Christine Day has been known to stalk grocery shoppers.
She knows their shopping patterns — they usually come on Tuesdays, Wednesdays or Sundays — and she knows that it’s variety, not price, that matters most to them when they stand in the frozen food aisle, hunting for meals.
She knows because she asks. But what those grocery shoppers probably don’t know is that when they’re speaking with the CEO of Luvo, they’re talking with a woman who helped build Starbucks and transformed Lululemon Athletica from a struggling brand to a powerhouse in the athletic wear space.
Now she’s on a mission to change the way frozen food is produced, marketed and consumed.
Day, 52, spent two years working in private equity before Howard Schultz, a client, hired her in 1986 to be the office manager at Il Giornale, the coffee outlet he ran before buying Starbucks. She had just had her first child, and Schultz offered flexibility.
“What I didn’t realize at the time was ‘flexible’ meant you worked all the time,” Day said in an interview with Bizwomen.
She spent more than 20 years with the company, rising through the ranks to ultimately run Starbucks’ Asia Pacific Group, which she transformed from an operation logging double-digit losses to a profit center, with nine of the 10 Asian countries operating in the black. Her turnaround strategies became the stuff of Harvard Business School case studies.
And in 2008, after a yearlong sabbatical, Day took the helm of Lululemon.
There were certainly bad days. Day navigated the company through the firestorm surrounding its batch of see-through yoga pants — and founder Chip Wilson’s incendiary body-shaming comments that followed. But the good outweighed all of that: In 2012, four years into Day’s tenure, the company had the third-highest sales per square foot of any retailer in the world, behind only Apple and Tiffany & Co., according to RetailSails, a retail and consumer-goods consulting firm.
Now Day has gone back to her food and beverage roots with Vancouver-based Luvo, a company with about 100 employees. And as she did at Starbucks and Lululemon, Day hopes to make Luvo a household name.
AN OPERATIONAL NIGHTMARE
Investment banker Steve Sidwell founded Luvo after deciding he wanted to shed a couple dozen pounds and realizing he had to hire a personal chef to make healthy foods he’d actually want to eat. The result is a company designed to offer personal-chef-style foods in the frozen food aisle, starting at $3.99.
Most of the meals have fewer than 500 calories and are packed with protein, not cholesterol. The chicken chile verde with polenta and black beans? It’s 320 calories and 60 mg of cholesterol. The turkey meatloaf and mashed potatoes with Brussels sprouts, butternut squash and cranberries? 220 calories and 45 mg of cholesterol.
The food is now sold at more than 5,400 locations across the U.S. and serves as the in-flight meals for Delta Air Lines. Investors include actress Jennifer Garner and former New York Yankees captain Derek Jeter, a five-time World Series Champion.
But when Day left Lululemon (over strategy differences with its founder), Luvo wasn’t there yet. Far from it, in fact. Although she had hoped to take the summer off before starting the new job in September, she realized at her orientation that the company needed her, immediately.
“I started seeing the first sales report, the cost of goods and the cash-flow position and said, ‘There’s not going to be anything to manage in October,’” Day said. “It was a great product, great brand story, great purpose — and an operational nightmare.”
Not to mention, she’d already invested in the company. After a new round of private equity investment, Day will own about 9 percent of the company.
So six weeks after she left Lululemon and before the summer was over, she was back at work.
One of her first tasks was redoing the company’s strategic plan.
In an all-staff meeting, they identified Luvo’s target customer and the brand’s competitive advantage. They settled on everything from brand voice to general strategy dos and don’ts.
They split that plan into two versions: a long version used by executives and a shorter one for new-employee orientation. The company was growing, and Day wanted new employees to be intimately familiar with the company’s goals as well as how to make decisions that complement them.
Then she developed a strategy for getting Luvo ambassadors into the community.
AN UNTRADITIONAL MODEL
It’s similar to how Day expanded Lululemon, when the recession of 2008 dictated a change in growth strategy.
While Lululemon’s Canadian stores were doing well, the U.S. locations were struggling, Day said. Only five were profitable.
Rather than open retail locations and hope they’d be successful, Day decided to implement a test system. Lululemon hired brand ambassadors in communities the company wanted to move into and let them set up a showroom in the city. If, after six months, the ambassadors were able to prove the demand for Lululemon clothes, corporate would open a store in the city. If not, they’d cut their losses and move on.
Meg Seitz, formerly a brand ambassador for the Charlotte market, started two years into Day’s tenure.
“You have to be OK signing up for a model that’s not traditional,” Seitz said. “I loved the challenge of it.”
Seitz helped plan events at the showroom — free yoga classes followed by trunk shows. She stayed with the company after they opened the Charlotte store and watched the staff grow from three people to 30.
That’s what Day has now done with Luvo, capitalizing on the star power of investor and 14-time MLB all-star Derek Jeter.
Not only is he an investor, he’s a brand ambassador for Luvo’s food.
“He believes that his career and how he was able to go the distance without relying on steroids or drugs … was because of the commitment to an exercise routine and diet,” Day said. “He treated food as a performance kit.”
So with the help of Jeter and his foundation, Luvo developed a food program that could be taught in schools and on youth teams. It offers everything from plans for interactive grocery-shopping excursions to games for children.
One is a matching game, where kids are given bags of sugar in different sizes and asked to pick which represents the amount of sugar in a 16-ounce Coke. Another involves matching up serving sizes.
Luvo partnered with the New York Jets and the National Football League’s Play 60 initiative, a campaign to encourage kids to be active for 60 minutes a day in order to reverse childhood obesity trends.
And another program for women designed around “eating for beauty” is in the works, Day said.
‘WHAT GETS ME UP IN THE MORNING’
Lululemon taught Day that growth should be strategic and beneficial, not haphazard.
So at Luvo, she started visiting frozen food aisles when she became concerned that the company wasn’t scaling in the right fashion. She decided that studying potential customers’ shopping patterns would tell her what she needed to know.
“I stood in the grocery store aisle and stalked people,” Day said, laughing. “I was asking people how they shopped and why…and what’s most important to them when they stand in front of the case.”
Shoppers told her they were less concerned with price and more with having a variety of meals to choose from. Most were planning their meals for the week and buying in bulk.
Day said that showed her Luvo needed to focus more on getting a variety of items into each store, and less on expanding to new stores.
When Day joined the company, Luvo averaged two different types of products per store. But, according to shoppers Day polled, two types on a shelf weren’t going to stand out. They needed more.
By 2014, the company had boosted the average to seven per store. And this year, Luvo is on track to have an average of 14 or 15 different products in each location.
“It’s about building and creating disruptive business models,” Day said. “And that’s what gets me up in the morning.”