I met Craig Morantz in the late 1990s when I started my distributorship and he was growing his Toronto based supplier, Aware Marketing. Simply put, Craig zigged while others zagged. He brought a flare to an industry that was pretty conservative at the time (still is for the most part). Our businesses grew together and it was fun to collaborate on several projects. When Aware was sold to Leeds in 2004, I knew that Craig would enjoy applying his entrepreneurial passions on a much larger scale. During his time on the executive team, Leeds (now Polyconcept) has grown from $165MM to $300MM North America wide. It’s been amazing to watch. In November, Craig announced his “retirement” from the industry. In light of this, I thought it would be fun to catch up with him and talk about a few hot button issues.
So, Craig, you are leaving the industry after 15 years, why and what's on your agenda for the coming year?
It's been a fantastic run for me. I started in the industry at 25 and now that I am turning 40; I feel it is the right time for me to exit. I had 7-1/2 years on my own, running Aware / Icon, and learned a lot! I built a nice company and a culture I am still proud of today. I then spent the last 7.5 years with Leed's / Polyconcept and learned even more. At Aware, I learned mostly from hands on experience, making mistakes and growing a small company. At Polyconcept, I learned a lot from those that I worked with: Michael Bernstein, Sharon Willochell, Marty Vuono and especially David Nicholson. Collectively, we grew the company and I learned about collaboration, something I really did not need to think about previously. I am very grateful for both chapters in my promotional products career. Recently, I decided that my inspiration, on a go-forward basis, is somewhere else, but I am not sure where. This coming year is all about finding my next inspiration. My only plan for the coming year is to not have a plan, except some travel with my family and the chance to read the 20+ books that have piled up over the last year.
What are three things in our industry you think have to change but probably will not?
- The relationship between the end user, distributor and supplier: There is too much overhead and too many bodies involved in the entire sales and order process. I am not an advocate of suppliers going direct; let's make that clear. But, it’s unfortunate that we have not been able to work together better in streamlining processes, including sales, marketing, merchandising and order management.
- Distributors are supporting compliant and non compliant suppliers equally. Therefore those that invest in compliance are not being rewarded because they are not growing faster than non compliant suppliers. We hear from the distributors and end-users how important this issue is but the support often ends often over price and a few percentage points.
- Distributors reducing the number of suppliers they deal with: Yes, many have come a long way, but very few distributors can say they give any one supplier more than 5% of their spend. Your buying power does not just come from total dollars spent; it comes from eliminating direct competitors from the supply chain. The distributor has the ability to capture greater benefits from suppliers if they demonstrate greater loyalty. Loyalty is not just "I will show your product," it is "I will only sell your product." I often hear it cannot be done for a various reasons, but I believe that if distributors want to protect their ever-shrinking bottom line, one way to do it is by dramatically reducing the number of key vendors. You simply do not need to buy bags from six suppliers.
What are three things you would do as a distributor?
- Well, as you might guess from the above: I would focus 60-70% of my spend with 10 – 12 suppliers.
- Become a marketing organization not a sales organization: Traditional sales organizations are expensive and often not scalable. We live in a new world ,and for B2B, it is early. If you can figure it out now, you are going to win in the not too distant future. The future belongs to the marketers.
- Increase the bottom line by focusing on reducing overhead: I would really try to think differently here; it's not just about negotiating a lower lease or outsourcing to India (although the traditional cost-cutting areas should be reviewed). It's about thinking how would I do this if I was starting from scratch. There is a ton of duplication in processes and costs between the distributor and supplier. I would try to figure out how to ensure no costs are duplicated and how to leverage the suppliers' size.
If you were entering the industry as a supplier again, what would you do differently?
Take the risk to not have a printed catalogue (yes that is how you spell catalog).
What are the most important industry trends everyone should be watching?
Procurement and the desire of the end user to keep finding ways to lower their costs: I believe this concept is in its infancy.
Compliance: We have had a few recalls here and there but nothing that really has rocked the industry too badly. There was the BPA scare and the lead in the polypro tote bags, but I think there is going to be something more major that finally gets people to take notice. Those that are socially compliant and manufacture with strict quality adherence are going to be poised to grab market share.
I would be remiss to not call out technology: It’s quite a catchall saying "technology," I know. I think specifically mobile for the sales and marketing departments and decorating from a manufacturing perspective. It's been a long time since we have seen any real decorating advancements.
Craig Morantz was VP of Sales for Polyconcept North America, a $340MM Promotional Products Supplier servicing U.S. and Canadian Distributors. Craig joined Leed’s in May 2004 when Aware Marketing Group, a company he founded in 1996, was acquired by Leed’s and one year later, in July 2005, Leed’s was acquired by PolyConcept, Europe’s largest promotional product supplier.
In addition to Mr. Morantz’s role in leading the North American Sales Team he was also one of seven members of the PCNA Executive Committee that manages the entire PCNA business. Craig’s passion in business is centered around experience and continually pushing the limits on not only Customer experience but also Employee experience. Mr. Morantz’s sales philosophy is lead by the belief that there is value the organization creates and there is value the sales person creates and that exponential sales growth is dependent on both.
Since joining Leed’s / PCNA the Company’s sales have grown from $165MM to over $300MM in North America and from $7MM to $38MM in Canada.
Outside of work Craig spends his free time on and under the water, enjoying wakeboarding and scuba diving and during the winter you will find him on the slopes snowboarding. In addition Craig spends his free time in what he considers his most artistic and creative release, cooking.