Jess (00:16)
Welcome everybody to the Dig In Podcast. I'm Jess Getteke and I am thrilled to be joined today by Paul Dlarzak.

He's president of Nestle Ice Cream Canada and has had a long storied career at Nestle that we can't wait to dig into. So Paul, welcome. Thanks so much for joining us.

Paul De Larzac (00:32)
Now, thanks very much for having me, Jess.

Jess (00:34)
So I love to start with an impromptu question that you haven't seen before. So I'm going to throw this one at you. If you could start a charity, what would it be?

Paul De Larzac (00:42)
my gosh. You know, I think it would be something to do with the oceans because I'm a scuba diver and I enjoy spearfishing. So I'm pretty tuned into ocean conservation. And so and I also think it's one of these things that will outlive me and outlive future generations. And it's just such an amazing ecosystem that that really we we need to do more to protect it. And unfortunately, with global warming and the warming water temperatures, there's a lot of coral loss. There's a lot

Jess (00:54)
Hmm?

Paul De Larzac (01:12)
of species lost and I think that if we don't get, sadly if we don't get on top of it now, we're going to lose a lot of that biodiversity. So yeah, for sure something around oceans would be what I would do.

Jess (01:25)
Yeah.

that's really special on something that you're so tied to, you know, emotionally and probably spiritually and physically because you're out there in the water. So excellent. So tell us a little bit about your background and your current role at Nestle.

Paul De Larzac (01:37)
Yeah, sure. So I actually, my very first internship during business school is at Heinz. So it was my first exposure to the consumer packaged goods and it was my first exposure to food. And I absolutely loved that experience. And I've stayed in food my entire career. I started straight out of business school at Kraft Foods.

and spent four years there working on great products like Philadelphia cream cheese. And then after the Nabisco acquisition, I worked on the Del Monte portfolio, which was a great brand, fun brand to work on. And then in 2003, I joined Nestle and I joined Nestle in ice cream and in Canada. And I worked as a brand manager in that business. And then I got the opportunity to work in our confectionery division in Australia. So I moved to Australia for a few years, was there for about three and a half.

and then moved back to Canada and then had successive roles

marketing and then I also did a number of cross-functional

roles.

also worked in sales leading some of our big customers. I managed Walmart, Costco, and Amazon, which was really fun because it was the early days of Amazon where nobody really knew how big it could be in food. And it was a really interesting time of growth and development of that customer.

And then I made the jump to general management roles and I managed our premium waters business, which includes Perrier and San Pellegrino. And then I moved into managing our ice cream division here in Canada.

Jess (03:09)
Yeah, gosh, so that is a really interesting journey throughout Nestle. And I'm just reflecting on you get to be in Australia working on confections. That's kind of a nice combination, I think, you

Paul De Larzac (03:20)
Yeah, definitely. you

know, being in the northeast of North America, I definitely miss that nice hot weather that Sydney had to offer.

Jess (03:29)
Yeah, yeah,

not a bad place to spend some time. Well, let's dig in. We'd love to get into a story that you'll share because our listeners, they really do crave inspiration from other leaders. And one of the best ways to inspire is to tell a story. And you have a really interesting story about the launch of For Real in Canada, where there were a multitude of important lessons, as I understand. So first, tell us about the For Real proposition and what really inspired that launch in Canada.

Paul De Larzac (03:59)
Yeah, for sure. So

for

proposition, as maybe your audience knows, is sort of the self-serve McFlurry or Dairy Queen Blizzard type of product that you can find in convenience stores in the US.

I was in the ice cream division. was a director at the time and we knew that there was this cool innovation in the US and we wanted to bring it up into Canada. We knew also that for real had plans to enter Canada. And so we had a bit of a timeline about entering the market, being first to market.

And so, you know, it was one of those elephants can dance kind of situations where our normal lead times wouldn't get us the competitive position that we wanted to. So we really had to accelerate everything, the development of the product, the development of the machines, the relationships with a customer. And so I worked with a great brand manager, senior brand manager at the time, Jackie Brenkel.

And we parallel pathed the machine development,

with Vitamix in the US actually, to develop this self-serve machine that could be installed in convenience store locations. And then working with our R &D group to develop the product, and then working with a convenience partner to identify the right geographies with the right shopper profile and the right traffic to make this work.

So within about eight months, we developed the whole thing and we're ready for a rollout. And we rolled out, I believe it was about five to six hundred locations at the time, which, you know, in the Canadian landscape, was big enough to cover sort of our two most populous provinces in Ontario and Quebec.

Jess (05:37)
So gosh, that's a huge CapEx investment. There's a lot from your distribution strategy. What are some of the core decisions you made along your go-to-market path?

Paul De Larzac (05:48)
Yeah, I think you pick up on a really interesting point there and that is the CAPEX portion of it. not only, know, the way that we normally work is we provide the equipment to the operators. And so we bought the blending equipment that was custom developed for this and also the freezers that needed to house the product.

And then we had all the investment in the packaging and sort of in the product development. So it was a big price tag for, call it an unproven concept. And so the big decisions really were about what would the scale of this have to be to prove out the business model and prove out

the fact that it could operate and have the right geographic coverage to prove out that it could work across different geographies. And in Canada, we have a long winter and ice cream sales, especially in impulse, die down over winter. So we had to take into account of how would it work in the summer season, how would it work in the winter season as well.

Jess (06:46)
Yeah. And a lot of the stories that we hear on this podcast are about something that, you know, just a gang buster launch or this breakthrough campaign. This launch is a little different, right? Did it go as expected? Like what were some of the, you know, some of the hiccups you might have faced?

Paul De Larzac (06:59)
you

No, so, you know, we launched this under a brand called Crave, so Nestle Crave, and there was a reason why you don't see that brand when you go into convenience stores in Canada, and that's because ultimately it didn't work. Now, I think the concept is interesting, and I think the concept could have worked.

But really what undid us was the winter and the velocity sales during winter were quite a lot weaker than we had anticipated. So it was great when we launched it in the summer, the turns were there, but there was a really important learning around the product which was...

We needed to keep the ice cream in the cabinets warmer than we normally do on our other sort of retail formats so that the machine could actually blend the product. Because when it was too hard, the plastic spoon that did the blending in the machine wouldn't do a good job or would break. So the product had to be kept a bit warmer.

But what that did it was it really shortened its shelf life and when we got into winter We realized that the product wasn't holding up the turns just weren't there and we ended up with a situation where we had a fairly sizable large write-off of product and that brought us to a to a Position of insight where we said look is this a business model that we that can actually work and having had the summer experience in the winter experience under our belt having had the CapEx and the cost

to launch under our belt and ultimately having the conversation with the retailer around the space and the revenue that it was generating, we came to the conclusion that, you know what, we're gonna have to just make the tough decision to write off the Capitol and to wind this down. So yeah, ultimately it didn't work.

But a ton of important insights and lessons came out of that, personally for me as a leader, but also for the organization.

Jess (08:50)
Yeah. Well, tell us about some of those lessons. And I'd love if as you're doing that, kind of bring us into that room where maybe you had to deliver that really tough news or you had to have that really difficult conversation with one of your customers. You know, I hate to say that we relish the sort of pain, that it's so meaningful and so helpful to learn from that. So take us in that room for a minute.

Paul De Larzac (09:12)
Yeah, well, you know, I think

you work very intensely on bringing something to market in a short period of time and you're breaking ground on something that is really innovative and hasn't been done before, it becomes a little bit of your baby. And then when you have to make that tough decision of, do we exit or do we not exit? Do we shut it down? You know, it becomes

emotional for everybody involved, for all the team members that really put sort of their heart and soul into getting something and found new ways of working to shrink timelines and get things out. So it was a really tough decision. would say, you know, my boss and the president of Ice Cream at the time, Shelley Martin, was amazing through the process and she really role modeled risk taking and

that innovative spirit and role model celebrating failures and learning from them in order to foster a culture of innovation. And she empowered me to ultimately bring that final recommendation to the table. I wasn't told to shut it down. I had to go think about it with my team and bring a recommendation. And we did.

shut it down and it was was myself and the president and the CFO of the division and it was a it was a tough but it was it was a when you looked at all the facts it was pretty clear what what needed to happen you know and and i think the the key lesson out of that and the reflection for me out of that was you know

it's important to empower that risk taking in any organization and it's important to celebrate those failures. Otherwise, you're gonna stifle whatever innovation culture you have. But the second part of that lesson was maybe we went too big and maybe if we had gone smaller.

and iterated a bit more. We could have found a way to do this that was cheaper and that allowed us to fail fast, learn and iterate a little bit like the tech model that we're all familiar with now.

specter of a competitor entering the market before

we did and occupying space in geography and with the retailers that we wanted to sort of occupy space, I think pushed us into rolling out bigger

us more liberal with the investments than we should have been in retrospect.

So to me, the key takeaway is don't go so big that if it fails, it really hurts your P &L or hurts your plan for the year. Go big enough that you can live with if it's a failure and that you can iterate fast and pull out learnings and make it better the next time so that it has a chance of surviving and thriving.

Jess (11:47)
Yeah, I really like that concept

of big enough because there are so often the time pressure to get to market, especially as you describe in this sort of you have to be there first to occupy the space that you want in the market. But that pressure can cause you to either skip steps of learning. So in this case, it sounded like there was sort of a product delivery aspect to it. And so that's a really important reflection of that balance. And I love this idea of big enough. I think that more CPG companies should should take that that purview. I think that they'd save a lot of money.

if they had that lesson. And I also love your manager, you said, really empowered that risk taking and she role modeled it. Isn't it so inspiring to work for leaders like that? And I'm sure that trickles down into your leadership style today, which we'll talk about next. yeah, any other takeaways from that for real launch in Canada that didn't quite go as expected?

Paul De Larzac (12:38)
I will just say, picking up on your last point about that role modeling, it took me a number of public iterations of that case study being discussed or rolled out to get over the shame of having such a big failure on my resume, let's say, or in my experience.

I think it's important to acknowledge those things and I needed to get to a certain level of maturity where I could talk about it and say, look, that's just part of, if you're gonna innovate and if you're gonna try to move fast and be on the sort of cutting edge of what you can do, you're gonna have those failures and you need a learning organization to be able to take advantage of those failures. And as an individual that stung the first two or three times that I had to share in a forum of, you know, in front of the company,

or in front of

total group of leaders in our organization or whatever, this case study. But I think it's important that the culture supports that kind of open conversation and transparency because it's the only way that an organization learns and moves forward.

Jess (13:44)
Yeah, absolutely. And that's an excellent segue into the next part we want to dig into, which is you as a thought leader in your organization and in the industry. And as we were talking, it really became apparent that you have a really passionate point of view about the concept of transformation.

That can impact any number of things, whether it be company strategy, operations, how you develop and lead people. So talk to me about some of your more passionate viewpoints about this concept of transformation.

Paul De Larzac (14:13)
Yeah, sure. I think that a lot of times when we are faced with a challenging business situation, underperforming businesses, or we can't unlock certain...

brands or product, performance, or whatever it may be. think a lot of that comes down to artificial structures that we've created for ourselves, either as individuals or either as organizations. And you know, these things get referred to as sacred cows and we're all sort of aware that they're out there. But I think that reframing a problem or

Looking at it and and asking the question of how might we do it differently to give ourselves more options to get beyond a certain blockage or a certain impasse that we're at

really opens up people's minds and allows them to look at a problem differently and get to that level of transformation. Most of my experience I would say in this area is that it isn't a market limitation. It's limitations that we put on ourselves. So as a quite passionate about making sure that

Jess (15:17)
Mm-hmm.

Paul De Larzac (15:20)
I challenge myself and my point of view, but that I also empower my teams and challenge my teams to look at things differently. You know, especially if there, if I hear something around, you know, we've looked at this three times already in the past five years and, and we don't see a way out or we don't see a solution. And it's like, okay, you know, is that really a market driven thing or is that an internal thing? And do we need to challenge some internal or some

whether that's something that is imposed on us, let's say in our organization from Switzerland or from something outside of our market or is it something that we impose on ourselves with, we can't do that or, you know, rules say that we can't do that.

Jess (16:05)
I imagine in a

the size of Nestle that there are a lot of systems that have been in place for a number of years. so thinking that we'll challenge that in really healthy way and try to picture what's possible, that's got to be a combination of the people that you hire and the people that continue to develop within the organization. But that feels to me, and I'm curious if you agree, that it's a...

It's a people driven aspect of the business of how we can tackle problems in a new way. What are some of the ways that you do empower your teams? Do you have any examples of how you've coached them or things that you've provided to them as a resource to help challenge that thinking?

Paul De Larzac (16:43)
Yeah, think related to the example that you asked me about, know, the lesson that stuck with me is to support risk taking. And I support that in my coaching conversations with my team or even my status conversations with my team. You know, when they want to try something, I'm all in. Doing that responsibly, obviously, but they always know that they have that support and that failure is just part of the equation.

And in fact, we talk actively about, we're going to try these five things. We know only three will work.

but the three that will work or even the two that will work are big enough and game changing enough that they're gonna carry us through to where we need to get to. And these other three that don't work will give us the learnings for next time or will allow us to iterate for next year or whatever timeframe we're working in. So I think that's important. then I think for me, it's making sure that that trickles down through the organization. So making sure that my leaders,

when they're working with their teams are also supporting that level of thinking so that we can unlock that creative spirit and that courage to try new things throughout the organization. Because a lot of the great ideas sit in with people who are closest to the problem, not with us.

the leadership level that maybe aren't as close or are getting information filtered up to us.

Jess (18:01)
Yeah, that's a really good point. That's to the problem. You have that empathy for actually how to solve it. You mentioned use the term responsible with the risk taking. When is something too risky? When is when you'd say, no, we're not doing this.

Paul De Larzac (18:14)
So the way I think about it, and every organization is gonna have different financial threshold, let's say, or time thresholds, but the way I think about it, Jess, is, is your plan hinging on it or not for the year? You know, one of the, the,

Jess (18:26)
Hmm.

Paul De Larzac (18:28)
I think the mistakes that I made with the Crave launch was that it was the growth of that was integral to my delivery of my targets. And when it didn't work, it took my whole plan and in fact our divisional plan off of the target. So.

You know, my thinking now is if you're going to do something risky, let's treat it as its own thing and not make it make the whole plan, the annual plan contingent on this thing working on not working. You know, keep it contained enough that if it doesn't work, it's not going to derail the great work that all the other people across all the other brands and formats that, know, that they're doing, that it doesn't derail that and doesn't take away from the the business's ability to deliver it.

commitments to the organization.

Jess (19:14)
Yeah, that makes a lot of sense. So what's your hot take on the future of the food industry? And holy smokes, is that a big question? But I can't wait to hear what your hot take is.

Paul De Larzac (19:21)
Thank you.

Well, I think, you know, there's a lot of conversation right now about GLP-1.

drugs and sort of the impact on food and what that's gonna do. And so much of our food is what we can find in stores is processed or is snacking or is indulgence. And obviously as somebody that works in ice cream, I think about that and go, okay, are people still gonna wanna treat themselves or celebrate with ice cream? I think it's interesting. think people will continue to snack and I think that people will continue to...

treat themselves. And I think we'll reach some sort of plateau with GLP-1 usage. So I hear a lot of worry about that. I think it remains to be seen how GLP-1 drugs play out on the overall consumer packaged goods industry. Right now, I'm seeing a lot of concern, but I'm not seeing a lot of evidence necessarily that

food industry is impacted.

I think the second thing I would say

think food overall is entering a,

a new phase maybe and I think the innovation that you see will be more reflective of healthier and cleaner eating trends and I think it'll be more reflective of healthier lifestyles that people are leading and so I think you'll see probably a bit of a bifurcation where there'll be more fresh food and more sort of

building blocks of a meal type of food. And then I think you'll see more convenient innovation at the healthier, sort of cleaner, simpler types of food. So I don't think snacking or indulgence will necessarily go away, but it'll change to adapt to what people are looking for from a lifestyle standpoint. And I think where the pressure will be is in the middle of that, that if you're not serving the building blocks

or you're

serving the healthier eating trends, you're sort of going to be caught in the middle. And I think that part of the food industry is probably going to feel some pressure over the next decade or so.

Jess (21:27)
Yeah, no, that's a really insightful observation. And I was just thinking about ice cream as an actual, you know, food format. Consumers have an emotional relationship with ice cream. And so they might just be reimagining what that relationship looks like in the context of some people perhaps no longer having certain cravings, but they're still, you know, an emotional relationship with that product. So my money is on ice cream is going to be fine, Paul. I think you're going to be good.

Paul De Larzac (21:54)
Hahaha

Jess (21:56)
Okay, well we're going to go into the final dig. This is all about you as a person, so feel free to take off your professional hat if you wish as you're answering these questions. What's the last product or service you bought on impulse?

Paul De Larzac (22:08)
I bought a ski helmet on Impulse. I decided that I needed a new ski helmet and then I saw one from a brand that I really liked and decided that I should treat myself to a new ski helmet.

Jess (22:20)
Good for

you. I'm glad you did. And I'm sure it's snazzy looking. I'm sure the visual had something to do with it, not just the brand, right? It had some cool colors.

Paul De Larzac (22:28)
Well, yeah,

it's, you know, features and benefits as every good marketer will look for. And I like the color. It was kind of a rusty, so it wasn't your traditional black or white helmet. It was kind of a rusty, funky sort of metallic color, which I liked. Not that I shop purely on color, but...

Jess (22:46)
Cool, I like it.

No, it's a nice added benefit to your point. What's a category or brand or maybe a specific product that you could rationalize any price point for? You just have to have it in your life. And being a skier, you might have a lot of examples here.

Paul De Larzac (23:02)
You

know, I'm a skier and a mountain biker. when I think when you're in sort of those more niche sports brands and companies will justify all sorts of crazy price points and you're going, really, I'm paying this for that. That's outrageous. But you know what? I will say Jess is anything with Gore-Tex and it's funny because it's a, you know, it's a 3M product, a B2B brand, but

Jess (23:16)
Yeah.

Mmm.

Paul De Larzac (23:28)
and so many brands have it, when I see stuff with Gore-Tex, it just gives me that extra assurance of the performance of that product. And I have shoes with Gore-Tex and I have jackets with Gore-Tex and pants with Gore-Tex. And I...

It's the price premium on Gore-Tex products is outrageous. And you kind of go, okay, this jacket is half the price of the Gore-Tex jacket, but I still want the Gore-Tex jacket because I trust the performance of that garment or that fabric.

Jess (24:00)
Yeah, well being my husband's family is a big fishing family. So Gore-Tex is a core theme and in our household as well. So I get what you're saying, but the proof's in the pudding. Those products work really well. Speaking of brands, brands have distinct personalities. What's a brand that you would like to date and what's one that you would like to marry and they don't have to be the same brand.

Paul De Larzac (24:12)
Yeah.

I would say Salomon. Again, because I'm a mountain biker and a skier, there's something about the Salomon brand that I really like. I have Salomon running shoes and Salomon skis and Salomon jackets and pants. It just feels like that's a brand that...

gets me and gets my needs as a recreational athlete call it. And they really think through features that really contribute to the enjoyment of whatever it is I'm doing with those products. yeah, so that's a brand that I would date.

Jess (24:54)
Do you want to pick one for who do you brand you would marry or is Solomon really your soulmate?

Paul De Larzac (25:02)
Maybe Salmon is my soulmate. don't know. There's probably a lot of smaller specialized brands that I really like that I could marry, but maybe I'll just be boring and stick with Salmon. They really get it and it's one of those brands, again, that I don't necessarily think about too much. I just buy their products and I know they're going to work.

Jess (25:22)
Yeah, yeah. So finally, what keeps you inspired at work,

Paul De Larzac (25:29)
You know what, I think it's the people that I work with.

Again, I think we're doing such great things and I've got such a great team and we're pushing the boundaries and we're risk taking and we're innovating. I just feel super energized every time I come and I get to meet with incredible people, super smart people. And, you know, I have the freedom to operate, which I really appreciate around the leadership of Nestle to say, look, this is is your business.

and do what you need to do to make it great. And that trickles down and I can empower my team to do what they need to do. And then I'm just super inspired by the creativity and the plans and the executions that come from that group of people. So it's kind of a cliche answer. I suppose a lot of us love where we work because of the people that are there.

But for me, it's true and I absolutely enjoy coaching and watching those people go from great to greater to even better. And to me, that's what it's all about.

Jess (26:32)
Yeah, it's not cliche and it's reality and it's, you can't find great people everywhere. So I'm really glad that you do have that team. And it sounds like an inspiring place to be and obviously a fun category to be working in. So thank you so much for sharing your wisdom and your story today, Paul. It's really been a pleasure. So thank you.

Paul De Larzac (26:51)
Thanks for having me, Jess. Really appreciate it.