From Procter & Gamble to Clorox to Peet’s Coffee, master marketer Eric Lauterbach BA ’89 advises business professionals to listen to strangers, do the math, and create the space to try and to fail
By any account, Eric Lauterbach is a success story, yet he considers failure critical to his achievements. President of the Consumer Division at Peet’s Coffee, which he joined in 2010, Lauterbach originally planned to be a lawyer before taking a detour into business, following in the footsteps of his father, a controller, and mother, a real estate broker on commission-only sales who “had to make it happen every day.”
Born in San Francisco and raised in Concord, California, Lauterbach wanted to attend a UC but felt Berkeley was too close to home. He was interested in majoring in political science to satisfy his law aspirations and “once I saw UCSB, I was hooked.”
Lauterbach says he inherited his drive from his parents but believes his career “was most influenced by my experience with fraternity brothers and the leadership positions I had at UCSB. I met great friends and mentors that shaped my career path – to business and general management.” He became vice president, then president of Sigma Phi Epsilon, served on student council committees, and worked at AS Notes, a service where students could purchase notes from major classes.
At graduation, Lauterbach received the University Service Award from Chancellor Barbara Uehling. He then turned down a job offer from Procter & Gamble to work for his fraternity for $6,000 a year. The decision seemed counter intuitive but, like many of the moves he has made in his career, turned out to be “a choice that made all the difference.”
You received your MBA from Pepperdine University, but you said that the leadership opportunities you had at UCSB were formative in your business career. Is there anything else from your time here that you find directly applicable on a day-to-day basis?
There was a class, “Voices of a Stranger,” that still resonates with me 30+ years later. It was taught by Walter Capps (a professor in the religious studies department for more than 30 years who served in the U.S. House of Representatives briefly before his death in 1997). The course explored people who were different, minorities, had different perspectives. We read books like The Invisible Man and Bury my Heart at Wounded Knee and had guest lectures from paraplegics as a few examples. It really focused us on thinking about how we view the world in the context of others who view it differently.
It taught me about empathy, about trying to understand where others are coming from, to ask better questions and really, really try to understand those that aren’t like me. There are a lot of different people in the world and to be successful, you need to be able to interact with many people who are not just like you.
I love to learn. My time at UCSB taught me how to learn, to really enjoy learning, which I do every day. The connections I made at UCSB have proven to be life long and instrumental to my career and development.
When you think of your career trajectory, what was the greatest factor in your decision to move from one company to the next: was it the specifics of the job itself? The stature of the company/brand? The management philosophy? Is it important to be passionate about the product--for example, do you think you would have found your current role as alluring if you were not a coffee drinker? Or, do you think part of being a marketer is being able to sell anything so the product line should be interchangeable?
To me, what is critical is believing in the company you are with (purpose, products, people) and working for people you will learn from. I think, back then, I was less passionate about the products, just wanted to ensure that the products were good and competitive. My experience at Attune Foods and now Peet’s has made passion for the product a “must have.” At Peet’s, I believe in what we do and how we do it, and believe we have to have a meaningful point of difference to compete in the consumer goods space.
My moves have been driven by many things. I moved from P&G as it was too big, I couldn’t stay in Ohio forever, and it was time to move west for my girlfriend (now wife). I wanted to try something small and went to an early stage startup. Two start-ups later, I was at Clorox as I felt it was time to “get back” to consumer goods and some stability. My move from Clorox was due to the desire to go build something. Clorox was too big and bureaucratic for me, so I headed back to a start-up [Attune Foods, an organic cereal manufacturer, now part of Post] and then to Peet’s where I’ve been fortunate to find the intersection of passion and ability to really build a company.
When you arrived at Peet's in 2010, it was a publicly-traded company. Two years later, it was acquired by an international firm with holdings that include other premium coffee brands like Caribou and Stumptown. How has that changed your role? Has it made it easier because of added distribution channels? More challenging because of the need to further differentiate Peet's brand within the increasingly crowed premium coffee space?
We were a mid-cap company and when we were taken private, it opened up a lot of opportunities. We (Peet’s) purchased Caribou, before it was spun out, and Peet’s also purchased Stumptown. I was part of both of those acquisitions (along with Intelligentsia, Mighty Leaf Tea and Revive Kombucha), and this has helped us more than triple the company’s revenue while growing Peet’s market share. My experience with consumer goods companies has taught me the value of a portfolio of complimentary, leading brands and we’ve been able to fold these brands into our distribution and selling channels to help them accelerate with scale that they needed.
You wrote, "We have to have a meaningful point of difference to compete in the consumer goods space." How do you differentiate Peet's from your competition?
Peet’s has a distinctive taste – a dark, deep roast – that is polarizing which is what makes it a great brand. It simply tastes different. It is stronger, more coffee forward. Intelligentsia, Stumptown and Caribou are lighter / more medium roasts, so less coffee forward. We’ve been buying from the same farms for 50 years with only 3 Roastmasters, the first being Alfred Peet himself. There is a real sense of history, and duty to our heritage, that I love about the company and that sets us apart from other coffee brands.
If a graduate wanted to follow a similar career path, knowing what you know now, are there a few specific pieces of advice you could share?
I would do more math. You can’t avoid it, and I didn’t do enough in my Poli Sci major. I grew up on the sales side of the business, so the value of creating revenue and getting up every day to make things happen is something I place a lot of value on – companies have to grow profitably to succeed. I would tell people to really understand how to create revenue and sales. And, you need leadership experience – my time at UCSB, both in SigEp and on Leg Council, provided a great foundation for understanding how to lead and influence people.
You mentioned having worked for 4 failed start-ups. Some successful business professionals believe that experiencing failure (not just in business) provided more valuable experience than success. Was this the case for you and if so, can you provide an example of a "failure" and how it "helped" you?
I gave a speech at a SigEp leadership luncheon last year where I called failure a necessity. I think creating the space to try, and fail, is critical for success and being in the right culture that supports that is a top priority for me. Startups are all about failure…at a company called True Spectra (early digital imaging), I headed up marketing and we made a big bet with little money on a lead generation program that failed…cost us about a quarter’s worth of cash. I didn’t have the support of the sales team, and was left swinging in the wind. As a result, I had to lay off 2 people. I’m very cautious with marketing bets to this day.
The CEO who hired me at Peet’s told me on Day 1, “You can screw up and work for me.” I then proceeded to make a mistake in a legal action that helped cost us ~$1M in legal fees and damage payout; all because I reacted in the moment, didn’t go deep on one area. It has forever changed (1) my attention to detail, (2) how I send emails and (3) how tolerant I am as a leader / manager on others' mistakes. When people screw up, and it affects them, I pull them aside and tell them my “Million dollar screw up story.”