Consumer Innovation at FFL: One Operating Partner’s Tale
After a career in industries as varied as clothing and canned soup, Mark Sarvary decided to use his know-how to supercharge a FFL’s consumer portfolio
Privcap: Why did you decide to transition from the corporate world to private equity?
Mark Sarvary, FFL: At the end of my time at Tempur [Sealy], I was looking at a variety of different options. Chris Masto, co-founder of FFL, had been on the board of Tempur, and he and I discussed whether it would make sense for me to join FFL and be on the other side of the table, so to speak. Being part of the asset-management side was very intriguing, but so was the opportunity of working with a team that I knew well, and that I respected very highly.
Is there a particular area within operations that you’re focused on?
Sarvary: I’m particularly focused on areas that are consumer-facing. I’ve spent most of my career working on understanding consumer needs and marketing to them, and by providing products and innovations that better meet their needs.
What are some of the ways that you innovated an existing brand?
Sarvary: When I was at Stouffers, we faced one of the things that had long been a problem with frozen foods—although they are convenient, people don’t feel like they’ve ‘cooked’ if they prepare a meal in a microwave. And so they feel reluctant to serve frozen meals to their family.
With this insight, in 1997 we launched a product line called Skillet Sensations. The idea was that instead of cooking it in the microwave, you cooked it in a pan. It required a completely different method of manufacturing—instead of being frozen in a block, it was frozen in pieces. It required different machinery, different distribution, and so on.
It was a very successful product launch, and it really did meet the need of providing consumers a product that was convenient, but [also allowing] them to feel like they were cooking. It’s an example of an innovation within a specific product area that brings in more users.
What changes did you make at Tempur Sealy?
Sarvary: When I first joined Tempur there was only one type of bed.The problem was that about half the people who tried the Tempur bed said they didn’t like it because it was too firm. So we developed and launched a softer version that we called the Tempur Cloud. The Cloud was sold alongside the existing product, and the incremental sales from that product doubled the size of the Tempur business.
At the same time, we were also expanding distribution of the Tempur[-Pedic] adjustable bed base. These bases had not been popular in the U.S.; they were perceived to be like hospital beds. However, we knew they were selling well in some countries in Europe, so we expanded their distribution and made them a focus of our marketing. Today, over 50 percent of Tempur beds are sold with adjustable bases.