GENEVA CONVENTION 2017 Paul J. Rogers Leadership Award: Michael Rosenberg, Promotion in Motion

Interview with Michael Rosenberg, President and CEO, Promotion in Motion

You started your first company while you were still in college. How did that come about?

I had started off in college as a music major—I was a violinist—but I decided to make a pivot and switch to the business school after the beginning of my sophomore year. I figured if I was going to be in business, which was a very radical change from what I had been doing, then I was going to start a company.

I had actually formed a company from my college dorm room. It was all designed to sort of thrust me into the world of business from the world that I had been accustomed to in classical music. In the beginning, I was trying to do anything I could think of to get it up and going. Eventually, I got into a licensing agreement with Columbia Pictures, which gave me the rights to make cookies in connection with the movie Annie. This was in 1981, so for the first two years we just did the sort of things where we were trying to find our way. That was our first big initiative. I started working in 1980 on that license from Columbia. I formed a joint venture with a company called FFV, which stood for Famous Foods of Virginia, also known as Interbake Foods. They were the largest baker of Girl Scout cookies, and they were looking to get into the branded cookie business at retail instead of just Girl Scout cookies. I pitch them on this idea. We launched cookies under the Annie brand. When the movie came out, they were very successful. Even though the movie wasn’t the greatest hit, the cookies were a huge hit. From that, I felt like it was it a really good opportunity to use licensing. So I approached American Greetings, who was launching Care Bears. I got them to give the rights to use Care Bears to start selling gummy bears, which were just starting to get popular in the United States. I launched the Care Bears gummy bears, and that launched us into the confectionary business. We’ve been a confectionary company and snack company ever since.

How big of a transformation has this sector experienced over the last 30 years?

The change in this industry, it has been seismic. I first started selling movie theaters in the early 1980s. Back in that day, there were not that many great huge theater chains. Of course there were some larger players, but there were many small- and medium-sized players. There were also just dozens and dozens and dozens of small concession distributors that locally delivered to their theater customers.

So back in the early days, any distribution for our products was so different. Because you had to really pound the pavement, get in to see the little operators that had a handful of theaters, get them to want to carry your product. Then ask the distributor to bring the product in, they did, and you’d start working with them and building it. That was one big change, as opposed to today when there are so many large theater chains that have really changed the paradigm.

Another big change also has been that predicting demand was difficult. Movies would come out, you didn’t know how large they were going to be. All of a sudden, you’d have the theaters calling up saying, “I’m completely out of your product.” It’s the middle of the summertime, Christmastime. We used to actually work very closely years ago with the studios. They’d kind of give us an idea of what movies were coming out and what they thought was going to be the bigger movers, especially to the age groups of the products we were making. We had to cultivate personal relationships with a lot of them. Of course, that’s also changed dramatically.

The way people attend movies today has also been a big shift. The change to luxury theaters, dining-in theaters, is also a dramatic change. The quality of the presentation, the way consumers pick up products, what motivates them to buy concession products has been such a huge transition in comparison to when I started in the early 1980s.

Do you believe we’re still in the process of that transformation in the business?

I think change is inevitable in every industry. Part of being successful is adapting to the change and ensuring that you stay relevant to your customers, whether you’re the operator trying to appeal to moviegoers or you’re a supplier to the industry. Adapting to a perpetual environment of change in any industry is going to oftentimes define whether or not you’re successful. The investments that the theater industry has made in their facilities is necessary, because it will keep people stimulated and interested in going to the movies. Presenting films in an environment that’s appealing is essential, especially considering the fact that consumers today have such a wide range of things they can do for entertainment. Competing for their dollars has never been more challenging. But I think the industry has done a great job of ensuring that the facilities remain appealing and remain relevant. At least in my own personal view, even in a day and age of Netflix and on-demand everything, I’ve said this all along: there’s only so much time you can spend at home. At some point, you want to get the heck out of your house. You want to go do something different. I think movie theaters for that reason will always remain relevant.

Ensuring comfort and high quality in every regard will pay big dividends for those that make the investment, because it’s what people ultimately expect: good service, cleanliness, high quality. Quality wins all the time. Being the cheapest guy? Everybody would drive Smart cars and fly ValuJet. There’s always going to be a market for quality. In this industry, it’s particularly important.

What role does the Midwest region play in your business?

The Midwest has always been a great market for our products. In fact, I will tell you that there’s somebody from the group that is presenting this award to me, who has always held a very special and unique place in my heart and really in shaping me. That was Larry Hanson, who when I met him was running a chain called S&S Theaters. This was in the ’80s. I was a pretty young kid at the time, and I went to see Larry. He sat through my presentation, presenting my range of products, and he says to me, “You know, Michael? You’ve got some OK products here, but the name of your company is Promotion and Motion. I’ve got to tell you, I see a lot of candy here. But I’m not so sure I see a lot of motion. And I sure as heck don’t see a lot of promotion. That’s a pretty big bar you set for yourself. I’m not sure you’re measuring up to it.”

He really threw me back. I said, “OK, that’s it.” I’ve got to start really digging in on what I do in terms of my packaging and my promotion. He really lit a fire under my rear end in a huge way. He and I became very good friends. Larry unfortunately passed away at a young age. But he was really a mentor to me and played a special role in the success of our company. He lit a fire under me, which I don’t think has ever extinguished. I hear his voice in the background all the time. What would Larry Hanson think of?

In any event, we’ve always had a strong relationship with many of the Midwest theater chains. I can tell you that one of the people in my professional career that I most admired is Rolando Rodriguez from Marcus. What a talent, what a gifted guy, what a driven man, what a visionary. I think Marcus is fortunate as heck to have him as their leader. Just an incredibly gifted, smart, and talented guy. He really sets a high mark for all of us to measure up to. I love every minute, every chance I get to spend with him. He’s such a smart guy. We’re a lucky group of people to have him in the industry. I have the utmost respect for Rolando.

I know the Johnson family, Chris Johnson. I knew his dad and his family. So many others too, you can name anybody. All the relationships with these folks go back a long way. Whether it’s the distributors that supply the theaters or the operators in the Midwest, they’ve always done a great job with our product. We’ve just been so fortunate to have such great customers, both the consumers and the theater chains, for such a long period of time. We’re always grateful for those.

How would you describe your experience working with the theatrical sector so far?

I started this business with $150 in 1979 and we’ve grown to become one of the largest confectionary companies, not just in the United States but really in the world. The theater industry has always been at the pinnacle of that. Unlike many of the larger companies we compete against, I’m not trying to throw anybody under the bus, but when a lot of companies come out with a new product or a new brand, at some point down the pike they say, “You know, we should maybe think about a theater pack for our product.” At our company, when we’re coming out with a new product, the first thing we do is say, “What’s the movie pack going to look like?” From the movie pack, we build the business.

Americans go shopping every day. Today, everybody knows that they’re doing more and more shopping online. But America goes to the movies just about every weekend. To our company, having the ability to get our product in front of consumers, get them to sit and enjoy them while they’re doing something else that they thoroughly enjoy—watching a movie—the connection between our product and those great times and memories? That’s been really at the center of so much of the success that so many of our brands have enjoyed.

The first place you probably ever ate our products was at a movie theater. Now you can buy them at Costco. Now you can buy them on Amazon. You can buy them at Walgreens or a million other places. I’ll bet that if you stopped a hundred people and asked where they ate our product first, they’ll tell you it was at a concession stand with a popcorn and a Coke in their hands. So the movie industry and our company, it’s everything. It’s been an integral part of who we are and the DNA of our company. We are so proud and fortunate to have had these connections all these years. We hope to enjoy this for many generations to come, because it really means a lot to us.

Daniel Loria

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