When Vince Vetere left the crude-oil industry, he transitioned from the world’s most traded commodity to its second most traded: coffee. The executive joined Kraft Foods Canada in 2005, and in 2009, around the time that he became the company’s finance director for category finance, he found himself on the business team for Tassimo, Kraft’s single-serving beverage brand and product line. He has since helped expand the reach of that brand, thanks to its parent company’s focus on and encouragement of teamwork.
The Tassimo Hot Beverage System
This on-demand drink product does away with the old method of brewing a whole pot of coffee or tea. Just put a single-serving pod or T-disc into any model of Tassimo machine and press a button. By reading the pod or T-disc’s bar code, the machine is able to determine the amount of water, the time, and the temperature necessary to have the drink ready in less than a minute. Tassimo offers pods from a variety of popular beverage suppliers, including Gevalia, Maxwell House, Nabob, Second Cup, and Tim Horton’s.
In his current position at Kraft, Vetere is in charge of assessing, planning, and counselling the financial aspects for all the consumer-packed-goods giant’s brands. His day-to-day responsibilities include annual and interim financial planning, pricing analysis, new-product analysis, and capital-investment assessments, and it was specifically his number-crunching abilities that Kraft sought to take advantage of when it assigned him to work on Tassimo. The company wanted to drive significant change in its on-demand beverage brand, which had been launched only a few years prior. Its revenues were only about $15 million then, but today, in part thanks to Vetere, they’re more than 10 times that.
The steps to get there were fairly straightforward. First, Kraft took a page from the printer-ink business model and invested heavily in brewer sales, locking owners into buying Tassimo beverage discs. Then, in early 2010, Kraft significantly invested in lowering the prices of the brewers in order to get Tassimo into Canadian homes. Vetere and his team, managing the full portfolio of Kraft brands, helped with the investment and the reduction in pricing by creating a growth plan. From there, the Tassimo business team was able to convince Kraft as a whole to invest in brewer subsidization.
According to Vetere, Kraft Canada’s key objective is to be Canada’s most admired company, not only by offering the brands consumers love but through the development of its employees. The company takes a cross-disciplinary approach that allows workers in different fields to expand their skill sets and bring fresh viewpoints to all aspects of a business. “At Kraft, finance has a seat at the table,” Vetere says. “We’re highly influential in the decision-making process, and we’re treated as a business partner.”
In the eight years that Vetere has been with the company, he has progressed from sales and customer finance to operations finance to, now, category finance. The breadth of his experience has helped him drive change at the company, including improving its processes, its culture, and its categories. However, Vetere didn’t achieve his milestones in a vacuum; he did so through teamwork and the pooling together of different assets—an approach that Kraft encourages to remain relevant and successful as a large company.
Every category team at Kraft is made of several business partners from various departments such as marketing, sales, consumer insights and strategy, operations, and finance. “One of the company’s key concepts is ‘winning together,’” Vetere says. Each team’s partners collaborate to understand consumer needs and then create new product concepts.
Once a feasible concept is settled on, the finance team develops 3- to 10-year pro forma profit-loss statements to ensure that there’s payback for the investment, and then it looks at internal rates of return and present value to ultimately determine whether it’s worth launching the product. The team also takes into account any working or fixed-capital investment requirements and tries to consider what Kraft expects to invest from a consumer and customer perspective. The finance department then makes recommendations to ensure feasibility from a fiscal perspective, and when a new product is finally launched, the team adheres to pricing strategies that ensure costing needs are met within the necessary margins.
Kraft’s category teams are always looking for new and exciting products to launch. In 2012, the company introduced Mio in Canada. The liquid-concentrate line of products, much like the on-demand Tassimo line, allows consumers to customize their drinks at their convenience. The two products offer different strategies, but both prize flexibility—a key element of Kraft’s business philosophies as well.
THE BOTTOM LINE
Finance director for category finance
Consumer packed goods
Years in the business
Where did you start your career?
Describe yourself in three words
Results-oriented, passionate, direct.
Advice to those just starting in finance
Quickly learn how to balance the details of being deep in the weeds and the ability for big-picture thinking.