Here's How Newell Brands Made Itself Into a Powerhouse
CEO Michael Polk shares the company’s journey.
Mike, a lot of people don't know the name Newell or Jarden, but when you tell them about some of the famous brands you have, like Parker Pens, and Sharpie, Elmer's Glue, Mr. Coffee, they get it. So you have now, through this merger, more than 160 brands under one roof. How are you going to make all this work? You've got to make priorities, take choices on what your priorities for growth are going to be. And we've gone through a process over the summer to make our portfolio choices, the priorities that are going to warrant disproportionate investment-- our writing business, our baby gear business, Yankee Candle-- unbelievable assets to leverage. These will be the big places to place investment bets. Well, in your five years that you've been CEO of Newell, you have a pretty good track record for consolidation and unloading unprofitable product lines. It would seem obvious that you're going to have to go through that process now, with this huge merger. How do you decide which areas to keep and which products to get out of? We look at the categories that have the greatest potential globally, a category like writing, which is right on trend-- particularly in the emerging markets, where people are moving out of poverty into the middle class, and what they're looking for out of life is to achieve more. And so a category like writing instruments is right in the middle of that macro trend. And so these judgments about the relative strengths of categories, our ability to win in them, the brand positioning that we have, the market share position we have-- these are the variables that go into determining whether a category is of interest to us, or maybe not as much a strategic interest to us. You talk a lot about innovation driving growth, but how much more innovative can you get with some of your product lines-- whether it's a baseball glove, or coffee machines? The pen you hold in your hand right now is a really interesting example. It is a gel pen. It competes with a couple of other companies' products. What's different about that product is that the ink in that gel print dries three times faster than the nearest leading competitor. And why is that important? Because gel pen inks smear. So by drawing faster and creating an ink system that does that, you create a point of difference versus the competition, that you can charge for, that people value. And that's how innovation in even some of the most everyday categories can create big value. What about changes in how and where you sell your products? You supply Walmart, but also Amazon. So where does the bulk of your business come from? Is it the online platform or is it in the stores? The largest component of our revenue stream is in traditional brick-and-mortar environments. So our philosophy is we want to reach consumers where they shop. Today, the vast majority of them are shopping in bricks-and-mortar environments, but increasingly consumers moving to ease their shopping experience by purchasing online. Our business model needs to adapt to that reality. Our market share in the growing channel, in the e-commerce channels, needs to be at least as strong as it is in the bricks-and-mortar environment. There's no question that the way we shop now has changed so dramatically over the past couple of years, so as you look out over the next few years, what do you think is going to be the winning business model for your business? I think it'll be a blend of both, but we will disproportionately invest to capture the online opportunity, because that's where consumers are going. So I'd say, today, we're probably about 12%, 13% of our global revenue is e-commerce space. And five years from now, I'm sure it'll be closer to 20%. But if you do the math, the vast majority is still in traditional bricks-and-mortar.