From Consultant To CEO: Neil Stern's Journey At Good Food Holdings

Hello, everyone.

Welcome back.

This is Omnitalk Retail.

I'm Chris Walton.

And I'm Ann Mazingo.

And we are coming to you live for the final time from grocery shop today from the fusion group's booth.

Booth a 210.

And standing between us, Ann, is Neal Stern, the CEO of Good Food Holdings.

Neil, welcome to Omnitalk.

Thank you.

Neil, we gotta start with your background, because you maybe have one of the most interesting backgrounds of anybody that we've interviewed so far here.

You were a longtime consultant, and then for some reason, now you've decided back.

In, what, 2020, you middle of COVID.

Middle of COVID That's a hint.

That's a hint.

You're like, this is a good time for me to go and become CEO of Good Food holdings.

Tell us a little bit about that journey.

So, first of all, I did it exactly backwards.

So you're supposed to have a real job that is being a retailer, and then you can become a cult consultant in your golden years.

Dispense advice.

I did it completely the opposite.

It's 2020.

It's 2020.

I'm sitting in my daughter's bedroom making zoom calls because it's the middle of COVID And the.

The parent company of good food holdings.

Yeah.

Is a large korean conglomerate called Emart.

And they were my biggest client.

And I was, you know, I was flying 250,000 miles a year, going around the world doing my thing, and they're like, hey, do you want to run this company?

And I'm like, huh?

And they're, no, no, we want you to run the company.

And I was sitting there in my daughter's bedroom and saying, you know what?

I don't know.

That I want to get on a plane again.

Yeah.

You know, after Covid doing what I was doing, and I said, sure, yeah.

Did you ask the Taylor Swift poster behind you in your daughter's room?

Like, what do you think?

Taylor?

She was out of the Taylor phase by then, but.

Yes, but we invested heavily in Taylor until.

You were long on Taylor.

Yeah, we're very long on Taylor.

Yeah.

Who is it?

Actually, you gotta support Taylor.

Yes.

Yeah.

So great change.

It took me out to California.

My wife and I, our plans have always been, we're going to retire to California.

So I just made the pilgrimage a little bit earlier to go there.

And good food holdings, I was on the board.

I helped do the two acquisitions to put the company together.

Okay.

So I knew the team, and it was like a great opportunity to, you know, change the real.

Yeah.

Yeah, man.

Amazing.

So, Neil, so one of the reasons we were interested in talking to you today is we were talking about this a little bit beforehand, too.

Even before we started hitting record, you were one of the first people to jump feet first into the water on this idea of the connected store.

Yes.

Why did you feel that was such an important thing to embark upon, particularly as a new CEO?

Yeah, I would say, first of all, I give credit to myself.

When I took over, our e commerce sales shot up 450% upon me taking over the company.

Just solely nothing to do with anything.

No external what was going on at that time.

I forgot.

We just talked about it, but I can't remember.

There might have been a little Covid, but, you know, but seriously, we went from being, I would say we were technology luddites at good food holdings.

We had no self checkouts.

We had very little technology.

And I don't think I did it.

I think our customers did it for us.

So we went in.

You know, it sounds.

It sounds.

Pushed it.

They pushed it, but it sounds boring.

But an 18 months period of time, we went from zero self checkouts to having self checkout across the chain.

Why?

Because our customers wanted it.

As soon as we put it in, you know, 40% of our transactions went self checkout.

Thankfully, other retailers trained them right.

And then we're saying, okay, this is great.

Now what can we do?

That's, you know, I don't think we're going to do a whole segment on, you know, trailing self checkout by 30 years.

So then it was like, all right, you know, what can, what can we do?

We're game if you are.

Yeah, I would speak for yourself, Chris, but, you know, yeah, let's take this and figure out, all right, what is the consumer going to look for us in the future?

And, you know, we had been playing around with different technologies here and there, and Instacart came with a vision of connected store, and we said, yeah, that's it.

Because we have a lot of disparate pieces of technology that don't talk to each other.

What if we were able to connect it for the consumer?

Right?

So right now, I'd say there's a huge disconnect between what happens online, what happens in store.

How do you start to bring those pieces together?

And that vision kind of captivated us.

And we said, yeah, let's do it.

And of course, Instacart wanted to go somewhere sunny and warm.

So here we are at Bristol Farms, and they're like, yeah, travel south.

We'll come to Santa Monica and put some stuff in, and that's what we've been doing.

Right.

And how do you think you have a lot of banners too, that you manage as well.

So how do you think about that?

Because the data component of that's got to be interesting.

And the back office, to get a connected store off the ground has got to be difficult, too.

Yeah.

Which is why we're trialing in banners.

So one of the wonderful benefits we have of being.

That's interesting.

Yeah.

So I'll give the plug.

Right.

We have stores from San Diego to Seattle.

Metropolitan markets in Seattle, new seasons in Portland, new Leaf in Santa Cruz, Bristol Farms, Lazy Acres, southern California.

One of the things that we had to do was as our business grew 450%, we had zero way to scale it efficiently.

It just happened by happenstance.

So we've had to go backwards, really, in our data journey, put in master data management, put in clean data files, things that are not very sexy to talk about, but we needed that to enable how you move forward.

But the beauty of what we have is we can, we can have caper carts in southern California.

We can have ESL infusion booth, a 4210, a 210.

It's a good thing you're not in charge of directions.

They have cupcakes, by the way.

Sprinkles.

Yeah.

You're at geolocation.

Walking to those cupcakes.

So what enables us to do is test pretty quickly and be able to test different things.

So I can test something different in Seattle, I can test something different in Portland.

And La sort of became the place for connected store.

Now if we want to roll that.

Right.

That's all the work we've been doing with a lot of vendors around this room.

Right.

You know, our mantra sort of is we're going to have centralized technology, we're going to pick the best in class tool and then have localized execution of that.

Okay.

Right.

So the example would be where we're all on storefront pro as our e commerce platform.

But if you went on our website today, if you went to new seasons, you're going to see them talking about local and something about Oregon.

If you go to Bristol Farm, they may be talking about me.

Right.

So we have the ability to have that central tool, but then have the local people execute to what's right for the market.

Well, Neil, I want to talk for a little bit.

You mentioned all the banners, all the testing that you're doing and have been doing since you started in 2020.

What is paying off and where do you think I.

Technology that you've invested in or tested still has a little ways to go.

Yeah.

I think what's paying off are things that are tangible and immediate for consumers.

So boring things like self checkout.

Absolutely paying off because the consumer can see it.

We've redone our, we've redone our websites, we've redone our social platforms.

We can see immediate, tangible benefits of it.

So tangible benefits from the consumer perspective instead of an ROI from consumer benefit.

N ROI for us too.

Like ultimately both of those have to work.

Right?

I have to get something the consumer cares about and I have to eventually get our OI on it for us.

The things that are taking longer to play out, I said on my talk this morning, we're in the second inning.

In our baseball analogy, it's early days, right.

So when you talk to David McIntosh and you talk about the vision of what caper carts can become, it's fantastic, right.

Because it's going to be the vehicle to say, I'm going to be able to have personalized customized offers companion going through my store.

I can gamify it, I can do all these cool things.

But we're early days on doing that.

And our customers have been shopping us for a very long time.

They know how to use a shopping cart.

They don't know how to use a capercart.

So now it's like, okay, we have ambassadors in the store.

We've got to start training them to use it.

They have to repeat use it.

Yeah.

We have to get rid of the, the bugs.

Yeah.

And there, and there are always bugs and things we can't do.

But that's, that's the journey that we're on.

When you're trying to change longstanding consumer behavior, it takes some time.

Right.

And ultimately for caper as an example, that, that consumer benefit.

Right.

You have to start stacking those consumer benefits.

Right.

So what are the benefits like, okay, I can save some time on checkout.

Yep.

I know what my, I know what my, surprisingly, the biggest thing has been.

I know how much money I'm spending.

Right.

Yes.

As you shop.

Yeah.

That's been a big awakening.

Like, wow, it's not so much, yeah, I want to save time, but it's really great that I know how much money I'm spending.

And by the way, if they know how much money they're spending, they're actually spending more money.

Right, exactly.

Because we're like, oh, that's gonna be a bad thing.

No, no, no.

The consumers just want to have control of what.

They just want to make sure they're not going exactly.

If they don't have that prize at the end.

So then as we, you know, we start to layer on the benefits.

But I say those are the things we're early days on.

And you know, we're saying we're willing to put an alert little bleeding edge to go with the things that we know are gonna be tried and true.

Yeah.

Awesome.

Neil, have you done any experimentation on the scan and go side of things?

Cause that's an interesting like dichotomy there.

The scan and go approach versus the capercart approach.

Something I've personally and Ann and I have been talking about a lot at this show, especially given the announcements we saw from Sam's club yesterday.

What have you learned that are the puts and takes in regards to that system?

Yeah, we have scan and go as well.

We're testing that.

Scanago is working incredibly well for us for smaller transaction sizes.

A lot of, a lot of our food service driven transactions.

You know, we have customers.

We put it into Manhattan beach.

Our Manhattan beach store is almost a cafeteria.

Right.

For office workers around there.

They love scan and go because of, because of the speed on it.

You know what, now we have, I think the difference between us and Sam's.

And great for Sam's.

We have 30,000 items.

They have 4000 items.

That's a great point.

We have random weight items.

They tend not to.

So they're in bulk as well.

We have liquor, which right now you can't do in California through scan and pay.

So that's why I said the more things you put in front of customers, like wow, that's cool.

But I just gave you four things you can't do with us.

That's kind of the piece that we're still trying to work through, which is it has to be seamless for the customer.

But yeah, I think our vision of the future is it is not going to be one thing.

Right.

We always say what we want to do is eliminate lines for customers, period.

And you might choose self checkout, you might choose scan and pay.

You might want to cart.

We've got a lot of customers who want to go through the register and.

Right.

So we don't want to limit their choices.

We want to give them what they're looking for.

Right, right.

Yeah.

Which is a great segue to the question we want to ask you to.

In closing here too is the connected store.

While an idea is still, like you said, it's maybe not even any two in terms of the total connected store.

Right.

We're still, we're still in the preseason in a lot of ways.

So as it's starting to take shape and with our grocery ex, our grocery executive audience, as well as our retail audience in general, that can benefit from your insight and knowledge, what are some of the lessons you've learned over these past few years that you could maybe impart on others so they don't make the same mistakes that you've made potentially in trying to understand?

Right?

Yes.

Either the things you've learned that you got right or the things maybe you missed.

Otherwise, I should have got the cupcake early.

Cause I'm worried they're not gonna have my flavor.

Yeah.

No.

Hey, hold one of those.

Yeah, hold the cupcakes.

No, I think, first of all, you're gonna have to make mistakes.

That's a great point.

That's the part where we said we're gonna fail fast.

We're gonna test, we're gonna hopefully not commit.

Right.

You don't wanna over commit.

We don't wanna over commit, but we wanna try things.

Right.

So we know coming in some of the things we're trying is not gonna work.

And I would say, yeah, one of the lessons is don't be afraid to try because if you don't, you're not going to get anywhere or you're going to be, you know, you're going to be a laggard.

But, yeah, I think, I think the cool thing in connected store, and here we are sitting in the fusion booth, like, what else can you layer on carrot tags.

Pick to light for the consumer.

Pick the light for stocking.

Those are, those are cool things that are coming the future.

And then where we get excited about it is they're saying, okay, that's a technology.

If I put it in, what, what else can I do with it?

Right, right, I, and now we get excited for our customer base of saying, oh, you're gluten free.

What if you're able to go down the aisle and hit the button and you can find their products that are gluten free?

We have tags on our items, but our tags get to give you two attributes.

There's only so much you can put on a tag.

We have items coded to 100 attributes.

I can only put two items on the tag.

So can I help vegan customers find their way?

Can I help gluten free customers find their way?

I got the technology, now I got to start to figure out ways to layer on value to it.

Right.

But if you're just looking example, if you're just looking and saying, well, I'm going to look at labor savings.

Great.

But what else can I be thinking about in the future?

So option value of tech is very important to you.

Yeah.

And the ability to have flexibility in thinking about what that, what that value is today and what it might be in the future.

All right.

All right.

Well, that closes us up.

Thank you, Neil.

You're welcome.

Thank you for spending time with us.

Thanks for, thanks for going in depth, too.

We always appreciate that and appreciate your time that you spent with us today.

And so on behalf of all of us at Omnitalk, Ann, this, thank you again.

Yes, thank you again to fusion group for making the coverage possible.

Yes, yes, they're still here.

They're having a happy hour right now with Instacart.

It's only like, what time is it, Ann?

It's ten to five.

There's wine, there's cheese, there's Kobe beef.

So come on, stop on by.

We'll see you.

We'll say hi.

And until next time, and be careful out there.