me that was really fun. It

was exciting in that it was frankly similar to what you have to do in global

marketing today. You have to think strategically, vertically, but you’ve got to

activate that on a local level and make that work.

03-00:48:39

Geraci: What happens, though? I understand you’re building the regional, the local

and you’re responding to the needs at each of these. So you have many, many

campaigns going. But as you’re also becoming more national, don’t you still

have to have a national campaign?

03-00:48:52

Johnston: Yeah, absolutely. There’s a real tension there between—you can lose your

leverage in brand building by doing that. You could, at worst case, look like a

different brand, look like five different brands, which is going to be very

inefficient because you’re already calling the brand two different things,

Dreyer’s and Edy’s. So, yeah, a lot of what we needed to do was work with

programming that would excite the local region management and pass the test,

but at the same time try to pull the threads back together into one national

message about the brand. Certainly a look, feel, design, et cetera. You could

go too far down the local approach. And we got some of that right and we got

some of it wrong. A lot of it is trial and error. There’s times the programs

work really well once but you can’t keep repeating them or you’re going to

just start to look like the Texas brand and you need to kind of pull that in or

you’re going to cause your manufacturing facility to be having to produce

multiple things like that.

There’s a lot of tension points in that, which meant as an executive or as a

team member you had to get out and meet people, know people, listen. You

had to keep your own agenda. We were there. I always would preach to the

marketing team, “Let’s major in our majors and stay within our majors.” And

I would also tell the sales organization if I felt at times they were coming in to

majoring in marketing as opposed to—I’d make kind of the same speech. So

it’s not like it was smooth. But it was also part of the messiness that was

challenging but also pretty darn stimulating.

03-00:50:53

Geraci: But isn’t it this very, as you put it, messiness that many of the traditional

national or global companies fear so much that they’re not willing to deal

with?

54

03-00:51:03

Johnston: They struggle with it. They struggle with it and Nestlé—the irony of Nestlé

buying the company is Nestlé is highly decentralized. It’s a hundred billion

dollar company. It has to be decentralized. What goes on in India? And it’s

even decentralized in their ice cream businesses. Yet it’s a culture that’s used

to a very strong autocratic core at its center and that’s one of the fundamental

differences. In that we wanted to have a strong core that was built on

persuasion and spirit and support and intelligence rather than autocratic kind

of power center. But I do want to tell one—

03-00:51:55

Geraci: Sure, please.

03-00:51:55

Johnston: —quick story because it happened in the first three or four months. I had a

guy working for me, John Sommerville, who I loved dearly, and John was a

marketer at Dreyer’s who kind of grew up predominantly at Dreyer’s and he

was working in Edy’s. And so he was very attuned to the local differences in

the manager’s power, the region manager’s power. So he gets me on a plane

early on and here I am. He viewed me as sort of the buttoned up packaged

goods marketer from the big companies. So you don’t even walk in with your

own team looking at you like, “Oh, I’m glad you’re here.” [laughter]

So we go to this meeting in Baltimore/Washington, a brand new market. A

guy named Earl Boyd was division manager and Earl’s—I know enough to

know that you’ve got to get to the—what I later started calling the honestly

chamber, which is typically the bar at the national sales meeting or in this case

it’s the drinks after dinner or before dinner with the sales team. So I said,

“John, let’s meet these guys and have some drinks.” So it’s Earl, who’s the

division manager, and Lee Partin, great, great, great long-time sales guy at

Dreyer’s, and John and I. I’m just meeting him for the very first time. They

obviously all have the same bio on me. Here comes Mr. Cuffs on his pants

brand manager, MBA brand manager kind of guy. And we sit down and the so

they start to play a game at the cocktail table. They pull out matchbooks and

start pulling out matches and naming people who have recently been fired or

let go from Edy’s, because Edy’s—one thing about all these little outposts is

you’re churning through people a fair amount. People are joining that just

don’t work. And the way you play the game is you say a game and tear a

match up. You don’t light it. You just throw it in the middle. Earl’s smoking.

We’re all drinking scotch and I’m watching this pile of matches and I’m like,

“Holy cow, what have I joined? This organization, it’s like everybody’s being

fired.” And then Earl now has had a couple of drinks and he looks over at me.

He goes, “So what the hell do you bring to the party? What do you bring to

the party? What are you doing here? Why are you here? What do you bring to

the party?” And he’s just boom, boom, boom going after me like this. And

we’re here. Just like somebody was going, “Who do you serve?” “We serve

the route salesperson. We serve the ice cream maker. Who do you serve?” But

a very aggressive, “Are we sure the transplant’s going to work here.?”

55

03-00:54:58

Geraci: They’re marking their territory.

03-00:54:59

Johnston: Yeah. And we broke through it and I just came back at him about what I was

doing and that consumer orientation needs to be at the top of who we serve as

a company and that’s what we bring to the party and I just kind of came back

at him. Of course, there’s always a postscript to it. So when Earl retired in

Seattle finally, I was invited to his retirement party and I got up to kind of

retell that story. But I brought a huge tray of appetizers with me that I had the

hotel make. And I said, “Here’s what I brought to the party. Brought a big tray

of appetizers.” But it wasn’t for everybody. If you were imprinted with

whatever, if you came out of banking and you now were in the finance group

and you thought you were going to just be a vertical big banker, you were

going to fail. And, frankly, if you were a sales executive and you walked into

Dreyer’s to be in sales and you thought you were cool because you ran a big

sales organization you were going to get blown out of there. But if you came

in as a sales executive and you really knew customers and really bled the

customers that you served, you’d find it and do well.

So the early days were—all of this was going on at the same time. A lot of

fun, a lot of challenge, a lot of internal challenge. Gary and the organization

are going to be skeptical until proven otherwise of what you do, even though

he’s supportive of the vision of this is where we should be. A lot of regional

get out and know everybody. And a lot of war stories that were positive and

some that were negative. Your first interaction with people was very negative

because they’re going to be aggressive and you’re going to come back

aggressively. But you realize that is actually how you start to build some

reputation and some respect.

03-00:57:20

Geraci: Also a sense of respect.

03-00:57:22

Johnston: And a sense of respect. And then we did have the big management staff

meeting within the first several months. And, of course, there’s this big wheel

with pegs on it from a game show up front. And I still haven’t been tapped on

the shoulder at that meeting. And Gary’s up there spinning it. Everybody’s

name was on this thing and usually in multiple locations, because there were

probably sixty of us in the room. The management staff was a broader group.

Primarily the sales guys and the marketing staff and headquarters folks. And

periodically during the course of this meeting, in presentations, we’d go,

“Hey, Gary, get up and spin it.” And if your name came up, you needed to

stand up and talk about—now, this is where he was starting to deal with the

Grooves. They’d just been written down. You needed to talk about a particular

Groove and define it or some war story. War stories were big. It was always

on the agenda of the executive committee. Tell a war story where you’ve seen

the Grooves or what you think is this Groove in action from your center where

56

you were. And it was the most nerve-wracking thing you’ve ever sat through.

This thing is spinning. You’re not going to win a prize. The prize is you’ve

got to stand up. So first of all, if you didn’t know the Grooves real well you’re

a little anxious. Or if you didn’t have a story. So it’s a fun thing but it was just

like—I finally just stood up. I said, “I can’t wait any longer.” [laughter] “I’m

not going to wait. I can’t deal with the tension of the thing spinning.”

03-00:59:13

Geraci: [laughter] Let me get this off my chest.

03-00:59:15

Johnston: So I told the story of what I thought was one of the Grooves in action. But

that’s the kind of thing that would go on and that was also a very interesting

way to inculcate with the management. We’re serious about this stuff. We’re

going to have fun but we’re serious about it and we want it to be broadly held

and you as the management staff are responsible for this.

03-00:59:42

Geraci: Now, this is pre the codified Grooves program?

03-00:59:45

Johnston: Yeah. No pamphlet was together at that time but I think things were in writing

at that time.

03-00:59:53

Geraci: We’re probably at a perfect point to stop and put a new tape in.

[End Audio File 3]

[Begin Audio File 4]

04-00:00:00

Geraci: —Geraci. Today’s date February 25, 2011. Seated with me is Tyler Johnston.

This is interview number two, tape number four. Okay. So we’ve got you

hired now at Dreyer’s and got you through your first few months.

04-00:00:14

Johnston: Yeah. Starting out.

04-00:00:16

Geraci: And you’re kind of still sizing up the landscape at this point.

04-00:00:21

Johnston: Yes. And along the way trying to build a department, a discipline within my

world. I was the director of marketing of established brands and then there

was a director of marketing of new products. We both then reported to the VP

of marketing, Steve Schickle. So my world, when I joined, was Diane

McIntyre running PR. A woman running food service, although she was really

just running marketing related to food service, one brand manager position,

one assistant brand manager working on the light product. I think that’s it.

57

Pretty small group. And the brand manager, who had been there quite some

time, immediately resigned because she had wanted to get the job that I got.

So I had an opening quite early on.

We started to build out the brand management side. And I brought in a guy

named Mark Breier, which of course immediately—we had fun with him and

his first meeting Rick brought a name plate to the meeting and gave it to him,

that changed his name from Breier to Dreyer. Mark was a guy that had

worked not for me, but I knew of him at Kraft. He was one of my first outside

hires. I started to build a build a team of other consumer products folks

slowly, very slowly. I also promoted the assistant product manager, Nancy

Friedman, who had been running the light business. Oh, and John

Sommerville, of course, was working for me, who was running Edy’s

marketing. But it was still this very small group, more regionally split,

because at that time we were just coming out of the phase when the company

was literally—Edy’s was a separate company when it expanded. That was a

novel business approach certainly but it allowed for certain accounting of the

expansion in a certain way. We also were doing new products in a very unique

way, where we were working with an outside organization that was doing a lot

of the new products.

So my job was the established brands; Dreyer’s, Edy’s regular ice cream and

light, and that was it. And PR, food service. The numbers every year were

high. But a lot of things are going on simultaneously. One is we want to build

everything. The current brand of ice cream needs to grow. The light product is

in its second year, maybe its third. Second year. It was introduced in 1987, so

this is its second year. It’s a big success but it needs to continue to grow. We

need to support regional expansion. The company is growing significantly by

adding markets, all of which bring at least attention and maybe an opportunity

around regionally oriented marketing to get them ignited. And so the first

thing I did is I said, “Well, we’re going to have to change this name because

these brands aren’t established. So let’s call it the “not yet established brand”

group. Our aspiration is that nothing is good enough where it is now. We need

to significantly increase it.” And the other unique aspect to coming into this

organization is not only personally seeing that the sales organization is strong,

et cetera, but we have this business strategy called the three-legged stool,

which is we’re going to be a manufacturer and marketer of our core brands,

Dreyer’s and Edy’s in two types, ice cream and light, but we’re going to

distribute other people’s products. Ben & Jerry’s and I think at that time Dove

was in our relationship. Some of the general foods products had been on the

trucks.

The three-legged stool strategy was because distribution is expensive. When

you open up direct store delivery in a new market you put a lot of money in

trucks and routes, et cetera. It cost a ton of money. We’re not in the super

premium ice cream business. They had made a run at it with a brand called

Tres Chocolat, which had failed. Which is not uncommon, when a company

58

tries something and fails into a new arena, often that shuts that door for a

while. It’s kind of like, “Well, that’s not for us.” That’s kind of what was

going on with Tres Chocolat. That was before I arrived. So we’ll distribute

somebody else’s brand in super premium and that will be Ben & Jerry’s. And

we’ll distribute other people’s snack products or novelties, and that would be

Dove. And the money that we make as a distributor from those products will

offset some of the costs of building out the distribution so we can bring in our

company brands that way. It’s a smart business strategy.

04-00:06:03

Geraci: Now, these are the partner brands that you’re—

04-00:06:06

Johnston: The partner brands. So it came out of this three-legged stool. And at that time

they were called “purchased products.” They weren’t called partner brands. I

wasn’t asked whether they should have been called partner brands, but had I

been asked I would have vehemently said no. And here’s why. So I

understand the business strategy. Distribution’s expensive. Carry other

people’s who are not in that arena. But you match that with the fact that our

division managers locally, the business they’re running is being measured as a

distributor. They’re being looked at as distributors. We have independent

distributors and we have company owned distributors and that’s where the

P&L of the company is. It’s all these different distributed company P&Ls

being put together. So here’s why that comes into play for what I’m being

challenged to do and we are being challenged to do in the marketing group

because, again, I’m only one part of it. I’m running the established brands.

And that is that to our division manager in Milwaukee we measure the Edy’s

product the same way we measure the Ben & Jerry’s product, the same way

he measures—he makes a distributed margin on that. The manufacturing

margin that’s being made, because we manufacture this product, he’s not

seeing that on his P&L. His business is, “I’m a distributor. I’m a company

owned distributor.” So from a financial point of view he’s spiritually aligned

with I want to build Edy’s. But from an incentive point of view and numbers,

his business is distributing products.

04-00:07:48

Geraci: So it doesn’t matter what product.

04-00:07:50

Johnston: Doesn’t matter what product.

04-00:07:52

Geraci: Right.

04-00:07:52

Johnston: And there’s a fair amount of products on the truck. And so now as a marketer

I’m not only sort of—we are not only having to make the case of how

marketing works, we’re having to make the case, to a certain extent, of in a

competitive environment with your own sales organization as to why the

59

company brands make sense. They get it. They know where their paychecks

are coming from and they want to build the company brands but all of the

measurement system is askew in my point of view because of these other

products. Now, at that time it didn’t make a big difference because we weren’t

in super premium and we didn’t have many snack products. But it made a

difference when you walked into a sales meeting and you’re going to go to the

sales meeting with your own team and the afternoon, the people that are

presenting are from other ice cream companies coming and presenting to your

own sales organization about the programs they’re bringing. So there’s a little

bit of envy that goes on. The Ben & Jerry’s guys are always coming in

rallying the troops. Ben & Jerry’s has a lot of buzz going. And you get a little

bit of “how come our company brands don’t have the same thing going on that

Ben & Jerry’s does?” So that I didn’t fully see coming in. That added a whole

other layer of how do you become persuasive, et cetera. And for that phase,

though, it was fine. I wasn’t going to raise it up and go—it wasn’t the fight to

fight at that point. And, in fact, it didn’t need to be my fight because over

time, analytically people started to say, “Wait a minute. We should push more

of the P&L to the field that reflects the manufacturing margin of the company

brands.” And we really advocated for that. We were a “friend of the court” in

terms of pushing that because then the company brand profit is going to look

substantially better than just what you’re making as a distributor. But, once

again, it was good business and it clearly got our army going across the

country but it needed to change over time.

04-00:10:16

Geraci: Well, see, Tom Delaplane would say that was the only reason that it did

succeed, is that they had that capability to make it pay for itself. The

distribution part.

04-00:10:29

Johnston: I wouldn’t argue with it. They were business people. They weren’t

salespeople. They were business people. And Tom, clearly, I put in that

category with all due respect. He’s a great businessman with a sales

orientation. And so it absolutely worked but there were points where it was

perverted, if you will. It’s maybe a technical example, but it drove us crazy for

a long time. Milwaukee only had enough money to fund half of the promotion

they needed to really run a promotion on the company brands because their

margins were too thin on the company brands to pay a grocer to cut the price

for this promotion. So then the dialogue became, “Work with the marketing

group. They’ll have money. Get some of their money, add it to your

distributed margin and create a promotion program.” So eventually that got a

little out of kilter because it became who can negotiate better with the

marketing team? And from a marketing team point of view it’s weird because

we have this nest egg of money we can spend and we’re going to spend it with

some of the sales teams, as opposed to if they’re really all business people,

let’s fully reflect what the P&L looks like to them and then let’s work in the

decisions they make. But, again, for that time it was fine. But it did push the

60

brand growth to be more narrow around—w didn’t think about too much the

snack food business. Now, we have no manufacturing capability in that area,

either, and we didn’t think about super premium. Because, frankly, on super

premium it was brilliant. We made enough money as a distributor of Ben &

Jerry’s and we had none of the brand risk. We didn’t have to fire up

advertising and all that stuff. So I’m just saying at that time it worked for a

phase and then, like lots of things, it needed to be retooled as you thought

more differently about brands.

So our brand growth, and particularly me, was about how do we build out the

packaged lines? So when you look at the early portfolio moves it’s light

works, and then frozen yogurt. If light works and there’s a health orientation

going on in the late eighties, early nineties, there’s these frozen yogurt parlors

out there, and, oh, by the way, AC Weber, who is running Minneapolis, was

competing against a brand called Kemps and they introduce a frozen yogurt

and it’s selling like crazy. Because we, as a company, have eyes and ears

everywhere where we are, you jump on it right away. And John Sommerville

walks in my office and goes, “We have got to have a frozen yogurt. I just got

off the phone with AC. This is happening in Minneapolis. We have to get on

it.” So it worked really well that way. In my view as a marketer with this kind

of direct store delivery and regional strength is it’s a great two way street

because you hear immediately about what’s hot and what’s not. If we have ice

cream guys who are acting like distributors and they have a local brand in

their market, which they’re going to have in this very regional business, we’re

going to hear really fast what works and what doesn’t. Now, that plays out in

the history of Dreyer’s incredibly effectively. It started the impetus for getting

in the frozen yogurt business the first time. It also started the relationship with

Skinny Cow that came in as a distributed product or a partner brand, then

later, purely that way, and got so strong we ultimately bought it and now it’s a

big part of the brand portfolio. So it’s a two way street.

04-00:14:36

Geraci: But it’s also illustrative of, as you mentioned earlier, the ability of the

company to react quickly.

04-00:14:43

Johnston: Quickly.

04-00:14:44

Geraci: And efficiently—

04-00:14:45

Johnston: Right.

04-00:14:46

Geraci: —without having to go through this whole centralized process.

61

04-00:14:48

Johnston: Yes, right. Absolutely. I think it was a real blessing. And if I talk to people

today about the advantages of direct store delivery, that was clearly one of

them. I as a marketer who—now, majoring in my major, I’m thinking about

new products. This is later in my life. I’m running new products at Dreyer’s.

It’s great. It’s like having a thousand test markets going on at any one time

because it’s either going on in these markets or maybe we’re distributing it in

some of these markets. That gets played out in the history of Dreyer’s really

effectively. And secondly, when you make your mind up and say you’re going

to get into it, you get into it fast and speed counts when you’re up against big

monolithic Kraft running Breyer’s or then Unilever running Breyer’s. We can

move faster and get to market quicker and that’s a big advantage. And when

you go to market, you can get it on the shelf faster with more presence than I

could ever at a big manufacturer, big CPG company. So a lot of advantages.

And so part of learning, my learning throughout my time there, was knowing

when to kind of check the marketing expertise in the coat check and think a

little more broadly about the total enterprise approach. And I’m not going to

say I came to that naturally. It comes to you because of the environment that

you’re in. I learned a lot through that but you had to listen. And at times I

would be stubborn the other way about no, I want the company brands. But

that’s a back and forth dialogue that was really key between marketing,

distribution and sales in the history of the company. So eventually the P&Ls

changed and we reflected the full P&Ls, which balanced the playing field a

little bit better.

We have to remember that this three-legged stool was a start-up strategy in

markets. It wasn’t an ongoing strategy. And so you get used to being a

distributor of other people’s products. You don’t want to let go of that revenue

and that margin. But there’s times you might need to because now we’re

carrying a lot of items in through our distribution system and we’re building

warehouses. Not manufacturing plants— but we’re building warehouses to

house all of these things. So there’s a big theme over time of it’s a great start-

up strategy, but like a growth business you have to reevaluate that over time

and now start to bring it in and have—

04-00:17:53

Geraci: And it’s allegiance to your own product to begin with.

04-00:17:55

Johnston: And allegiance to your own. So the allegiance was always there spiritually. I

certainly wouldn’t want to characterize it as people didn’t get it. But it’s like

telling you one thing about how to do your taxes from a moral point of view

and then giving you the IRS code over here. You’re going to play it by the

rules of the code. You’re going to find the loopholes or whatever. So that

changed and it was good that it did change. But, again, it made marketing at

Dreyer’s, and being in marketing, not for everybody. Because you walk in

with people saying, “What do you bring to the party?” You got a CFO and a

62

CEO, who as much as the CEO loves what you’re doing, you think, is really

tough on you, on are you paying it out? Does it pay out? Show me that it pays

out! You don’t walk into the sales meeting and find that you have the

audience just to yourself. You’re sharing it with guys who are distantly your

competitor. And you get a little jealous. All of that in a pretty high-paced

environment. So most people worked out but hiring smart became really

important for me, as well, and all of us in marketing as we added to it. You

couldn’t just find the packaged goods person and bring him in and plug him in

and it would work. You had to find people who were going to be willing to

roll their sleeves up and be buffered around by all of this kind of when the—

04-00:19:31

Geraci: How do you go about finding that person?

04-00:19:33

Johnston: Well, we tended to focus. They’re there and they were in the bigger

companies. They're there. You just have to test in the hiring process. For me I

would always say I want somebody who’s had the world turned on them once.

I want someone who’s already shown that they’ve switched jobs within that

company or gone from big to small or some other task, or changed companies,

that would show that they could then thrive in a changed environment. And

we would do what Dreyer’s did all the time, is in hiring smart you put people

through tons of interviews. Eventually we’d get feedback from recruiters, like,

“Come on. This person’s been back three times. They’ve met thirty-five

people.” [laughter]

04-00:20:21

Geraci: Just how many interviews can you do?

04-00:20:23

Johnston: Yeah. And so we maybe took that a little to the extreme over time. But that’s

what you do. And you learn from the mistakes. It’s a batting average business

all the time. Marketing is certainly a batting average business and so can the

hiring be. You can do your best to hire smart. And you have to be tough

minded about if people don’t work and don’t fit and there’s examples like that

clearly. There’s lots of examples like that.

So the business and the brand portfolio goes through an explosion, basically.

We introduce light in ’87. It continues to do well. Yogurt comes out in 1989,

roughly, I think, so that was a big launch. Very successful. And we start to

continue to work down the health spectrum. How far can you go? And we

made a lot of money in doing that. We were first with those products. We

were first with refashioning what was called diabetic ice cream, this little tiny

container into no sugar added packaged ice cream. That was big and

successful. The first run at fat-free was not. It was called American Dream

and it was poorly positioned. It wasn’t quite fat-free and it had this fancy

brand name and it didn’t—

63

04-00:21:55

Geraci: By being poorly positioned, what do you mean?

04-00:21:57

Johnston: It was fuzzy. Usually when something’s poorly positioned it just means it’s

fuzzy. It means it’s trying to be too many things. It’s kind of like, “You know,

it’s a floor polish. No, it’s a dental floss.” It does all these things. But what is

it?

04-00:22:14

Geraci: Yeah, but what does it do?

04-00:22:15

Johnston: What does it do? So it wasn’t fat-free. We ended up repositioning it to call it

fat free, to formulate it to be fat free and call it fat free. So the outcome, after

it failed as American Dream, was to just switch it to something that was

directly what it was supposed to be.

04-00:22:33

Geraci: Well, it couldn’t be branded or advertised as ice cream, could it?

04-00:22:35

Johnston: No.

04-00:22:36

Geraci: It had to be a frozen—

04-00:22:38

Johnston: Right. And there were a lot of battles on that in the history. There were a lot of

regulatory battles, too, because every state had its own regulation on what

was—if you weren’t ice cream, what were you? You were a frozen dessert,

you were a frozen dairy dessert, you were a light frozen dairy dessert. We had

an attorney, a food and drug attorney, who spent the better part of those years

going around state to state and fighting those battles so we could get light ice

cream, Dreyer’s Grand Light frozen dairy dessert, marketed. That was the

beauty of what they did on that. They meaning Jan and the team, was they

didn’t call it light ice cream. They couldn’t. But they used the equity of

Dreyer’s and so it was called Dreyer’s Grand Light. Eventually, in the mid-

nineties, the regulations changed where all those things became categorized.

You could use lite ice cream if it was the following. You could use low fat.

Those all became defined by the FDA when all of the labels changed in what

was called the NLEA.

04-00:23:42

Geraci: But that must make your positioning a little bit more difficult then with these

regulatory changes.

04-00:23:48

Johnston: Yeah.

64

04-00:23:48

Geraci: The wine industry, i.e., has fifty different state regulations.

04-00:23:51

Johnston: Right, right.

04-00:23:52

Geraci: And if you’re dealing with state regulations, federal regulation.

04-00:23:56

Johnston: It’s very hard when you’re pioneering. It’s easier when you’re the second guy

in. When you’re the first one out, and the first time they’ve seen it in New

Jersey or the first time they’d seen it in Atlanta and every state is different and

it hasn’t gotten to the chaos point that the feds have chosen to intervene and

basically say, “We’ll solve this this way,” yeah, it’s tough. A lot of

independent negotiations, most of which we won. We were persuasive on it.

But it’s another part of the new product rollout that had to happen. Same thing

with frozen yogurt. Different definitions of what it is and what it isn’t. same

thing with diabetic ice cream becoming sugar free. Sugar free then needed to

be called “no sugar added.” If you’re going to be in the first wave of

something you’re going to deal with setting the table, so to speak, from a

regulatory point of view. But the advantages of that are you’re going to be the

leader and you’re going to be the first out and you’re going to be able to set

the standard around quality, as well.

But a rapid build out of the healthy side of the business. And we also did a

rapid build out of flavors. The flavor line within the ice cream line needed

news. And that wasn’t a big insight. That flavor is how people think about

their loyalty to an ice cream. Even the most loyal ice cream consumers might

be in super premium around Häagen Dazs or Ben & Jerry’s but they’ll

articulate their loyalty through a doorway that’s first flavor. So, “I love Cherry

Garcia Ben & Jerry’s,” as opposed to, “Oh, I love Ben & Jerry’s.” That tends

to be the hierarchy that’s out there. So that’s true.

We started to work a lot with that. And that was a big part of the marketing

effort in the early nineties, was new flavor introductions. We have direct store

delivery. We have a sales force that wants news. New flavors gives us new

space. In those days we had one UPC on our product. We were able, I don’t

know how these guys—you just kept claiming we’re just this small regional

company as we expanded across the country. One label. So we argued that to

the customer, Tom and Norm and the sales guys saying, “We’ll take care of

this case for you. We know what sells. We’ll tailor the assortment.” What it

gave us was when it showed up on the sales report, it showed up as Dreyer’s

Ice Cream sold all these gazillion gallons because it was all under one UPC.

We knew which flavors we were putting in. The grocer allowed us to tailor

that. Big advantage. Big advantage. It went for a long time, and then as

grocers got more sophisticated and wanted to build their own information

65

systems, it became a real issue and we ended up having to convert. But it also

made manufacturing easier.

04-00:27:09

Geraci: As far as the grocers concerned, doesn’t it deal with their profitability, too?

Certain items you’re selling, they get more of a margin than other items.

04-00:27:18

Johnston: Right. No. They would not. We had priced all the products the same. We

would certainly have a different profit out of vanilla versus a rocky road.

04-00:27:33

Geraci: So the grocery stores are—

04-00:27:33

Johnston: The grocery—

04-00:27:34

Geraci: —are just getting one margin anyway?

04-00:27:34

Johnston: One price at that time. Ultimately the grocery business is all about shift the

control from manufacturer to retailer, if you take the broad view of twenty

years of what’s going on, and information is what fueled that. And so as they

got their hands on data they wanted more of that. They wanted more control

and they wanted to charge you slotting allowances for every new item. And so

it ultimately, like almost every innovation, we lose that advantage over time.

But for many years it was very easy to introduce a new flavor and so the

marketing team was responsible for—and that was really fun. New flavor

ideation. New ideas. We’d poll the sales organization big time. We’d hear

about what’s selling, what’s not. We’d visit parlors. We’d think about what

flavors could be brought to this that haven’t been brought to it.

04-00:28:29

Geraci: Were you doing any demographic studies with consumers or—

04-00:28:32

Johnston: Tons. We started to do a lot more research. Part of that is part of building the

discipline of marketing. Part of that probably is defensive and how do you be

persuasive inside the company? You need some ammunition sometimes as to

how do you know this is better or different.

To go back to this new product thing. When I arrived, the new product piece

had been offloaded to an outside organization who had talked a lot about

quantifying and good testing of new products—almost will guarantee they’ll

succeed. And then when we get them developed, you’ll buy them from us.

And it was meant to think outside the box and get outside and think of new

products. Now, this is not my initial area of responsibility. But one of the

brands that was there right when I got there was called Fruitola. That had

come out of this system. And they used an analysis technique called VOPAN,

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which was called voice pitch analysis, which I had studied in school and had

basically been taught that it was bogus because it’s not the way people

process. It’s just not the way decision making works in consumers’ brains. But

Dreyer’s had bought it big time, that this will quantify and here comes this

product. And Fruitola was a fuzzy positioned product. It was a sort of frozen

yogurt kind of thing with granola in it that kind of was distributed frozen but

you could keep it in your refrigerator for a while. It was low in fat and

therefore healthy and kind of fruit like and it’s name was Fruitola, which sort

of captured a lot of that. And it was revolutionary. A new cup. So it’s in this

snack food arena that we weren’t in at all. We had distributed products. And it

went into test market.

So my peer group partner over here is running this thing and that’s in fact

what this big dispute was about at the very first meeting. It was a multiple

million dollar disaster in that it was a lot of investment and it came out to

market in test marketing and failed for a number of reasons. And that, too, I

think stung the organization in the area of big sexy research. Maybe that

doesn’t work. It also had big advertising behind it, which everybody loved,

which then got tagged as it didn’t work. It overreached in a lot of ways. And

the consequences of that were unfortunate, because there’s an echo effect

always when something like that happens. So everything gets damned. The

judgment, the process, the people. A guy was let go. Somebody has to fall for

it.

04-00:31:37

Geraci: Somebody has to pay the price for this.

04-00:31:40

Johnston: Yeah. And it kind of took us away from big bold moves for a while. That’s

my view sitting there. And I was sort of sitting watching it happen next door,

so to speak. So everything wasn’t hunky dory during those periods but we’re

over here introducing health segments in packaged ice cream. Lots of new

flavors. Lot of fun with that. Limited editions, things like that that were

always bringing news and flavor news to the category.

04-00:32:13

Geraci: Besides the new products, you’re also expanding into new regional markets at

this time.

04-00:32:17

Johnston: New markets. Yeah. So I’ll tell the Chicago story because it sort of fits. It’s

roughly in this time frame of the early nineties. The issue in Chicago, and

Gary’s probably told this story, that many times—the other thing with direct

store delivery is often grocers weren’t just sitting there waiting for somebody

to walk in with a new system of trucks. It was kind of like, “No, I want your

product through our warehouse. We just built this big old warehouse. We

don’t want your trucks coming up to our door. Somebody has to unlock it, it

takes our guy away from the aisle. We can charge you a bigger slotting

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allowance if you’re in our warehouse.” Whole bunch of reasons. And so there

were customers that said, “No, we won’t take you unless you come through

the warehouse.” And there were some celebrated examples of that. The main

one in Atlanta, Kroger, wouldn’t take us. They wouldn’t take the ice cream for

that reason, but our health products, lite, yogurt, were so different and there

was a different buyer buying better for you part of the store that we got in that

way.

04-00:33:21

Geraci: Interesting.

04-00:33:23

Johnston: So we actually had a weird entry into Atlanta. Most Atlanta consumers, when

they first saw Edy’s, you would have thought of it as a therapeutic health

brand because all you saw was lite and yogurt in a health section in Kroger.

That poses some interesting brand element challenges later on.

04-00:33:36

Geraci: How is this a brand? Yes. Yeah.

04-00:33:38

Johnston: So if you come back to Chicago, there’s several examples of this. But in

Chicago, Jewel, which is half of the market, early on was going to take Edy’s

but then heard we were not going to come through the warehouse—we were

coming DSD and said, “No, we’re not going to take you.” We went in anyway

because we entered the market. We had Ben & Jerry’s, we had partner brands,

enough to power the trucks up and we had Dominick’s, which is the other half

of the market taking us. But we ran without Jewel, 45 percent of the market,

for more than six years. So you bleed money. And now you think about trying

to build a brand and you want to bring advertising in and you know that in

half of the market almost—

04-00:34:29

Geraci: Consumers won’t even—

04-00:34:30

Johnston: —you’re unavailable.

04-00:34:30

Geraci: —have access.

04-00:34:32

Johnston: And we tried everything. We were selling hard. We were doing all of this

stuff. We were doing contests of going in and filling out requests. Just doing

our level best. And I think John Sommerville was the impetus for this idea. I

am pretty sure he was. He said, “Maybe we need—“ because he was a big

advocate. He worked for me and he always had a regional orientation and a

very high affinity with the sales organization. They really understood him and

he understood them. He said, “Maybe we just got to do something that’s more

Chicago oriented.” So things start to come together. It turns out that the guy

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who’s now become the head guy at Jewel, of all of merchandising, is my old

boss from my internship, the little bright guy who was in charge of me in that

summer internship named Greg Josefowicz. Brilliant guy, very analytical. So

I’m kind of like the only grocer I know is now in position. So I said, “That

could be fun.” Maybe that’s an opportunity.

But what we decided to do was be a “Chicago brand.” Let’s go be as big as we

can be in Chicago. So we hired a Chicago advertising agency separate from

our West Coast agency. We hired a guy that my wife knew of, because she

had built her career in copywriting in Chicago. Very small shop, very well

connected. And we auditioned him basically and John and Nancy Friedman,

who was another marketer, and I said we’re going to build a Chicago program

and let’s try to push this one more time from the marketing side to be so big

that Jewel has to say yes. That was the idea. And it all fell together in a really

fun way. John had spent a lot of time in Chicago. I’d lived in Chicago so I

knew the city. The local agency comes up with this idea. We’re all about

flavors and news and stuff like that, so that’s kind of going on with our brand.

Neat flavors, all these types. And the agency comes back and pitches us on

this idea: let’s reenact the great political debate in Chicago that occurred when

Jane Byrne, after she became mayor— she became mayor and the city

council, the aldermen, the powerful people in the city all revolted against the

mayor. They were arguing and standing on the tables and all this stuff. And

Jan goes, “Let’s reenact that with them debating your flavors instead.” And,

“Oh, by the way,” it’s a classic Chicago story, “our corporate attorney from

our agency is the son of Mayor Daley’s former counsel,” one of the king pins

of the machine, “and we think we can get two alderman. Roman Pucinski and

one other, Danny Davis.” And this is within three years or four years of this

happening in Chicago, where it was all the rage.

04-00:38:09

Geraci: So this is pop culture.

04-00:38:11

Johnston: This is pop culture.

04-00:38:11

Geraci: They understand.

04-00:38:12

Johnston: And John and I and Nancy go, “This is great. Let’s do this.” And so to kind of

speed through it, we pull the old high school thing of we go to one alderman

and say the other guy’s agreed to do it and we get six of the most

argumentative well-known aldermen who think this is just hysterical and they

agree to do it. And we shoot these commercials and it’s called “Council

Wars.” It’s the reenactment of council wars. I’ll show it to you some time.

And we get Danny Davis, who’s still there, Roman Pucinski, who’s dead, who

was one of the king pins, Luis Gutierrez, who’s now in Congress, another guy,

Bloom, and there’s one other one. And a couple of them later on went to jail.

69

They’re just classic Chicago. And they love it. And we’re going to pay them

$2,000 each, which in and of itself becomes a story because everybody wants

to know where’s the money going. Follow the money for this ice cream

commercial that later the press hears about. And John, bless his soul, we hire a

local PR firm and we just power this thing up. The commercials are really

funny. Really funny. [laughter] These same guys standing up with our product

and we time it so that’s going to hit and then my job is to go to Greg

Josefowicz and say, “We are going to come with a big campaign. We are

going to become Chicago’s ice cream and here’s what we’re going to do.”

And Greg is a born and raised Chicagoan. So I’m supposed to do the

schmooze on the outside here with the customer. John organizes all of our

route people. All of the families are going to swarm Jewel when this campaign

hits. We’re going to throw a big PR event, et cetera.

It hits and it hits big. We start that advertising. We have that big PR event. It’s

all through the papers. Our people go to the stores. Jewel’s starting to get

called all the time. “What about Edy’s? What about Edy’s? What about

Edy’s?” And John and I are somewhere and we get word from our PR folks.

They said, “It’s going to be on NBC tonight.” NBC News is going to close

with this bit on this advertising campaign and it’s so funny. So here’s Brokaw

doing this story about our advertising campaign and showing the original

footage of the alderman, the same guy standing on the table screaming. Now

they’re holding up, “This has been a strawberry town and it will always

remain a strawberry town.” So now it’s on the network news and we’re just

like, “God, this is fantastic.” And it worked. Within three months Jewel

basically caved and said, “We’ll put you in the stores.”

04-00:41:16

Geraci: This is after years of resisting.

04-00:41:19

Johnston: Years of resisting and years of a lot of attempts. So it was a full court press. It

was a tailored marketing idea. It was activated locally with the resources who

knew how to do it. It could only be done in Chicago. It was a massive PR

push. It leveraged our sales team and it leveraged all of the energy of the

whole Chicago sales organization because they had worked at this for years.

And it was a big, big deal. So it was very cool. It was very fun. And it was

like at the end of it, here you go. I think we made a difference. So it’s a really

fun piece of advertising. It was a good story.

04-00:42:03

Geraci: But as you said, you met a local criteria.

04-00:42:07

Johnston: Yeah, yeah.

04-00:42:10

Geraci: This is a town of political—

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04-00:42:11

Johnston: Yeah. That could be done in Boston and it could be done in Chicago. You

could do it with a sports team in New York or something. But the nice part

about that, big tactical win, but you can’t continue it necessarily. Now it’s got

to fold into the bigger campaign at some point. But it served its purpose. And

we felt really good about it as a marketing group because we did feel like it

wouldn’t have happened without that resource and that thought.

04-00:42:41

Geraci: Well, the fact that it made national news also.

04-00:42:42

Johnston: Yeah, that was kind of fun. I remember John and I—

04-00:42:45

Geraci: You can’t ask for much more out of a local ad campaign.

04-00:42:48

Johnston: Yeah. John and I were somewhere in the East at another sales meeting and we

drove to a restaurant to watch it. He and I were at the bar watching this thing.

We’re like, “This is great.” So that’s what I mean. And in New York. When

we went to New York we did an introductory campaign that wasn’t as clever

as that, I don’t think, but it worked pretty well. So for a while, that’s what I

mean, we tactically supported the expansion of the company. But these were

two year hits and then you’d have to pull it back into a bigger thing. But I

think some of that is in response to it’s got to pay out. What do you bring to

the party? All these things ultimately built up into a marketing program that

was very different. It was very different than I ever would have thought we

would have been doing.

04-00:43:44

Geraci: It almost seems that you have almost a company model here of—first thing

you do is, to get into this new market, you have to set up your route, your

DSD type system. Once you have something rudimentarily in place, then you

come in with a marketing campaign and then hopefully you’ve established

yourself.

04-00:44:04

Johnston: That’s right. That’s absolutely right. And then we get the P&Ls oriented more

toward the company brands. And all of this builds momentum, too, within the

company. Again, I do feel like part of our responsibility was to build this

discipline up to a pillar of equal strength and so a few of these go a long way

to doing that when you get to the annual sales meeting and see it and see these

kinds of things work.

04-00:44:37

Geraci: That must have at least gave you a good argument for how to justify yourself.

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04-00:44:40

Johnston: Yeah. I think everybody was trying to justify themselves because you really

wanted it to succeed and you wanted to bring something to the party. You

didn’t want to let people down. So it’s not just the marketing organization in

that regard. So that was a particularly fun phase, even though everything in

my academic training would say, “Well, so you’re kind of a regional tactical

marketer.” But the answer is look at what’s happening to this company. We’re

growing. It’s working. We’re getting there. Simultaneous with that, there are

big things happening. And others can tell that story better but we get to the

point of realizing that we may have the opportunity to buy Breyer’s and that

Kraft is thinking differently about do they want to get into this business. And

we were successful enough that Kraft blinked and decided the only way to

succeed in competing in ice cream, we better try DSD, direct store delivery.

And so they started in the southern states, southeastern states, to convert to

direct store delivery. And that was like we got the other guy to blink, because

we knew that nobody is going to build this thing. Nobody else is going to

build a DSD system. It’s too expensive.

04-00:46:20

Geraci: And hadn’t you had problems? This is Kroger country, right?

04-00:46:23

Johnston: It’s Kroger country. And so we’d had this issue with Kroger in Atlanta, et

cetera. And Kraft had the same issues and they ran into it. And they were big

in Florida and wanted to make a conversion to DSD, and everybody in

Florida, even though we were DSD at that time, they said, “No, you’re not

going to do that,” and they kicked them out of the stores. And then they would

do things like de-list other Kraft grocery products to get Kraft to yield on go

through the warehouse. So Kraft got a much bigger leverage played against

them because the grocers knew they weren’t serious. For us, we were serious.

04-00:47:06

Geraci: That was your product.

04-00:47:07

Johnston: This was our model. We’re going to business this way. Or going to market

this way. So the result of that, I think at a strategy level, Kraft determined that

maybe this business isn’t for them. The margins were thin and it’s a different

brand, Breyer’s, and so there’s a bigger story there. There’s a better story and

it winds its way through to people that we knew and the person that had been

running Kraft ice cream, a guy named Herskovitz, and he was no longer there

and he’s thinking about trying to see if there’s a way to put it in play. But the

short version of that story is we got Kraft to the point of agreeing to sell the

business and almost to the point of agreeing to sell it to us without shopping it

to anybody else. But Mike Miles, who is then the CEO of Kraft, and he was

playing to become the CEO of Philip Morris, who had bought Kraft,

determined that he needed to shop it for fiduciary responsibilities, to put it out

there with investment bankers. So he did it in a very short period of time,

72

thinking that this would trap others. And in that time period, Unilever thought

Nestlé was the other buyer and so Nestlé immediately—excuse me. Unilever

immediately came to the table because Unilever and Nestlé had this

worldwide thing.

04-00:48:49

Geraci: These are global companies.

04-00:48:52

Johnston: And so they jumped in the game and here we are literally sitting in a

conference room out in Oakland listening to Gary and Paul Woodland, who

are with the investment bankers riding from elevator, floor here to a floor

there, back and forth, and we knew we had the deal in hand and Unilever

outbid us by—I think it was about fifteen million bucks. But it was a number

that we just couldn’t go to as a small public company.

The marketing side, that meant for weeks Bob Johnson, who was then my

boss, and I and a few others were spending time thinking about what will life

be like. What would life be like if we now buy Breyer’s with a footprint

across the eastern part of the country and we have Dreyer’s in the west and

we’ve started this Edy’s thing. It was a fascinating portfolio challenge to think

about. That’s in the category of the next six months are going to be the most

exciting six months.

04-00:49:58

Geraci: [laughter] Of my life.

04-00:50:00

Johnston: Why do you want to walk away from this? But we didn’t get it and Gary—I

think he described that as one of his more disappointing moments. But, of

course, that set in motion it wasn’t Nestlé at the other end of the line, it was

us, and once Unilever bought Breyer’s, Nestlé came to us and said, “We want

to do something,” and that’s what brought Nestlé to the table initially as an

investor in Dreyer’s, as part of what was called the white squire strategy

where Nestlé took a piece of Dreyer’s and GE Capital took a piece of Dreyer’s

and both of those pieces were locked up for ten years and it gave us a

tremendous amount of protection as a public company to be able to go now

and really invest—

04-00:50:47

Geraci: Well, it protected you from any sort of hostile takeover within that period.

You had a secure decade to work with.

04-00:50:52

Johnston: Right. And that’s what opened up the opportunity structurally for what was

called the Grand Plan, which was a massive investment. Rather than a market

a year or two markets a year and a little bit of marketing scattered in tactical

bundles, let’s turn on the dial. Let’s ramp up advertising, ramp up new

products and ramp up thirty-five—I think it was thirty-five. Thirty to thirty-

73

five new markets at one time. And so this is 19—ha, I don’t remember. It’s

roughly ’91, ’92, somewhere in there.

04-00:51:36

Geraci: It’s the early nineties.

04-00:51:38

Johnston: Yeah. And so then that phase is upon us. So things have changed a bit. My

initial boss, Steve Schickler was moved out of that position and he ran food

service. Gary hired from the outside and brought in a guy named Bob

Johnson, who was a very seasoned packaged goods marketer out of Clorox

and Bob came in as my new boss right in that phase. So he came right after

Chicago and right before the Grand Plan. And meanwhile, the organization

had continued to build. More brand managers, more brand groups because we

have more brands. My own area of responsibility grew in that Bob put all the

brands together rather than have some new product brands over here. And he

took the food service responsibility away and I think PR at that time. No, no, I

kept PR at that time. But tried to winnow it down to where I was now a

director across multiple set of brands so he could have kind of one place to go

for that. And then I had more senior managers under me at that time, group

brand managers that carved up the brand. So the pyramid started to grow a

little bit.

04-00:53:10

Geraci: So you’re building your own group.

04-00:53:11

Johnston: Yeah, yeah. And to be fair, Gary’s supportive. Bob’s a big supporter. And

we’re building it out. And, of course, the need is there because we now have

the opportunity to take both jets at the same time and floor them.

04-00:53:33

Geraci: Can I say, thirty-some markets in a very short period of time, that’s a huge

expansion.

04-00:53:37

Johnston: Yeah. That was the end of scattered regional efforts. That’s not to say regional

wasn’t important but you couldn’t do that on that scale. You couldn’t activate

the brand simultaneously in thirty-five places. If you’re going to do that,

you’d do it as a national campaign. As the business grew, we grew back into

that strategy of now it’s time to pull it together. So we changed advertising

agencies. Bob and I auditioned new agencies. We found a new agency and we

started what became the “evidently campaign,” which for a good period of

time anchored the brand across and it was our national campaign and we were

spending substantial amounts of money in media and everything else.

04-00:54:36

Geraci: What’d that campaign include?

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04-00:54:38

Johnston: Creatively? What was it—

04-00:54:40

Geraci: Yeah, creatively.

04-00:54:44

Johnston: I would say in many ways it was branding the ice cream delight moment and

attaching our brand to it. So it was people in what looked like an ordinary

situation, upon finding that they’re not just getting ice cream, they’re going to

have Dreyer’s, a flavor of Dreyer’s, a particular flavor of Dreyer’s, would do

something extraordinary and then this understated close that said, “Evidently

it’s not your normal ice cream,” to sort of say there’s something very different

about this ice cream. People kind of go do bizarre things, although the things

were not goofy bizarre. They were just funny. So the baby spot, the old man

having trouble getting out of the chair because his wife’s calling him who then

does the James Brown splits and things like that. A dog on the bed. The

husband and the dog sleeping together, the wife coming in saying she’s

brought groceries, oh, she got some ice cream. They don’t stir, they’re both

snoring. “Oh, it’s Edy’s.” The dog gets up with the guy and they do a high

five, which took twelve hours to get the dog to do the high five. It was a real

dog.

04-00:56:02

Geraci: This is before computer CG, right?

04-00:56:03

Johnston: Twelve hours. Twelve hours. Yeah. I was like please. So it was a very fun

campaign that needed executional breadth to keep it humorous.

04-00:56:16

Geraci: What advertising agency were you using?

04-00:56:17

Johnston: This was called GMO. Goldberg-Moser-O’Neill. It was a new agency formed

out of the folks who had been the Chiat/Day office in San Francisco. A very

creative group and originally they were around the table and part of the

original Apple 1984 introduction when it was Chiat/Day. So clever people.

It’s what we loved in an agency relationship, what I particularly loved. Very

smart, creative team that were going to immerse themselves in the business

and be our partners and not a lot of hierarchy, not a big group of people. I’m a

firm believer that if great marketing is going to happen it does not benefit

from scale of having thirty-five people making a decision. You need a

relatively small group of people and you either need a moment of inspiration

or a moment of desperation, both of which are likely to result in some bold

stuff. And Bob was very good in being a steward of this, as well, and a

defender of it and that’s when we analytically put in a lot of measurement

techniques, because if we’re going to spend this kind of money, now’s the

time we might be able to measure it. And so we started to isolate markets, and

75

DSD again allows us to go to the Phoenix/Tucson media area and run

advertising only in Phoenix and not in Tucson and measure, because we’re

distributing to stores in both places that are the same grocery store chain, that

are going to have all the same promotions and the same DSD underneath it.

We can start to create what’s called a controlled store test of our own. We

have the data because it’s off our trucks and we’ve taken out some of the

noise that normally happens when you do market to market tests and you

control for some of that. We set up pairs of these, hundreds of pairs of these

kinds of situations across the country where we could bring a database

forward. And ultimately, and to my satisfaction in my marketing grave, I think

it proved it. Gary did, too. Others, like I said, are [skeptical?].

04-00:58:37

Geraci: There’s always naysayers.

04-00:58:38

Johnston: There’s always people who are skeptical of it. That’s fine. At some point,

what are you going to do? We really, really think we’ve proved this. So that

campaign ran pretty strong and hard. Now, we have a whole lot of other stuff

going on. A lot of new product effort, as well, at that time. But still a three-

legged stool. Largely staying out of the snack business. We did introduce a

first wave attempt with a fruit bar and then an ice cream bar. The fruit bar

today is still very successful. The ice cream bar really, again, we just weren’t

set up for the manufacturing of it and we still had a lot of competitive items on

our trucks and we didn’t do very well with that. Super premium we sort of

stayed out of but I’m about to come back to how we started to put a big bear

hug around that from a new product point of view.

04-00:59:47

Geraci: Before we move on to that, were there any other companies using a similar

type of growth pattern over this period of time or was this really just an

exceptionally Dreyer’s story?

04-00:59:59

Johnston: In our category or generally?

04-01:00:03

Geraci: I guess in any category generally.

04-01:00:11

Johnston: At a related time, I would say with a West Coast orientation, Odwalla was

doing a similar thing. DSD based and fueling brand growth through direct

store delivery. I certainly would put Starbucks in that. I’ll come back to

Starbucks. But Starbucks in that category. Maybe at that time it was still a

regional growth company, maybe 200 million in sales, 300 million in sales,

with a vision to stamp—to start to march out and build that out across the

country. If you go in history, yes, Frito Lay did this. You’ll hear Gary say that

or all of us. In fact, the Grand Plan, the original call for the Grand Plan, when

we fashioned that plan of if we have protection and we can take the bottom

76

line underwater for three years and invest in this business and call it a surge

effort, it was called the Coca-Cola plan. And so we would say we want to be

the combination of Coca-Cola and Frito Lay in the ice cream business. The

brand strength of something like Coca-Cola, the direct store delivery, snack

food army on the streets of Frito Lay and that’s what we modeled ourselves

after. So that would have been a story but that preceded us.

04-01:01:35

Geraci: That preceded you.

04-01:01:37

Johnston: So not a ton.

04-01:01:37

Geraci: Not a ton.

04-01:01:38

Johnston: Not a ton doing it at that time. Beverage brands maybe. Snapple you would

say overlaps that time period and doing high growth but working through a

bottling network, not their own company on expansion. So pretty different.

The fun part about it is our investment banker early on, that Rick and Gary

uses, was Hambrecht & Quist, which is a growth investment banker out here

in California. They’d have a conference every year. I’d go to it. Gary got tired

of going to it so he’d send me over because I kind of liked listening. They’d

showcase brands they were following. For the most part, it was tech brands or

small growth companies like Odwalla and Dreyer’s. So we fit in this weird

world. We weren’t a—

[End Audio File 4]

[Begin Audio File 5]

05-00:00:00

Geraci: Vic Geraci. Today’s date is Friday, February 25, 2011. Seated with me is

Tyler Johnston. This is interview number two, tape number five. Well, when

we left off we were—

05-00:00:16

Johnston: Kind of in the Grand Plan.

05-00:00:18

Geraci: Yeah, talking about the Grand Plan.

05-00:00:20

Johnston: Yeah. So the short version of the Grand Plan was it was a fantastic three year

surge effort on all cylinders for the company. Market expansion, brand

expansion, new product expansion. Build up of the organization simultaneous

with that across a lot of functions. And approaching grocers in different ways.

No longer starting regionally and working up this way, but going to national

accounts, making big presentations.

77

05-00:00:53

Geraci: The grocery business is also becoming—

05-00:00:56

Johnston: More centralized.

05-00:00:56

Geraci: It’s becoming centralized.

05-00:00:57

Johnston: It is.

05-00:00:57

Geraci: There have been a massive amount of mergers and buyouts, acquisitions.

05-00:01:01

Johnston: Right. But ironically, all these big companies had been making these “top to

top” presentations for years. You got to go to the head of whatever, Kroger or

Safeway or American Stores, as it was called at the time, and make these

presentations. And Dreyer’s really wasn’t doing it. We were selling really

well at the division level. Really well. And part of the reason for never doing

it was it never really yielded very much. We certainly would touch base there.

But with the Grand Plan it was like now we have something to talk about.

We’re going to change this business nationally. We are going to be a national

brand and we are going to take this fragmented business and it is

consolidating. So we did go on the road as a combined entity, but particularly

Tom’s organization, and with Rick and Gary and all of us participating in this,

but make the big presentation. And now we have something to talk about. We

have a big push here. And, of course, internally it’s all being activated by

we’re going to become number one. The lines will cross. We’re going to take

over.

05-00:02:17

Geraci: Is there any problems with production capacity at this point?

05-00:02:21

Johnston: Yes. Always needed to be expanding that. I’ll get the years wrong, but

obviously had outgrown the factory in Oakland. That was moved and built in

Union City. Fort Wayne was a constant mystery house of another line, another

line, knock that wall down. I think the neighbors probably—this thing is

creeping our way. What did we do? We had some co-packing in Denver and

we bought the Texas facility, the Houston facility, which was an old plant. So

that was right around that time. We still didn’t have big northeastern capacity,

so we were going to be shipping from Fort Wayne and some from Houston.

But yes. Everywhere in the organization was going to be pressed. But very

exhilarating because, again, we’d been in a make the number, make the

number, make the number, quarterly earnings, quarterly earnings, multiple,

multiple, multiple, what does the street think, what does the street think. And

the finance organization did the same thing. Went to the street and basically

here’s what we’re going to do. We’re going to blow away the bottom line for

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two or three years here with this big play. So it was a very fun time because

everybody was doing the full court press. And we were fired up. We were

fired up. We didn’t buy Breyer’s. They got it. This is a big war. We have a

new board of directors. We have Nestlé at the table and GE Capital at the

table. It was a fun period.

I remember when we went to announce it we held two meetings. One in the

east, one in the west. Got in all the sales guys to make the presentation and it

was an interesting reflection—I remember this—on the different cultures. It

wasn’t just a Dreyer’s culture. There was an Edy’s culture, which was more

pioneer. People with arrows on their backs who had been in little forts. So

underappreciated and under-funded, usually. They’re out there with their

expansion. And now to have a big program coming, very appreciative.

Breaking out in applause, especially since, by the way, none of this is really

going to hit your budget. It’s all being paid for over here. We’re all going to

make our bonuses, blah, blah, blah. Very exciting. Come to Dreyer’s and do

the same meeting. I finished my presentation. I’m talking about quadrupling

all this stuff, this huge program for the year, and the room is kind of like,

“Yeah, that’s neat.” And so I remember saying to the entire room, I said—

there’s this pause and I just said, “Well, that’s better than a stick in the eye,

isn’t it?” They were kind of like, “Hello?” Because Dreyer’s had kind of been

the profit engine and where more of the resources had gone over the years.

And a little more the big market share position. It was just an interesting

moment, that even under this big culture that had a lot of the same blood

flowing through it, there were these differences of the pioneering of Edy’s.

Now, in my opinion, some of that is Tom because Tom had been the General

of that thing. As Tom came in and then took over sales for everywhere, that

changed and it all elevated. Not to say that what was going on before was bad

but it did elevate. But it was kind of interesting.

05-00:06:01

Geraci: Well, it’s back to your premise that you were building all these small pieces

and now you’re putting the big puzzle together. You’ve built a lot of bricks.

Now you build a house.

05-00:06:10

Johnston: Yeah. And so that era is catalogued pretty effectively. Results were big. We

didn’t pay out everything we spent. Frankly, when you do have a surge like

that and a ton of money, if we were to do it all over again, there’s a bunch of it

I would spend differently. But we kind of learned that, too, and that helped us

going forward. But the lines did cross and we obviously threw the big party. I

was in on the planning of the party, which was one of the more fun things to

be a part of. How do you plan a million dollar party? So my little ad I’ll tell

about was I did have some fun with one aspect of it. Once they said we’re

chartering these planes I figured out that if we’re chartering these planes, then

can we say anything we want on board these planes? And it was kind of like,

“Yeah, after the safety announcement.” It’s kind of like it’s all your people. I

79

said, “Okay.” So I talked to Gary and Rick and I said, “Here’s what I want to

do. I want to go down to a flight simulator and film you guys. I want to do a

fake flight orientation from the pilot,” because in those days it was always

United and the pilot turned around. “Thank you for flying with us,” blah, blah,

blah. Your seat, all this stuff. And so I thought, “Let’s do a fake one and put it

on and make it so that people don’t realize it’s fake for a while and then they

realize it’s actually Rick and Gary flying the plane.”

05-00:07:41

Geraci: And then they really panic.

05-00:07:41

Johnston: And then they really panic. I get them down. We get a flight simulator down

at the Oakland airport and I film them. I need to show it to you somebody. It’s

pretty funny because it starts with an actor who’s sitting in the third seat and

meanwhile—it’s sort of use every gag from the movie “Airplane.” In the

background, here’s the silhouette of this pilot and co-pilot. You can’t see them

because they’re not turned around. But they start to do very unusual things

like spray Windex on the window and start to wipe it while they’re flying a

plane, while this guy’s giving the pitch about we’re happy to be—he’s giving

the straight pitch on your seat back and this and that and overhead masks.

We’ll be flying at this altitude and the weather. Meanwhile, Gary hands Rick

a giant roasted turkey leg. I’m not sure if they thought that was funny but I

thought that was funny. And goofy stuff like that. Unfolding a giant map and

blocking the window. And then eventually they turn around the camera comes

in and of course it’s Rick and Gary welcoming everybody to Hoopla Air and

then they do goofy stuff from there. So that was kind of fun. So it was a great

party. It was a great party. That’s about what should be said about it. It was

just so fun.

05-00:09:08

Geraci: I like the idea of the Hoopla Air, though. You have to admit, that starts people

off on their journey out west.

05-00:09:11

Johnston: And we did have some fun in the film with the upside organization, of turning

the plane over and them doing some interesting maneuvers with the plane. I

wasn’t on a plane but I did hear from people it went over pretty well, so it was

pretty fun. And the only other thing about the party is the spirit in the room

was amazing. To have every single person in the company for that period of

time and then pour them back onto the airplanes and get them home and give

them the day off for 1,800 people in a DSD organization that has to keep the

lights on all the time, it’s pretty cool. And it became legendary. It became a bit

of an issue in that we never did have the second party, which we were going

to call the Grandmother of all Parties. But I guess we did in different ways, we

had that party. But a really fun time. But work to be done. You’re now on a

bigger stage, more markets, the goals keep increasing. And the Grand Plan

came with a fair amount of expectations on what our growth was going to be.

80

05-00:10:16

Geraci: Because you are the national leader now.

05-00:10:19

Johnston: Yeah. We’re now the national leader but now it’s about how you really close

it out and go further. So organizationally some things changed. One of the

guys that I had working on new products—I had both established brands and

new products now and kind of the whole portfolio of brands. I was working

for Bob. Two things were going on. I was having trouble hiring. It’s very hard

to find somebody who’s really good at new products and to hire in somebody

new in an organization and that was the position I had open. I really wanted

somebody great and we had big expectations on building new products. I was

searching and searching and searching, wasn’t quite finding the right person.

Secondly, other things were brewing that I wasn’t privy to in the executive

chamber. So what happened, as I recall it, was Rick and Gary approached me

with Bob’s permission and they basically asked me to think about moving and

doing only new products and give up my keys to the brand. And, “Oh, by the

way, what we want you to do as part of that,” and I guess we can put this in,

“is we’re getting frustrated with Ben & Jerry’s because while we keep this

reserved for them in super premium, they’re growing less. They’re not as

innovative. They’re less attuned and they’re more a pain to us. They’re fearful

of us because we now have 80 percent of their distribution or 90 percent of it,

and we want you to think about how we could—“ I guess the word I will use

for this purpose is kind of surround them and put pressure on them from a new

product point of view. And basically then make the case to them that if you

aren’t going to innovate, we’re going to do it. That was the idea. So it was

kind of a soft think about how to get into super premium, even though—

05-00:12:44

Geraci: A soft nudge.

05-00:12:45

Johnston: —you’re precluded from certain things in super premium because of our

contract with them. And we want you to do that as part of this new product

portfolio. I think that’s about as far as it went there. Maybe there was even a

little further nudge of maybe that will bring them to the table.

05-00:13:08

Geraci: Had you been doing some R&D on a super premium product?

05-00:13:13

Johnston: No, no.

05-00:13:14

Geraci: So you didn’t even have a product?

05-00:13:17

Johnston: No. We had the echo of the old Tres Chocolat. We tried that once and it

failed. Great product, hard to build a brand. But I was very confident in the

R&D that we had and the product formulas. That’s a whole other story. Kind

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of a quick interesting part of Dreyer’s is R&D has always been part of

marketing, was always part of marketing. It reported into the marketing group,

which was very cool. Regardless of who’s at the lead you have the

formulators right next to the marketers sitting behind the glass hearing about

new ideas. In a recipe based business like this, you can really get to creativity

quicker that way. So I always thought that was a nice organizational thing. At

that time I didn’t have that responsibility. It reported separately into the VP of

marketing and as director—but you were all part of the same structure. So I

was very confident. I knew those people well. For this move I went from,

whatever, a group of ten marketers and a PR group and all this responsibility

of people and keys to a brand manage, an associate brand manager. That will

be your new product group and “we want you to work on this.” There was a

little more there around, maybe through this, Ben & Jerry’s will realize that

their only future is with us and we’ll have an opportunity someday to have

that brand. That was not a promise but a hint that if that opened up the

portfolio that’s going to provide for growth for people.

05-00:15:01

Geraci: Well, listening to Gary, to Rick, to Tom, Ben & Jerry’s was what Ben &

Jerry’s was only because of Dreyer’s.

05-00:15:11

Johnston: No question. There’s no question Ben & Jerry’s couldn’t get where they got

without Dreyer’s. Dreyer’s was never acknowledged for its full value by Ben

& Jerry’s. Ben & Jerry’s also, as a marketer watching them, they were

incredibly great and brilliant at what they were doing. They were very savvy

marketers. So there’s a lot of value created there, too. But no question about it.

We were feeling very undervalued for what we had brought, especially if our

orientation was that sales and distribution drive brands. So that’s why I add

the piece I add. There was some really savvy marketing going on from them.

And, frankly, organizational change came at a time when I’m kind of where

do I go. I’m well compensated but I’m actually not tracking with my peer

group. They’ve changed out the VP of marketing. The guy that’s here is a

pretty senior guy. Looks like he’s going to be here a while. I really would love

to continue to advance in this company. Just as a side, around that time, of

course, technology, 1.0, web 1.0 is kind of ramping up and anybody with

brand in their name in the Bay Area was being called for opportunities. In

fact, that was a major issue in trying to hold the group together. We lost a lot

of people who went off to chase the dream, understandably, of be a marketer

for X, Y and Z tech company. Which was disappointing because we didn’t

have a big group and fit was important. But we couldn’t offer what the

prospects of some of those other companies. But I said yes, I’m going to do it.

I remember talking to one of the division managers who called me and said,

“Are you okay with this?” He’s a good friend.

05-00:17:28

Geraci: “Are you sure?” [laughter]

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05-00:17:29

Johnston: [laughter] He’s a good friend. And I just decided there’s nothing more

daunting than walking into a new product arena with a blank sheet of paper in

front of you and saying it’s time to build new products. And so it was kind of

the right time for me to twist the world and try that. And so they didn’t fully

replace my director position. Instead, the group managers there running the

brands now reported to Bob. I still reported to Bob. But on this little project

over here, I was going to work with Gary a little more on the Ben & Jerry’s

strategy. So we went to work and it was one of the most fun couple of years, if

it was that. It was maybe a year. The first part of it was a year. And we went

to work on building new products. So a lot happened during that time. We

built out. I’ll forget a lot of them. But let’s open up the spectrum. Let’s think

about getting into the smoothie business. Let’s think about alliances. Okay. I

can play partner brands, as well.

As a brand team we’d been very effective with the limited editions, I forgot

this part of the story, where we could work with movie properties and Dave

Ritterbush, who was one of our young marketers at that time, did a deal for

the introduction of Godzilla, the movie Godzilla and we made a Godzilla ice

cream with little Godzillas in it. And because of DSD we could start it on the

day the movie—we’d have it on the shelf the day the movie broke. No other

marketer could do that because we could control the supply chain. So it

became this massive promotion. Very successful. We had a great tasting ice

cream with little Godzillas in it. We paid a nominal license fee to put the thing

on it. We had no obligation to advertise it like all the other partners did.

Because we could time it. And the grocers went crazy. You sort of build on

things like that. The logic there was we can be a gateway to ice cream for

others but we want to structure it in a way where we’re the brand builder. So

we started to think a little differently about that.

And my job was to also think about moving up toward super premium. Our

contract with Ben & Jerry’s was very specifically written. A good lesson in

why to write a tight contract. We will not do super premium. Super premium

is defined as products in a pint priced at this price per ounce. Now, in the early

days you couldn’t make anything other than pints, quarts and half gallons

because the dairy laws were such that you had to mimic dairy. Well, in the

nineties a lot of that broke down, and I knew that, and suddenly other sizes

became available. So we started to kick around this idea that maybe we’d

develop super premium quality products but we’d call them premium plus and

they’re in twenty-four ounce containers. So they’re still sized for the super

premium target audience but they operate outside of the contract definition.

But the reality is they’re a wolf in sheep’s clothing. They are super premium

in quality and in experience and that’s how we’ll market them. So that opened

up a path of innovation for our little team and we started to build a sorbet

called Whole Fruit Sorbet that was a higher quality sorbet.

83

Separately, Melanie takes credit for this, and I think that’s where it’s due. She

says, “There’s no good coffee ice cream. Why don’t you talk to Starbucks?”

And so I did the long ball throw of making an overture to Starbucks about

thinking about Starbucks ice cream. That was interesting and it led to

developing a joint venture. But instead of doing it as a partner brand,

somebody else’s brand—I knew we couldn’t do it as a co-brand. We wouldn’t

be able to put Dreyer’s on it. The brand marketer in me says, “I would never

accept that. They’re not—“But we can structure it so that it’s our brand. We

proposed and structured an eighteen year joint venture with Starbucks where

we would make and distribute as a manufacturer and a distributor and we

would jointly market and split that profit. Starbucks Ice Cream. And we

approached the right guy at the right time at Starbucks who is a very creative

guy, who had just done Blue Note Blend, which, of course, being a jazz

musician I loved. And it was the first time they had started to really play with

the brand. Frappuccino is sort of still floating around in the back burners.

05-00:22:58

Geraci: Who is this at Starbucks?

05-00:22:59

Johnston: His name is Harry Roberts. He doesn’t get enough credit in the history of

Starbucks. But a very creative guy. And we hit it off and I made the pitch with

my little container, mocked up container of Starbucks Ice Cream. And we got

into negotiations and he liked it because things cold he was thinking were

great. Different day part, expand the brand. This was before they had their

beans in the grocery store. This is pretty early. This is nineteen,

again, ’93, ’94, somewhere in there.

So I tell this story because this is why it was such an amazing environment.

You learn from all sorts of things. You take the idea of distributed products or

partner brands and twist it around and think about how we might tactically be

able to be an enabler of people to get into ice cream. So I could maybe fast

track new product development that way. So it was a hell of a negotiation and

then Bill Collett—once again, who’s going to negotiate? So here’s Howard

Schultz. He’s met Gary at some thing. But Gary leaned over and told him at

that thing, this is when his company was like 200 million in sales, he says,

“You’re as big as you’re ever going to get.” So Gary’s not going to negotiate

this. And to Gary’s credit, I start to tell him about it, he goes, “Boy, that

sounds like a neat idea. Okay, good luck.” I’d never done a license deal, I had

done a bunch of contracts with agents and stuff, let alone negotiate a joint

venture, let alone with Starbucks and let alone, on their side, it looks I’m

going to be negotiating with basically Howard Schultz.

But great product formulation. They have this extract and so that’s what

they’re interested in. This extract really finally delivers. Instead of freeze

dried coffee, which is the way most coffee ice creams had been done, it really

would deliver the flavor. So we get our hands on that. Scott Backinoff, our

84

great, great creative formulator, puts it together. He brings a product in. It’s

amazing. It’s the best coffee ice cream I’ve ever had. So we come together for

the big pitch and then separately we’re negotiating with the CFO up there,

Mike Casey, on this joint venture. An eighteen-year deal. We wanted that. We

insisted on that. Said, “If this isn’t going to have Dreyer’s on it, I want to

behave as if it’s our own brand. We’re not going to build someone’s equity

and have it pulled out from under us. If you want to get into this,” blah, blah,

blah. And there’s thousands of stories associated with negotiating this. It went

pretty quickly. It almost cratered at one time. But we got in front of the whole

management team up there and Howard Schultz. He writes about it in his

book, as it turns out, a very funny story. Harry shows up wearing the same

shirt that I’m wearing from Nordstrom and we just crack up about this

because now the two guys who are supposed to be negotiating this show up at

the presentation—

05-00:26:27

Geraci: Dressed the same.

05-00:26:27

Johnston: —in Seattle wearing the same thing. And Howard sits at the end and he

goes—this is where, God bless it, sometimes I just am fortunate I didn’t get

thrown out. But he looks at us and he goes, “How do you guys stay so

skinny?” because we’re all ice cream guys. And I look back and I said, “How

come you guys are so calm?” So we all laugh and we’re all wearing the same

shirts. Howard writes about it in his book.

Anyway, we negotiate successfully this eighteen year joint venture to make

and market this ice cream. So that’s one of our new products. I guess it’s for

the record. They want to put it in pints because they think they have a super

premium brand. I can’t let them put it in pints because if they put it in pints I

trigger the Ben & Jerry’s contract. So I do my best to persuade them that

quarts is the way to go, and they do it. So we introduced a line that’s all coffee

segmentation. Five flavors. Java chip is the key. One shelf. Our sales force

goes crazy. They like it. Anybody that knows the Starbucks—but half the

country still hasn’t heard of it yet. They’re just doing the United Airlines deal

with the coffee on the air—so big fun thing. That’s product—I don’t know if

it’s number one or number two.

So we’re playing around with smoothies. And we do a smoothie bar at that

time. We do whole fruit sorbet. We do Starbucks Ice Cream and I have ideas

on about ten others that are interesting concepts to work. One is a Tollhouse

segmentation. Tollhouse Ice Cream with Nestlé and Nestlé turns me down,

which I reminded them of that later. Because I thought the same thing would

work. Take cookie segmentation and do it. So I’m just saying flavor is a

doorway, blah, blah, blah. Let’s find the guy that owns that flavor and bring

that equity in but structure it in a way that it’s our brand. We don’t have to

spend all the brand building money, we enjoy long-term returns.

85

05-00:28:35

Geraci: So this is the era of the Snickers Ice Cream?

05-00:28:36

Johnston: Just before Snickers. Still before Snickers. So everything I’m doing is pushing

up market. We’re doing, excuse me, is pushing up market. So the other one

we do is Godiva. We reach out to Godiva and we build a ten-year long-term

license deal with Godiva to introduce the best chocolate ice cream. So now

our sales group can walk in with a shelf of Godiva. Oh, by the way, that’s in

twelve and a half ounce containers, not sixteen ounce, because it’s ultra

premium. So what the world doesn’t know as much, what I’m trying to do, is

do this: come around Ben & Jerry’s and put plausible super premium pressure.

And then we decide to go right down after it with something that sits right

next door. So we decide that gelato is in fact the equity out there for super

premium ice cream. A standard for super premium ice cream. It’s never been

brought to the US. So now we’re going to build a brand. And so we created a

brand called Portofino Ice Cream and we build in twenty-four ounce

containers a product that I can prove on two of the flavors, each of those

flavors blind, beats Ben & Jerry’s if you just take a spoonful of it. Because it’s

gelato. It’s not all about butter fat and super premium. It’s about the

combination of density and butter fat. And gelato is, in fact, relatively low in

butter fat. It’s at ten percent, the standard, but it’s very heavy. It’s a very

heavy product in terms of weight. Not a lot of air. That’s how we formulate

Portofino. So to the spoon of a super premium consumer, a spoonful, it’s

great. So that we’re going to launch and test market, because this is starting to

build our own brand. So we come with this portfolio, our little new products

team.

And there are a couple others I’m forgetting at the moment. Oh, Lactaid. We

did a deal with Lactaid, thinking the same thing. There’s lactose reduced ice

cream. Let’s get the brand, ten-year deal, blah, blah, blah. So we’re pretty

active. I remember presenting to the board. Gary allows me for the first time

into the board room to present twelve months worth of work on new products.

I guess they weren’t used to seeing that kind of activity. So it was a good

meeting and we were all very excited.

My other job then was to get on a plane with Gary and Rick. Ben & Jerry’s

had a brand new CEO named Bob Holland. First African American. Not

certainly the first in Ben & Jerry’s but one of the more preeminent or

predominant positions for an African American CEO, discovered through the

“Yo, we want to find a new CEO” contest, because he wrote a good poem, he

was really brought to them by a high-quality search firm. Ex-McKinsey guy,

he bonds with Gary. Gary says, “We’re going to have this meeting and I want

you, Tyler, to present what we’re doing and I want you to tell him basically

why we are where we are with this relationship.” So we have this meeting in a

hotel room at the Ritz Carlton in New York on Central Park. Gary’s a great

86

coach with me, just like he was with all the negotiations, but my name was on

that joint venture and he wants me to—now, he’s going to help me. Come

back in and say, “So how are you going to take him through it? How are you

thinking about it?” So, great coaching. A big deal but it’s coming to me again,

just in the sense of that was his MO.

05-00:32:17

Geraci: No pressure, of course.

05-00:32:19

Johnston: No pressure. Go into the meeting and it was unpleasant but it was effective. I

warmed him up and we went through it. And my metaphor was we’re

reserving this room, super-premium non-complete, this suite of rooms in this

hotel for Ben & Jerry’s and they’re just not being occupied. We can’t afford to

sit back and be uncompetitive in this growing space and we think there’s

another segment there called premium plus. And I justified it and I started to

show him the products. He’d already seen Starbucks. (There’s a great story,

by the way, about Starbucks being presented, mentioned to the board when I

wasn’t there for the first time. No, excuse me. The day we announced the deal,

we hadn’t told anybody on the board. I don’t think the board knew and Nestlé

went berserk. They were a minority investor. And none of us knew why they

went crazy. None of us ever thought about we have a minority investor called

Nestlé and, oh, yeah, they are the biggest coffee company in the

world.)[laughter]

05-00:33:26

Geraci: [laughter] Yeah.

05-00:33:27

Johnston: They probably are a little upset at us. That was pretty fun. Okay. So the Ben &

Jerry’s meeting with Bob Holland goes well in the sense that he gets the

message. But it was probably the start of the unraveling of that relationship, of

them also coming to some conclusion that these guys aren’t going to sit back

and just be with us. So we’ll come back to that very shortly.

The net of it was we introduced all those products and Starbucks was very

successful. The sorbet was very successful. Portofino did not get—we got to

where we concluded we were going to regionally expand it but it was very

expensive to build a brand to be a new super premium brand, even though the

product repeat rates were fantastic. So we knew we had a formula that worked

and we knew we had a big branding challenge but we said we were going to

roll it out in half the country. So all of this combined started to bring in this bit

of pressure around Ben & Jerry’s. And I am a little rusty on how we get from

here to there, on them continuing—we continued to make them

uncomfortable, which actually creates opportunity for us. But they don’t take

any drastic action. They just grumble a lot. And we have some success. And

so the core brand team is continuing to do flavors and that kind of thing.

We’re building out a pretty good new product portfolio.

87

They call me down to the office and Rick and Gary decide to promote me.

They said, “We like what you’re doing in new products,” and they made me a

vice president of basically new business. Business development was the title.

And they split for the first time the marketing job at the executive committee

level. So where there was always only one—there had been two sales

executives at one time but there was always only one marketing position—it

became two.

05-00:35:49

Geraci: So marketing had come of its own.

05-00:35:50

Johnston: Yeah. So now we had Bob, who was running the established brands, food

service and all of that, and I had R&D and new products and business

development over here and we sat at the table together.

I may be slightly off on some of the phasing of the Ben & Jerry’s piece,

because it may be that it’s at that time that I had more the strategy meetings on

trying to surround them. But that went on for about a year that way.

Continuing to build new products, et cetera. Then I got a phone call. I was

down at a new product conference and he said, “I’ve decided to pull this all

back together and Bob is leaving and you’re going to be the marketing VP. So

put on your dancing shoes,” or something like that. [laughter] He always

would close with something. So I’m in a pay booth, no cell phone, and I

swallow hard because then that’s a tougher transition. I’d worked well with

Bob and he’s going to leave and it’s all coming back together. The team is

kind of, “Oh, my god.” It’s now a much bigger organization. It’s probably,

with R&D, probably sixty people, sixty-five, something like that. And then we

start that phase. So now I have responsibility and now I’m in, finally in the

room of the executive committee.

That’s around the time that our CFO, Paul Woodland, left. Long-time CFO

and this new guy comes in named Tim Kahn as CFO. And that was fun

because Tim came out of a background that I was familiar with. He used to

work for a guy that was my first boss at General Mills and McKinsey. Oh,

yeah. So Tim and I kind of hit it off. But the business was struggling a bit at

that time. We didn’t know but we’re about to go into this sort of chaos time

with Ben & Jerry’s.

So to sort of fast forward to that, because it comes back to the brand story on

super premium. We pushed Ben & Jerry’s enough to where they concluded

that they were at risk by having that amount of distribution sit with one

company, with us, and so their conclusion for that was to fire us in half of the

country basically. Take away half of the distribution. The irony of that is they

gave it to Häagen Dazs, which was owned at that time by Pillsbury, which had

been become Grand Met.

88

05-00:39:05

Geraci: Which is a—

05-00:39:05

Johnston: Not Nestlé. Yeah, right. Not Nestlé. This is even going to be hard for me to

remember now. So that was a big blow financially because we still made great

margin on that. Instead of sort of putting themselves in play or coming softly

to the table and saying, “Why don’t we work out a deal?” that was their

answer. And so that was a phone call all of us will remember. From my view

on that whole thing. So I get the phone call. It says, “We’re having kind of an

urgent session of the executive committee because Ben & Jerry’s has fired us

in half of the country.” First of all, we have to go public with that, which is

going to crater the stock, which it did. And then, of course, what this means is

now we’re wide open. We’re free of the contract. That’s the other implication.

Can I—

05-00:40:10

Geraci: You want to stop?

05-00:40:11

Johnston: Yeah. I want to talk about the culture and the Grooves and how I saw it work

and move and change and sort of what it meant, because I have my own

version of that story.

05-00:40:30

Geraci: Your own version. That’s going to—

05-00:40:31

Johnston: Yeah. Not of how it happened but of what it meant to me, at least. So,

anyway, the call came, which was probably one of the big crisis moments in

the company. We’ve certainly had a few. We had ammonia leaks where the

plant—all the inventory was lost and we certainly had markets that threw us

out and all that stuff. But this was big because we’re now a public company.

We’re much bigger. The multiple crashes. I remember coming back when we

flew in all the division managers and we had a meeting and I pulled the

marketing team together and we talked and I pulled the new products team

together. I stood up in front of the sales guys and I said, “Here’s what we

have.” I brought out the new products. I said, “We’ll take this out nationally.

We’ll do this.” So we were going to move on Portofino. We were going to

take it out to more markets. That’s what it was. “We’re going to take every

single one of these new products and press them out into full distribution and

that’s what we have for now.” I said, “I don’t know what we’re going to do

yet but I know we’ll solve it and we will get there. I know we can build the

product and we can compete in super premium. So do this for now and we’ll

be back.” It was that kind of thing. Obviously we knew we had to do it fast, as

fast as possible. So we put a team on it. There was a director of marketing on

it and then a guy named Dave Ritterbush again was—at that time I felt was

one of the stronger marketers and a very good rapport with the sales group.

But we went to school on it. And the challenge was we need to be in the super

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premium business with a full fledged national brand as quickly as possible, if

not yesterday.

Okay, so the hardest turf in ice cream. It’s owned by two brands, Häagen Dazs

and Ben & Jerry’s. It’s a narrow turf and we need to get there. So every

project needs a name. So we coined it I-5, Interstate Five, I-5, and the reason

we called it I-5 is we felt we had to play both sides and down the middle. If

Ben & Jerry’s stood for this, okay, chunky funky blah, blah stuff flavor

creativity and Häagen Dazs stood for luxury and smooth, creamy indulgence,

we needed—the good news is I spent a year studying super premium because

my job was to sneak up on super premium. It was just me for six months of

that research with a researcher sitting doing focus groups and talking to super

premium consumers. But I had a library of notes on what I thought the

triggers were. But we have to plan both sides. We can’t just come in with

something that is Rick & Gary’s Ben & Jerry’s fighter. We needed both. So

we called it I-5, which meant we’re going right down the middle and grab

from both sides. And it’s got to be big. It’s got to be big. Has to [clicking

sound].

So we went to work on it and Dave and the team—we had a great team. We

had weekly meetings. Obviously the meetings here involved not only us but

Rick, Gary and Tom. We had to short circuit a whole lot of sequencing and be

with it. And we started on the way you would start at that. We hired a new

agency because our GMO relationship had gotten a little tired and I thought

that they were going to struggle with it because they had struggled a bit with

Portofino. Another great agency in town was Goodby, Jeff Goodby. Again,

my wife knew Jeff really well. Our kids went to school together. We called

Jeff personally. I called Jeff personally and asked him about thinking about

being a second shop, because he’s a mover and shaker at this point, and tell

him about the initiative. And he’s all for it. So we hire a new agency

immediately. We get going on concept work and we immediately start

formulating. And Dave’s direction to the R&D group is isolate a team, put the

best and the brightest on it. I want a full shelf of flavors. We need eighteen

flavors for this introduction. So we were going to come in with at least a full

shelf, if not two, because we got to come in with magnitude and use all the

leverage of DSD to try to displace and bruise Ben & Jerry’s in the process,

because they’re going to be off our trucks. We can now put it in everywhere.

It’s not just half the country. We’re free of that contract because we’re no

longer the exclusive distributor. So that was our quid quo pro.

So it was a fascinating time. It almost seems like a blur. My memory of it is it

was nine months start to finish. It might have been a little quicker than that.

Eighteen flavors. We shut down Portofino. We grabbed all the flavor formulas

that were great and added a little more butter fat to them. Black raspberry

Bacio became a new flavor in what became the Dreamery line. So did the

chocolate flavor. So we grabbed those and started down the path. Dave did a

magnificent job with R&D. Those guys felt liberated. We have the R&D guys

90

in the meetings with Rick and Gary and we’re just letting people go. We know

we’re going to put in four flavors that are going to fail. Put them in to validate

the concept, whatever the concept is. So I’d learned that a little bit from

Starbucks. So that’s what we did. Within that time period, there’s all sorts of

stories about names and where did we go. We did consumer research work.

Consumers built collages about their super premium vision as a consumer and

one of them, I use one. This just totally violates everything that’s academic,

but it’s perfect and it says, “This is what I think about when I think about

super premium.” It’s got a little kid in it. It’s got indulgence, the word

indulgence. It has rich chocolate dripping. It has the word dreams. It has a

little kid chasing an ice cream truck. It has a sexy couple. So it’s the landscape

of Interstate Five. It is indulgence but there’s heritage, there’s a kidlike fun to

it. You see how Ben & Jerry’s worked, you see how Häagen Dazs works in

that and the dream thing caught us. These are always iterative ideation, a long

list.

05-00:47:47

Geraci: Very long.

05-00:47:47

Johnston: All sorts of back and forth. And we came out actually with a brand name

called Dream Cream was the original brand name. Everybody liked it and it

tested well, but as soon as you left the room and the focus group and stood out

behind the one way mirror people started chuckling about the name because it

had a lot of naughty consequences to it. So we ultimately came to Dreamery,

which is meant to basically be about flavor escape, but obviously with an

underpinning of rich and creamy. And we elected to co-brand it and put

Dreyer’s and Edy’s on it, which is very unusual and will get you fired from

certain academic settings. This is Toyota putting Toyota on Lexus. You’re

moving up market. How do you do that? Why do you do that? And we were

doing that because we didn’t think it would get totally in the way. It’s all

about build the brand name Dreamery but it would give us the authenticity at

the street level with the customer because they knew it was coming from

Dreyer’s and Edy’s and that would give us more presence on the shelf and

more activation to the channel and distribution. So give up your marketing

principle for a tactic that doesn’t fit the textbooks.

05-00:49:25

Geraci: Right.

05-00:49:26

Johnston: We have the strength to work with over here. So it’s heavily branded as

Dreamery. Dave does all of this with the team. We’ll get different illustrators.

We’ll have them do fine art kind of fun illustrations of their fantasy of a

flavor. So if I had it in front of you I could take you through the line. But

Coney Island Waffle Cone. Nuts about Malt was one of the flavors. A malted

chocolate nut with this old fashioned town that had a water tower that had

malt on it instead.

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05-00:49:58

Geraci: I can see this is almost a Ben & Jerry naming type.

05-00:50:02

Johnston: Exactly. It’s Ben & Jerry’s naming. It’s more elegant imagery. It certainly

doesn’t have the chunky funky thing behind it and it doesn’t come from a

social mission orientation or the more narrow audience that they were going

after. And meanwhile, we wanted to build the best vanilla. We needed a

vanilla that beat Häagen Dazs. And R&D team did it. They built a vanilla. No,

our Portofino vanilla was damn good. Ground up from that, we knew blind

could equal Häagen Dazs vanilla. And we knew that Black Raspberry Bacio

from Portofino that then became Black Raspberry Avalanche in Dreamery

beat Cherry Garcia without a brand in front of it. You just taste this and taste

that and which one do you prefer, et cetera. So we had formulation down and

there was eighteen flavors. One of them was—I’m forgetting the name of it.

How could I forget that? Hot Chilly Chile. And it literally had Mexican kind

of spice in a chocolate background. That’s one of those that you put in there

because it’s just going to be picked up in the press release. It’s going to

validate the line and it’s going to have a following, unfortunately, about this

big. But we sort of knew that. We go in with eighteen and we probably have

to flip six at the end of the first cycle, first year. So that’s the story.

We tested a lot of different propositions along the way and we argued a lot.

We met three times a week. But it’s all new resources. You felt you had the

entire weight of the organization counting on you and you also had good

advice along the way. We brought Tom and Gary and all those guys into the

room along the way. But we felt we had the chops to do it, so to speak. We

introduced it. Two big meetings nationally. Dave is brilliant at presenting to

the sales group and he used half the meeting to set the stage from the business

case. Here’s what’s happened. Here’s why. Here’s how we think about super

premium. Let’s educate ourselves about super premium because now we’re

going to be selling our own brand here. And then there was an intermission

and when they walked back in the room the room had theater smoke in it. The

backdrop had changed and here was this launch of this line, of eighteen

flavors and brilliant packaging. Frankly, excellent advertising, we thought.

And it was all about news and the tagline of that campaign was, “This could

be a problem,” I think is what it was. And so it’s kind of like evidently it’s not

your normal ice cream, only it’s people discovering this Dreamery and almost

demonstrating addictive kinds of behavior, only done in a fun sort of way. I’d

love to show you all this advertising some day. And that launched it and we

hit it hard.

And, of course, the sales organization, there’s nothing better than having

scorned lovers. They put their heart and soul into building Ben & Jerry’s. Tom

was, “I want to get those guys.” All the materials were there. Budgets didn’t

matter and we came out hard, really hard. In the first couple of years, I think

we did better than expected. We were on a mission to become the number one

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super premium. The reality is it’s extremely hard to do that against a narrow

segment like that. And by the way, we also ramped up Godiva and we ramped

up Starbucks and I think we even brought Starbucks down to pints. Yes, we

did. Because now we could—

05-00:54:14

Geraci: Because you were free to do it at that point.

05-00:54:15

Johnston: Yeah. And so we added that into the line and we brought Frappuccino bars

out. We were just kind of coming at them. And my version of that is the

organization’s success out of desperation with Dreamery totally destabilized

the super premium business and put in motion what then happened, which

ultimately is the end game because that introduction—we got up to a third of

the super premium business. A little less than a third. We spiked higher than

that. Oh, by the way, our profits—that’s the other thing. Our portfolio, super

premium was extremely profitable, even if we were more aggressive on the

price promotion side. Ben & Jerry’s and Häagen Dazs had the market to

themselves, never really had to promote much. We come in, we have the

economic advantage of it’s very incremental to us to be nasty. They, to

respond, have much bigger businesses. Their classic dilemma of you have a

much bigger business. If I now start to promote I just take my margins down

across my whole business because I’ve never done it. And that’s what

happens. And so there’s a price war that breaks out, as well, all of which

works to our advantage because it shakes Häagen Dazs quite a bit within and

it certainly shakes Ben & Jerry’s, as well. So in the end, Dreamery becomes

the wedge. That whole initiative, and I mean the total company initiative of

Dreamery, becomes the wedge that starts to wedge open and break apart the

gravitational stuff that’s holding the category together as far as ownership.

05-00:56:17

Geraci: Yeah. Because the category literally goes up for grabs at that point.

05-00:56:20

Johnston: Yeah, yeah. And Unilever is out of this game. Grand Met and Pillsbury start

to think differently about it. Nestlé decides simultaneously with this that

they’re fed up waiting for us because they’re still on this ten-year standstill

and they thought two years into it Rick and Gary would be ready to play golf

and write books and so they get increasingly frustrated because they’re getting

behind in the ice cream business. So the weirdest combination. It was like

weird dance partners start to emerge and lo and behold we get word from our

route sales organization in New York that there’s going to be an

announcement in a hotel in New York about Häagen Dazs with somebody

maybe from Nestlé. And we know that because they’ve asked us, because

we’re a distributor in New York still, to bring a freezer to this thing. So our

route guys deliver the freezer and they also stay in the room and take notes.

Talk about the inside track. And the announcement is made that a joint

venture is being formed between Nestlé and Häagen Dazs called Ice Cream

93

Partners, to be headquartered in California and to take the license agreement.

To take Häagen Dazs and license it for ninety-nine years to Nestlé and then

Nestlé will put in its bunkers and its snack products and they will jointly build

kind of a DSD super premium in snacks business. So Nestlé is at our board

table. Now they’ve become a—

05-00:58:17

Geraci: A competitor.

05-00:58:18

Johnston: A competitor. A big competitor. But that puts a whole bunch more

destabilization on Ben & Jerry’s, as well. Now they’re being hurt by

Dreamery’s introduction. Häagen Dazs is being hurt by Dreamery’s

introduction. They all want to get back at Dreamery. But in the process, both

their businesses—

05-00:58:42

Geraci: Well, and Nestlé is playing this endgame, so Unilever is going to have to

respond.

05-00:58:45

Johnston: Yeah. And Unilever is sort of out of the whole thing at that point in super

premium. So others, and Tom and Gary can tell a great chapter about

approaching then Ben & Jerry’s on maybe it’s time to think about selling

and/or their realization that they need to do that. At which point I’m in the

moment again of Breyer’s. We now have this brand going called Dreamery.

Well, what would happen if we actually bought Ben & Jerry’s.

05-00:59:17

Geraci: We can stop there.

[End Audio File 5]

[Begin Audio File 6]

06-00:00:00

Geraci: [I am] Vic Geraci. Today's date is Friday, February 25, 2011. This is interview

number two, tape number six. When we finished up we were—just finished up

the Ben & Jerry’s.

06-00:00:18

Johnston: Yes.

06-00:00:18

Geraci: Oh, and he's got notes out now.

06-00:00:19

Johnston: No, this is not for Ben & Jerry's. It's looking at something. Something about

the Grooves. So that basically destabilized the entire structure. And in this

process, and frankly, I sort of left it out, is Pillsbury gets purchased by

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General Mills and so the Häagen Dazs business is now in the hands of General

Mills, which likes it internationally but isn't as happy with it domestically. So

all the legacy Häagen Dazs people are pretty much gone. The ones from

Häagen Dazs are clearly gone. The ones even from Häagen Dazs and

Pillsbury were clearly gone. So you got everybody in kind of different hands.

You have General Mills with Häagen Dazs but now in a joint venture with

Nestlé. Nestlé and General Mills have an affinity and they have joint ventures

overseas.

You got Ben & Jerry's panicked and we start the overtures about having a

discussion. I think in a very savvy way Tom is on point with that. Gary's

involved, Tim is involved and they make their way down the path of really,

not unlike the Breyer's story, getting Ben & Jerry's to the point of virtually

saying yes to an acquisition by Dreyer's with a tremendous amount of

matching of their culture to ours and continuing to fund the social mission and

lots of stuff like that.

This is where Unilever may think that Ben & Jerry's is going to Nestlé,

because some rumors get out there, and gets in the game. It may be here

where that happened more so than in the Breyer's game. But nonetheless,

Unilever comes to the party and once again, in relatively short order—and we

think we have it in the bag. And, frankly, I think we did have it in the bag but

the bag wasn't totally sealed. And Unilever came in and basically took our

play book for what we would do with Ben & Jerry's, matched that and topped

it off with a few several million dollars of added funds and Ben & Jerry's was

sold to Unilever.

At which point, I think once again Nestlé is sitting there with their joint

venture with Häagen Dazs , frustrated with the results and panicked by the

Dreamery introduction and Dreyer's now getting into super premium and

Dreyer's upending the economics of super premium. And while not at a local

level, but at a very senior level, meaning Peter Brabeck, they begin to initiate

some dialogue, which is pretty well—that's all catalogued in the prospectus of

the ultimate transaction. But the dialogue about what would it take to find a

way for Nestlé to pick up Dreyer's. I was very impressed with how it all

started but how the first thing that was put on the table was a very simple

cocktail napkin with some elements that structured a deal with Nestlé such

that we could continue to run the business and the culture would thrive for a

significant number of years. That it wasn't just a price. It was a price but it

was also a price of management of Dreyer's under Nestlé would still operate

with an independent board. Nestlé would only have five seats on that board

out of ten, so they wouldn't have voting control. The chairman of Nestlé

would be our vice chairman for a period of three years. We as a management

team, executive team, would all be under contract for three years because

Nestlé didn’t want to lose that group. And the culture would thrive and the

only position that would change out from a management point of view would

be the CFO. And in the process, we would then integrate all of the Nestlé ice

95

cream business into Dreyer's and Dreyer's would run it. And that was not only

what was put on the table but it was what was in the interest of at least the

senior executives in Switzerland, because they had seen that their experiment

was not going to work. Ice cream partners was not going to make it in DSD. It

wasn't going to make it in super premium only and that should be turned over

to Dreyer's.

Again, from my sort of term of experience, and once again the next six

months seem the most exciting, was the prospect of—somewhat dampened,

somewhat dampened with—it's a bit of a change of the future. But for a long

period of time we get to continue doing this the way we're doing it and yet

now we add a substantial amount of new brands to the portfolio. All the snack

food business from Nestlé and the Häagen Dazs business, which is in deep

trouble and needs to be turned around. So from a marketing department's point

of view, that's pretty exciting. We weren't, because of the legal situation,

allowed to talk to anybody and so it was kind of like get ready but you can't

talk to anybody, you can't see any data other than what you can see as a

competitor until this deal is done. But when that deal is done, all these brands

are going to be in your portfolio and be prepared to—

06-00:07:13

Geraci: To deal with them.

06-00:07:14

Johnston: To kind of do Grand Plan all over again. Which, first and foremost, meant

really thinking about Häagen Dazs and how to fix it. And that was fascinating.

All the negotiations were fascinating to be around those and be a part of it,

which is how it was dealt with because the executive committee really

operated as a whole through all of that. Of course, Tim was on point and Tom,

as well.

06-00:07:48

Geraci: Was there a lot of concern amongst that executive committee about this

transition? Transitions like this can go notoriously wrong.

06-00:08:00

Johnston: Only at one point and that would be the point with the issue we ran into from

a regulatory point of view. So let me just—

06-00:08:11

Geraci: Okay.

06-00:08:11

Johnston: I'll headline that. We went into this fully expecting that this deal would be

approved quickly from the point of view of the federal government because

we felt we competed in a hundred billion dollar category. Big massive thing

out here of all snack food and you could get down into total ice cream and you

could carve it down. But it didn't really cross our minds, seriously, that we

would be caught up in a regulatory issue on this deal. So when the deal was

96

announced, of course, our stock went from somewhere in the thirties to in the

sixties, mid-sixties. And we were, in essence, in play at that point. We had

shown to the world that there was a deal to be done. So all of that felt very

exhilarating until we got into the phase which happened quite quickly, where

the government decided, "No, we're not going to just bless this deal on a thirty

day turnaround. We're going to go to what's called a second request from the

FTC." And a second request is a nice way of saying, "We're going to ask you

every possible question we can think of about why this might be anti-

competitive. We're going to ask for all of your documentation or we'll

subpoena it. And you're going to copy basically everything you've written, all

of your files that are germane to these questions." And the questions were like

ten pages long. Oh, by the way, this is going to take a while. Now, our

window to close this deal was a year so we felt for sure, at the beginning of

that, we thought we're not going to have a problem with the government. Oh,

we were advised this way, as well. You get a lot of advisors in your life going

through these things. But very quickly when the second request came, it was

like, "Oh, wow." And we start now turning over lots of information.

And we're still, quite frankly, quite full of our point of view that this can't

possibly be viewed as anti-competitive. But there were those in the FTC—

now, I have my own version of how this went, which is totally undocumented,

which I will share because I want it to be on the record.

06-00:10:40

Geraci: Good.

06-00:10:42

Johnston: We thought there's no way they'll take the view that the market is anything

less than the total ice cream business, and therefore these two businesses

coming together aren't a material consolidation toward one competitor. But, of

course, they're gathering documents from Nestlé Ice Cream Partners, as well,

and in their files there's a tremendous amount of information about how

damaging Dreamery is and how paranoid they are about the introduction and

what Dreamery might do to them. And so now here's my version of what went

on. Is, first of all, regulatory can be divided down. It's going to go to the

Justice Department or the FTC through some bizarre eenie meenie miny or

something. More technical than that. The Justice Department had done dairy

deals before. But it goes to the FTC.

And I think here's what happened at the FTC. First of all, we were told—and

this is true. This is a fact. There weren't a lot of other deals coming through at

that time, so we heard the term “regulatory capacity,” which is a scary term,

and then here's what I think happened. This is all my own imagination. There

were two or three telecom deals sitting there that are incredibly technical and

boring and maybe there's a financial services deal over here that pertains to

thousands of branch banks and is this going to be anti-competitive. And

somebody walked down the hall, the supervisor walks down the hall, and it's

97

lined with cubicles of young twenty-five to thirty- to forty-year olds, largely

liberal, of which I am, as well, largely liberal Georgetown grads who are

working for the government trying to find out what could be anti-competitive

and this guy goes, "Who wants to work on the ice cream deal?" Okay. And at

that point all these heads come out of the cubicle and go, "I want to work on

an ice cream deal rather than that telecom deal." So that's number one. And

then, describe the deal. Well, this is getting together. This would mean that

Dreamery and Häagen Dazs are together and there's some trucks and stuff

like that. And they went home to their freezers, and they all live in

Georgetown, and they opened their freezer and all that's in their freezer, of

course, is, in the lower section is brie cheese, a bottle of chardonnay, because

they shop every day or go out to dinner, and in the freezer there's a pint of Ben

& Jerry's and a pint of Häagen Dazs . And they go, "Oh, my god. If this

happens, super premium prices could go up because there are three

competitors in super premium: Häagen Dazs , Ben & Jerry's and this new

brand called Dreamery." And if this deal goes through, those three will

become two and three going to two is per se illegal. That's the only technically

correct thing in this last whole spiel I'm giving you is correct. Three to two is

per se illegal in antitrust. "We can't let that happen," because that's all they

knew and they love ice cream and it's not a telecom deal.

We didn't see this. I see it now after the fact. A fervor grew within the FTC

with all these guys going this is a bad deal. This can't happen. And they took

the view that that's the market. The market is super premium ice cream

because that's what was in their freezer. That's my version of it. And we

threw—

06-00:14:11

Geraci: But that's such a small part of the merge.

06-00:14:12

Johnston: Well, it is. It's at that time maybe fifteen—woo-hoo, come on, Tyler—15

percent of the sales but maybe seven percent of the volume. Something like

that. Five or seven percent of the volume. It's this little corner. And the test is

if competitors through this merger, if the market goes from three to two, and

those two could raise their prices by five percent, that's one of the tests they

bring. It's all in the definition of market. Now, one attorney had warned of this

in retrospect. He said, "Beware the pickle story," because in pickles, I guess, a

similar thing happened, where the view was taken that the refrigerated pickles

were different than the pickles in aisle three because they were not

refrigerated, even though the not refrigerated pickles would be taken home,

opened, eaten and put in a refrigerator. They took the view and harassed and

then blocked the deal on that logic. And so that's what happened.

Now, that unfortunately, grew and grew and we're sitting here going, "They're

not going to take that view. They can't possibly take that view." Let's give

them all our documents. What the heck. And then things start to come back

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that they're having problems with this, fueled by distribution. Two route sales

organizations, Häagen Dazs in this case and Dreyer's would get together. So

now you have this market, the brands coming together fueled with a

distribution strength and it grows to a real fervor of we're going to block this

deal. And we aren't budging and that's where we sort of missed it. We thought

there's no way you can do it. We hired econometric folks. We spent millions

and millions of dollars on this, and so did Nestlé, in defense of this deal. The

best and the brightest. Studies. And it did show that the market's here, that

there's a lot of cross-shopping that goes on, and all this stuff, to no avail

because they can hire their own econometric guys and they come up with a

different answer. And the bottom line is they wanted us to come to the table

and say uncle in some way and we weren't going to do it. And what uncle

meant was divest something, or all of it. And we're like, "They can't possibly

mean we got to give up Dreamery in this." And the answer is yeah.

And it turns out the answer is they want all the super premium business we

had and half the distribution assets of the combined company and basically

put somebody else in business. Sell them to some third competitor and put

them in the business. Give them the brands or sell them the brands. Sell them

the distribution assets. And, frankly, where it ultimately got to is, "And also,

give them a head start. Give this third competitor an opportunity to compete

by distributing for that competitor for some period of time."

06-00:17:02

Geraci: That's quite a leg up.

06-00:17:03

Johnston: Yeah. When I go back to the business school and say, "What did I not learn

here?" I didn't learn any of that. And the reality is it's human behavior and you

got to watch if you get too arrogant and kind of just act with disbelief. But

they wanted to get something out of us. And then, because we wouldn't give

something, it got worse and worse.

06-00:17:28

Geraci: Let me ask a question. I'm a little confused in that why was ice cream

considered to be a whole industry when the companies, the corporations, are

dealing more than just ice cream? Why aren't you thrown in the larger, as you

said, snack food category?

06-00:17:42

Johnston: Yeah. Well, that definition, it does come down to the entities being combined.

Was Nestlé Ice Cream company with its joint venture with Häagen Dazs and

its snack foods and its freezers and Dreyer's Grand Ice Cream.

06-00:17:58

Geraci: So it was their division—

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06-00:18:00

Johnston: While we were still thinking of ourselves as a snack food, I could make the

case that there's some substitution that goes on between cake and ice cream

and cookies and ice cream as far as desserts. But it's all about definition of

market. And some version of that goofy scenario I told you, some of that is

probably true around how you view it. It got a start and then we upset some

people because we weren't willing to give—

06-00:18:28

Geraci: Once it took traction it had a life of its own.

06-00:18:30

Johnston: And we were two big companies throwing a lot of money at it and a lot of

experts. Millions and millions of dollars went through this. So this is all to

come back to was there ever a moment, ever a moment, where we were in our

usual wandering into the swamp, will we ever get out of it. It was the moment

that that came to a head and we realized it a little late and we started to talk

about divestiture. But they decided they wanted a big stick to negotiate with

us, the FTC did, and they went down the street and got a vote of five zero

against us from the commissioners. That meant at that point they could, the

FTC could, walk down to federal court and block the deal and put it in court.

Now, we would have won in court but court meant—this is now ten months

later, something like that. Our deal blows up with Nestlé in twelve months.

Does Nestlé still have the same heart for the deal? Do they want to rethink

some of the terms on the cocktail napkin? We are in play and Humpty

Dumpty has at least jumped off the wall. But he won't be put back together

again. And that vote is a public vote and when that happens our stock just

crashes because now it looks like maybe this deal is not going to get

approved.

So Gary has an expression about the joy is in the struggle. I'm sure he's used

that expression. And I was in New York. Because part of my job in our

final—now our attempt to—we got to divest, we had to unwind everything. I

never told the story about M&M Mars and doing a joint venture there but we

did that for candy flavors. But we'll leave that out of it. But we had to go to

New York and tell Godiva that we needed them to undo our deal with us, who

they liked, and rewire it with this brand new competitor called Cool Brands

because we can't keep this brand. But we can't divest it because it's a license

agreement. Excuse me. And we also have to start thinking with these Cool

Brands people about what's the value of Dreamery. We have to sell them

Dreamery.

Well, of course, it's a fire sale of all fire sales. Right? So we're in New York.

And everybody's working far harder. We were working on getting ready for

bringing in all these brands. Dave and I go to New York and we're at the law

offices and we're there for twenty-four hours. Food comes in. And Tom has

been there for twenty-four hours and Tim's been awake for ten days straight.

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Gary's flying in that night because now the vote has gone five-oh against us

and they're about to go to Washington to try to pry that door open again. Gary

walks into the hotel and I see him. I've been up all night. So has everybody

else—and I said, "Gary, you know that ‘joy is in the struggle’ thing?" He

goes, "Yup." And I said, "We could use a little of the joy right now because

right now it's a lot of struggle."

06-00:21:51

Geraci: Struggle.

06-00:21:52

Johnston: And he hadn’t heard the full case at that point. To his credit—once again, Tim

was running this deal, Tom was involved in it. I don't think he knew quite how

dire it was at that point. But at that point we faced two paths: is the company

goes on, we integrate, we have all these brands, we lead it for four more years,

there's an effective transition of our leaders and we all enjoy the fruits of that

deal. The other path is we put it in play, the deal crashes, our stock crashes,

we're bought by somebody ugly, it's never at that value and we're sued by

every frigging shareholder, as a company and as a team of managers. Our

team will cry and we're probably all out of a job. So that was pretty much the

moment.

06-00:22:53

Geraci: Those are hair-raising moments.

06-00:22:54

Johnston: Yeah. But we came through it. But we had to divest virtually everything in

super premium. So we sold Dreamery for cents on the dollar. We did have to

sell all the distribution assets. We had to entangle ourselves with this

company, Cool Brands, for a long period of time. Tom and our sales

organization had to bear the burden of doing that. We had to unwind Godiva.

They held us up for money. They said, "Oh, yeah, I guess we'll do it. We don't

want to do it but we'll do it if you pay us this amount of money." Everybody

knows there's gazillions of dollars at play here. It's a $3.2 billion deal about to

collapse. So they want their pound of flesh. And then Mars tells us

everything's fine and then went behind our backs and went to the FTC and

complained that they were worried, they wanted out of our joint venture. So

even though they weren't a super premium brand, they just took the

opportunity at that time to unwind their deal to eventually give it to Unilever.

So today Starbucks is on the market but Unilever has it. M&M Mars is on the

market but Unilever has it. Godiva left the market. They tried to work with

Cool Brands but it didn't work. And Cool Brands lasted maybe three years and

blew up because it was uneconomic and they weren't going to be able to

compete. Your tax dollars at work. So that's the story.

We got through it. The silver lining there from a marketer's point of view is

the portfolio was significantly simplified. We lost all those brands. We

inherited good brands on the snack food side from Nestlé and we inherited a

101

very damaged Häagen Dazs , but we got to go to work on it. We repositioned

that within the first year, less than that. I remember the presentation to Peter

Brabeck when we made the case of how we were going to reposition it. We

gave that assignment to Goodby, our agency that had done Dreamery, and

they hit it out of the ballpark as to what should this brand stand for. That's its

own little business case in and of itself. Could be taught for years on

repositioning. And Peter Brabeck just said, "Yeah, that's it." He was so

impressed.

The first years were fantastic because we could kind of do no wrong. But then

the team started—things changed. Rick didn't go forward with the deal. Didn't

stay with the company.

06-00:25:27

Geraci: Stay with the company.

06-00:25:28

Johnston: He made that clear when we announced the deal. So that certainly changes

things. Some personnel change. Some people left because it was time to cash

out and leave. But for the most part, we had a three-year period which then

became a four year run. And it's still a fantastic board of directors and a lot of

independents. And we got to enjoy a world stage for marketing the products

and technology and the like. And I would have liked to have placed more

people out in the Nestlé organization. We have some very good success

stories there. But Nestlé also came to grips with the fact that the margins in

the ice cream business are really hard and worldwide they had trouble with it

and there's struggle going on there today. But people ask me about that in

retrospect and I say, "Look, we sold the company in 2002. We spent a year

fighting the government, so the deal started in 2003 and most of us left." I

might have been almost the last one out, not quite, in 2008 or '09. In the world

of those kinds of things, that's a pretty good—

06-00:26:49

Geraci: That's a long stay.

06-00:26:51

Johnston: That's a pretty good transition. And we were able to see Gary out the door in

style, as we should have, in all of that. So a pretty good ending to that part of

the story. A fascinating ride. Just amazing ride.

06-00:27:15

Geraci: Well, to put it in Rick's words, "Good lap around the track."

06-00:27:20

Johnston: Good lap around the track. A very good lap around the track. I guess it also

keeps on going. In that sense, I've jokingly said I think what I learned, if I

were to go just be a full-time professor of marketing, I learned enough in

those twenty years and was challenged by enough different situations that it

could fill a full course load and all be about ice cream. I don't know if

102

anybody would want to do that, but it could be. We went through chapter after

chapter after chapter of growth and challenge. And the network is very strong.

The alumni network is very strong. I have good friends. Friends, mentors,

teachers, associates are all still very important in my life, and will be. So that

goes on and I know not only dozens, but multiple dozens of people who

would say the same thing.

06-00:28:24

Geraci: So you left then in 2000—

06-00:28:26

Johnston: Officially in 2008.

06-00:28:28

Geraci: In '08?

06-00:28:30

Johnston: With an agreement to consult and advise Tim—

06-00:28:34

Geraci: That's what I was just going to ask.

06-00:28:35

Johnston: —for about a year. It was actually an agreement for a year and a half but Tim

stayed on in position just—so I certainly stayed all the way through Gary's

exit. Shortly after that, then I told Tim I was going to—there were many

things I wanted to do.

06-00:28:55

Geraci: This is Tim Kahn?

06-00:28:56

Johnston: Yeah. One of which was I had a really strong team by that point of very, very

capable senior executives in marketing and I wanted them to be at the table.

So Tim and I worked on some things and he refashioned how he thought

about the executive committee to start to accommodate some of those folks.

And in that process I said that I would do anything. If you want me to leave,

I'll do that. If you want me to step aside or take different responsibilities, I'm

fine with that. I want these guys to have that chance. The reality is that the two

key ones, one of them we did place in Nestlé in Switzerland. She's doing

fantastic. The other two—

06-00:29:43

Geraci: Who is that?

06-00:29:44

Johnston: Jill Shoemaker. The other two, Dave Ritterbush and Deb Crew, politely

declined the invitation—my analogy would be I invited them to the party, they

came to the dinner table and decided the menu wasn't really for them at that

point. It was going to be different. It was going to then be wired in as a

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division of Nestlé USA and to where they were personally, in their

aspirations, it just wasn’t going to be for them. And so—

06-00:30:13

Geraci: And where did the two of them—

06-00:30:14

Johnston: They went to different opportunities. One went to M&M Mars. Deb did. I

don't think she's still there. And Dave went to Red Bull to run half of the

country for Red Bull and then he left that and he's now the CEO of a company

that I'm on the board of called Joint Juice. So I still see Dave and we got part

of the band back together. There's a young marketer there who's a former

Dreyer's person, as well. So, like I said, the network is still very strong. But

when that didn't come to fruition—and you sort of understand why, but one of

your roles is to provide for succession and provide the opportunity. And in

doing that, it didn't come to fruition. That they weren't going to step in and do

that as part of Tim's organization going forward, both within a relatively short

period of time. I felt at that point I either need to sign up for five more years to

rebuild it or it's time to make the transition. So I told Tim that and we talked

about it and we agreed that if I can find an internal candidate, that transition

would happen sooner rather than later, but I'd be willing to stay for whatever,

a year or two if we need to go outside. We ended up hiring and bringing

Rhonda Ramlo into that position from Tom's organization. And so with that,

and making an internal transition, I stepped aside and entered into kind of a

consulting phase. And that lasted as long as Tim was there.

06-00:31:55

Geraci: Tim must have had a very difficult job transitioning.

06-00:31:59

Johnston: Yeah, yeah. In a whole bunch of ways. First of all, it's just not the same

around the table. Secondly, Nestlé's going to put a whole different twist on it

at that point because the guy they did the deal with is not—

06-00:32:14

Geraci: He's walking between the two.

06-00:32:14

Johnston: Right. And in wiring the company into Nestlé USA. We made what I thought

was a strong case for keep it independent. Keep it reporting to Switzerland,

because you are decentralized around the world. But they wanted to wire it

into Nestlé USA. At that point when it became just a large division of a US

package goods company, more change was going to come and change that

was going to be a bit more difficult. And Tim had to kind of be at the front

end of that, as well. But I saw him two nights ago for dinner. The network is

alive and well.

06-00:32:59

Geraci: I have his interview on Monday.

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06-00:33:01

Johnston: Yeah. It'll be good. It'll be a good one. So what I wanted to kind of get in the

record was just a meandering reflection about the Grooves as I watched it over

the years. When I would recruit people, what you would find is—people were

seeing the Grooves out there when we finally got to the world of the web. It

was phenomenal. People would come and go, "This is what I've been looking

for." And so I'd always try to twist that around and start the conversation by

saying, "Yeah, but they're just a bunch of stolen concepts." And they are. The

stories are amazing about that. I thought that the word Groove started with a

hiking analogy that Rick used from the Boy Scouts about following the path.

He's disclaimed that since then and talks about it more as sort of proven

practices, or you'll know when you're in the Groove. Clearly what it never was

intended to be was Groovy, especially if you knew Rick and Gary, who I

accused at one time of only listening to Peter, Paul and Mary records or the

Kingston Trio for years when they were in college, because they seem to have

missed the entire free speech movement while they were at Cal. You can see I

was the only liberal on—

06-00:34:27

Geraci: I was going to say—

06-00:34:28

Johnston: —the executive committee for a long time. There were other closet liberals.

But where was I? But it was. It was about proven practices. And so when I

first got there, it didn't need to be written down. You just observed it. you saw

what worked and what didn't work. And there were some terms for it. And

you saw that it worked back in the restaurant, when you met the restaurant

folk and you go, "Oh, this is just about imprinting values that seem to have

worked." And then when I got there, there were names starting to be attached

to some of the Grooves, but they were stolen concepts. That's what's so fun

about it. So if I go to a class and talk about it, I say, "Look, everybody has a

brochure with values in it. I have one from Kraft. I can tell you all those. Mars

had them and they had them printed on their cards." It doesn't matter.

Everyone's going to have it written down. So what do they really mean and

how are they really inculcated, to use that term? And that comes with a lot of

blood, sweat and tears and a lot of modeling of that over the time.

But just to take a couple of them. The upside down organization is a

Nordstrom's concept and it came from Nordstrom. This was before I got to the

company but I heard the story. That one of the Nordstrom family made a

presentation at the sales meeting and talked about the upside down

organization and that fit. I had a suit salesmen over in San Francisco

Nordstrom. I got to know him over the years and at one point I made some

comment about Dreyer's. I just mentioned upside-down organization. He goes,

"Hey, that's a Nordstrom value." I said, "I know. We stole it." [laughter]

06-00:36:13

Geraci: We stole it. [laughter]

105

06-00:36:15

Johnston: And ready, fire, aim was out there in the Tom Peters books at that time.

06-00:36:20

Geraci: That's In Search for Excellence?

06-00:36:23

Johnston: In Search for Excellence. And Hoopla also. I can't remember where that came.

But that came into the company through some other presentation like that. So

those were brands, brand names, that were attached to deep valleys of

practices that had gone on and on and stood the test of time. Managers Should

Manage—that was one of the Grooves. Managers Should Manage. Oh, my

god, I can't remember. It changed names. At some point it changed names.

But the whole point was this is your responsibility as a manager to deal with

your people manage—people issues. We were proud of the fact we never had

a human resource department, it's nothing against human resources per se. It's

just that's not where the responsibilities should lie. The flaw in having big

human resources departments is then everybody thinks that's where problems

need to be solved. So I have a tough case with an employee, I should send him

to human resources to really fire him. No, you got to deal with it yourself.

06-00:37:40

Geraci: Right.

06-00:37:41

Johnston: So stolen concepts. Stolen brand names to put on values that had stood the test

of time and added, a couple of them added over time. And I watched us go

through phases where some were very misunderstood. Ownership. Ownership

would just as easily be thrown back in your face when you maybe disagreed

with someone in the division who wanted to do a program that you didn't

think was right. It was like, "Well, wait a minute. I have ownership of this."

Well, let's just talk about what ownership is. Ownership isn't that." What

ownership is is you become known for something because you excel at it and

it doesn't need to be branded on you. People know it and talk about it and it's

celebrated through hoopla. And please find those things for yourself here at

this company. It's a whole different thing than I own this, the decision.

So we had many, many meetings where these things would have to be hashed

out, either in formal training or just through informal things. If someone raised

it and used it inappropriately, I saw leaders in the company take people to task

and say, "No, that's not really what that means."

06-00:39:00

Geraci: But I think it's important to understand here that you were discussing these

things—

06-00:39:04

Johnston: All the time.

106

06-00:39:04

Geraci: —openly all the time. How many corporations do that? They may have it

written down in their brochure but do they discuss it?

06-00:39:13

Johnston: Yeah. And it was serious and that's the other thing you say. If it's a brochure

that everyone has in their drawer, that's one thing. But if you're serious about

it, you talk about it a lot. If you're serious about it, you hold it up from time to

time and say, "Does it still work?" Because it is like a constitution and it does

need to be amended, like a good founding father constitution as the country

develops and as the company develops. So what was ready, fire, aim is very

different when you're a billion and a half in fifty markets across the country

and you're spending a million dollars to just even get a product from a concept

point to an introduction. Ready, fire, aim takes on a little different

consequence. So you do have to have that dialogue. And that was constant and

it was formalized in some ways. I think some of the greatest work, though,

was the dissemination of Grooves. Happened through Grooves taskforces that

were locally based. So every center, every sales office, every plant had a

Grooves taskforce made up of people that cut across all ranks of management

and their job was to train. Their job was to inculcate the Grooves. Their job

was to be a sounding board. Their job was to imprint and make sure it's being

modeled. And those would be people that the management would meet with

when they travel. Absolutely meet with the Grooves taskforce and find out

what's going on. But even that very thing was disseminated in an upside down

organization sort of way as opposed to a centralized training department.

Eventually we built a leadership department.

06-00:41:04

Geraci: And you do have training programs in the Grooves?

06-00:41:07

Johnston: Yes, yes.

06-00:41:08

Geraci: For all employees?

06-00:41:09

Johnston: Right, right. And training, I think it started—gosh, Tyler, you're getting old. It

was either started as Learn, Learn, Learn or Train, Train, rain. I think it started

as Learn, Learn, Learn because it wasn't even used as training because it was

really—again, the onus is on you to reach out and find where do you want to

learn? Get involved, go out. There is a taskforce. There was always an

invitation and an expectation that this isn't just given to you. You have to

build this yourself and build your own version of it. So it's a story of that kind

of culture.

I said this once and I'll say it again. It was always explained in public as not

only just good but good for business. It wasn't just to win a sociology award

or a human resources award. It was felt to be very good business, such that

107

most of us would say that—and Gary would say that to me. That if you left

here, and we all got together, and a group of us got together, and you went

into an entirely different business, it should fit because it's probably good for

business. Now, it may not be the business that's amplified by DSD the same

way but—and that's what you also see. Is when anybody left, anybody left—

and I lost a ton of people during the technology time. And that's what they'd

miss, is the culture, and they'd come back and say, "I really miss the Grooves.

I miss operating in that environment." And then you'd have people leave and

then the first thing they'd want from you was, "Please send me five Grooves

brochures because I've got to convince my management that we need to do it

different here." People go out and would try to build that same culture.

06-00:43:05

Geraci: Have you seen examples of people going out and building that?

06-00:43:07

Johnston: Yeah, yes. And I've not seen it branded as Grooves but I personally have

disseminated it to, god, ten or twelve people who are senior executives who

then wanted to go in and use it as a template to reorient a particular culture

they had in a company.

06-00:43:27

Geraci: Any companies in particular or—

06-00:43:29

Johnston: Well, it would be where these folk went. So one was, believe it or not, at

Amazon. I don't think that worked as well. There's a good friend of mine who

wanted to institute it, tried to institute it in a couple of natural food companies

out of Boulder. I can't think of big ones because most of these people are

going to smaller enterprises. But there probably are examples of that, of folks

that have gone to bigger places, more established places, and tried it. So it was

something that should stand the test of time because it's kind of commonsense.

It wasn't mystical. It was what it was because we worked at it really hard. And

in Gary's point of view, he measured it. You can argue should you send out

the same survey every year and can you highly quantify it? I could probably

push at him the same way he pushed at me trying to quantify some of the

marketing stuff. But the main point was to have a very high bar. If you had

Grooves issues, you had issues in your performance. So that was understood

that it was part of the performance expectation.

06-00:44:50

Geraci: But that was a very clear expectation.

06-00:44:52

Johnston: Yeah.

108

06-00:44:54

Geraci: You talk about the commonsense things. Having expectations that people

understand and they know where the bar is and they know what they need to

do almost in a sense becomes liberating.

06-00:45:10

Johnston: Yeah. And you see that over and over again. I can take examples of executives

that did go on to do what they're doing today because they had that

opportunity. And we're able to have substantial responsibility, and therefore

take a big chance and be in an environment where that's kind of trusted, where

it is trusted, not kind of trusted, and give them the confidence to then do that

again and again and go off and be extremely successful. And so one of the

comments I did make to the Nestlé board, and I was just grabbing the notes on

it to see if I had any insights that jumped out of it. Because I was trying to

make the case to the Nestlé board that from a governance point of view, as we

transitioned from fifty/fifty to where they were going to have more control, to

continue to allow for decentralized “you decide” culture. Knowing that that

scared them in many ways. So I tried to explain that greater innovation will

come from "you decide." You're going to have more people thinking about it

and you'll get more decisions and by a batting average you'll get a more likely

hit on a home run. It creates an amazing amount of trust, that statement. We've

talked already about how it activates you. You hold yourself to a higher

standard, okay. But it also creates a sublevel of trust that allows you to take

bigger chances. So if you know that there's some net underneath you you'll

aim higher. And if you have been put in a position where somebody says,

"You decide," you'll aim higher because you'll put your own standard as the

mark. I tried to put it in that context for them because innovation was key to

every big company and Nestlé always wonders why they never—how do we

get bigger innovation? And if I talk to students, I'll tell them that every

company says at some point they'll have the speech about fail forward. You'll

hear it all the time. It's okay to fail forward. And then you go to the lunchroom

and somebody says, "Whatever happened to Johnny? Has anybody seen

Johnny?"

06-00:48:09

Geraci: He failed forward.

06-00:48:09

Johnston: Yeah. "Didn't Johnny try that thing? And Johnny's not here." And so that's

what becomes the culture, which is “don't reach too far out and take a chance

and have a failure.” So I'm proud to look back on the marketing group and

everybody that contributed to it, there were dozens of them in that timeframe,

and say—it's a batting average—and on balance the batting average was pretty

good. We were fortunate to be in an environment where we could trip up

occasionally and have the trust that if we learned from that and reapplied it

more smartly, we weren't going to get hung by it. And that kept a very

innovative spirit going and that's what most larger organizations lose, and then

it becomes about manage for the increment. Manage for predictable three

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percent growth or four percent growth. Whatever you do, make your number.

And that's an appropriate way to manage but it isn't going to get at innovation

because people aren't going to feel comfortable to step outside of that.

06-00:49:24

Geraci: I think what you've just defined right there is really the essence of what this

Dreyer's experience is all about. It's depending on people to think outside the

box, to be a little bit more of a risk taker, to have a worth ethic and to enjoy

people.

06-00:49:47

Johnston: Yeah, yeah.

06-00:49:49

Geraci: And that's not necessarily what large corporations ask of their employees.

06-00:49:53

Johnston: And to be associated with your work, as well. It comes back to that. Have the

open territory to feel like you can see your ideas come to life. If you achieve

and if some of them work, that becomes part of what you own as your

success. And celebration of that is key. The magic of hoopla is incredible.

You'll see lots of pictures of awards being given, and that's great hoopla. But

the main part of that is those aren't awards that happen once every five years.

It wasn't the chairman's award. It was little things. It was important

incremental achievements that were being acknowledged with some plaque

that was customized to that person in some way. Sometimes it was just funny

because it matched that person. But more often than not, it was really

attributed to that event. And that was the essence of how, when you saw the

real masters of the hoopla at Dreyer's, it was don't save it up for the big stuff.

Dole it out along the way appropriately. Gather people together in front of

their peers, acknowledge what they achieved and you'll see beaming from ear

to ear. It will fuel that much more achievement. We had to work at that over

time because the bigger you get the more you get into big theater events and

big awards and you also have to think about when do you do when things

aren't working? What if you don't make the number as a company? Should

you still have hoopla? Should you still have a gathering to celebrate

something? And you see that sometimes in other companies where maybe we

shouldn't do this because—but the reality is in any series of events, in any

batting average kind of thing, which all this stuff is, there's opportunities to—

06-00:52:14

Geraci: Something was done right—

06-00:52:14

Johnston: —acknowledge it. Right.

06-00:52:15

Geraci: —somewhere.

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06-00:52:17

Johnston: And so find that and keep it going, otherwise you're going to save it up for a

rainy day and it'll lose 90 percent of its value of kind of keeping the

organization fired up. So yeah, it goes back to when somebody tells you,

"Hey, why should I give you the keys to the car or keys to the brand?" you

immediately gulp. Or later in life, when you're up against a big debate with

Gary about something and he goes, "You decide," you gulp, you get anxious,

your palms get a little sweaty because it's kind of like, "Are you kidding me?

It's really my call. If it's my call, I'm going to be damn sure in how I'm

thinking about this," and the other thing you look for is what happens if I fail.

Is there a Johnny story here? And if there isn't, then you go take the chance.

And that's where I think great leaps come and that's why this was a growth

company where people were constantly feeling like they had a safe

environment to experiment and a safe environment to push and try something

a little bit bolder. More often than not, how they were being dealt with by

their superior was a stream of, "It's your call. You decide. I won't bet against

you." You start to turn around and do that to the people that work with you. It

spreads pretty quickly. A lot of great growth can come from that. So it

certainly wasn't all perfect but it's pretty close to it.

06-00:54:10

Geraci: I was going to say name anything that is perfect. That would be kind of the

next question. Is there anything else within this story that you'd like to—

06-00:54:26

Johnston: I guess maybe it's somewhat of a postscript, because the important point that

should also be made is this company, in at least the timeframe I'm talking

about, grew from, I don't know, 900 employees to 7,000. And we'll use the

term Rick and Gary a lot as we talk, especially those of us who had the

fortune of being very close in Oakland headquarters and stuff like that. But the

reality is that their personality and those values got spread so far that it would

work without them because it's the manager you're closest to. I'm out in

Atlanta and if that person is doing that same thing, that's where the culture

lives. It lives out and it's dispersed and it can stand the test of time. It's great. I

talked to Howard Schultz about this because early on they had some name for

these forums where they'd bring all the partners for Starbucks together and

they could still get them all in one place. Can you imagine that today? What

do you do when you magnify that and grow? Yeah, there was a time that, after

the big sales meeting, the executive committee would get on the road and we'd

go do twenty-five mini-rallies around the country and they'd all have Q&A.

You'd meet as many people as you possibly could. But eventually that became

too much. So you need to get out of the thinking that it has to come from one

source and get into it's a distributed model, so to speak. The culture, if it's

inculcated broadly enough, will live and will continue to grow and it will

succeed.

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06-00:56:32

Geraci: But that also allows that leadership is willing to empower a lot of people to

help distribute that.

06-00:56:40

Johnston: Yeah. So while in many ways you can say, "Oh, it's a cult of personality

because names come up often," if you're getting this story from somebody

who grew up in middle management in Edy's in a region office, they're going

to tell a similar set of stories but the name Rick and Gary are not going to be

in there as often. There are many people that didn't know who Rick was once

the Nestlé deal happened because he was out the door at that point. Yet the

values are absolutely strong and widely distributed. So it can stand the test of

time and it can stand the organizational change that goes on. It doesn’t have to

be just now it's a bunch of speeches and film that's coming from one

leadership team out to the rest of the organization. And likewise, it therefore

takes a long time for it to change. That's the positive. If it's a great culture,

that's the positive. It'll take a long time for it to materially decay. I guess that's

the end.

06-00:58:09

Geraci: It sounds like it was a good ride.

06-00:58:10

Johnston: It was a hell of a ride. It was a good ride. It was a good ride. The ride's not

over. Rick very early was in an advertisement. They actually used him in

advertising. I used him once in advertising. That was interesting, too, because

the culture was so strong the agencies would want to put it into the

advertising. But one of the early quotes was when you live—and what did he

say? It was a commercial that was about ice cream being sort of magical and

Dreyer's is kind of magical. This is right when I got there. And he said

something like, "If you live eleven minutes from work and work with the

people that I do, I guess it's magic after all," or something. So my ending

quote when I retired to Gary and Rick was to quote Sly Stone and say, "Thank

you for letting me be myself."

06-00:58:59

Geraci: [laughter] I think that's great for you. And with that, I think we can end.

Thank you very much.

06-00:59:05

Johnston: Okay. Alright. Thank you.

[End of Interview]