Merisant is the world’s leading manufacturer of tabletop sweeteners.
By Kevin Kipp
“Sweets with sweets war not,” writ Will Shakespeare 400 years ago.
As far as Merisant Company’s chairman and CEO Arnold Donald is concerned,
it’s Equally true today.
“We’re not so much competing for market share with other sweeteners
as we are focusing on growth: new users, new uses and new recipes,”
Donald says of Merisant’s flagship product Equal.
Merisant sells 18 other brands in more than 100 countries, he says.
With gross revenue “in the $400 million-range, more than half outside
the U.S.,” he expects the company will enjoy double-digit sales
growth in its Asia/Pacific and Latin American markets, and “high
single-, low double-digit growth in Europe.”
To lift Equal in the U.S., Merisant is planning to kickoff an integrated
campaign of promotions, advertising and events this summer.
“The challenge in the U.S. is that most people think they know Equal
because they see it in restaurants,” Donald says, “and they think
you can only use it in coffee and tea. Our task is to help people
realize that with Equal they can have the food and drinks they love
taste the way they want those foods and beverages to taste, in a
way that’s better for them. You can use it in pie, cheesecake and
on cereal or fruit...salad dressing. It’s great in smoothies.”
Thus, Donald calls Merisant “a quality of life company.”
Like the merchandise, Donald has roots in life sciences giant Monsanto.
When Monsanto acquired G.D. Searle to crack into health care in
1985, NutraSweet—the aspartame-based ingredient that makes Equal
sweet—came with the deal. NutraSweet Co. was broken out as a separate
entity in 1986, and sold to the Merisant investment group in 2000
for $570 million.
Investors include the $1 billion Pegasus Capital Advisors, tech
guy Michael Dell’s MSD Capital, and Mexican-based Brener International.
Management’s stake is in double digits, Donald says. “We’re planning
to stay private but things change all the time,” he adds.
Donald started with Monsanto in industrial chemical sales in 1977.
He also earned his B.S. in mechanical engineering from Washington
University that year. It went nicely with his B.A. in economics
the year before from Carleton College, a highly-regarded liberal
arts institution in Minnesota. In 1980, he completed his MBA from
the University of Chicago with a concentration in finance and international
By 1998, Donald rose to senior vice president at Monsanto with worldwide
responsibility for growth, globalization and technology initiatives.
As president of Monsanto’s $4 billion global agricultural sector,
he had also overseen the introduction of their first biotech-related
crop protection products: Round Up-Ready soybeans and BT cotton.
A $400 million company with 700 employees operating in more than
100 countries is hardly a garage-based start up. But for many, a
private equity venture might look too risky compared to a successful
23-year corporate career. Not Donald.
“I loved my time at Monsanto,” he says. “I wasn’t motivated to leave,
but my friend from engineering school, Andy Bursky, wanted me to
do this with him. At first I wasn’t interested, but he kept talking
about it, I thought about it, and finally decided to do it.”
Donald says he had at least three good reasons: “The first reason
is that these are great products that add to the quality of life
for people. Secondly, we could build the kind of company we dreamed
about because it’s small. Will we be successful? Time will tell.
Third, it was a new and different environment, and working on new
and different things
He found appeal in broader horizons, too. “Monsanto developed transforming
technology. That was wonderful. But now everybody’s technology
is available. I can do everything...outside board memberships, venture
interests consistent with my partners’ interests.
In one such pursuit, Donald is working with his Pegasus colleague
Bursky to assemble $200 million in investment capital to take positions
in companies “encompassing all life sciences...bio-informatics,
plant biotech, nutrition and human health areas that people in this
space conventionally invest in.
“The preliminary response is very encouraging,” Donald says, adding
that two-thirds to three-quarters of the funding will come from
outside St. Louis. “But we need a commitment here because our purpose
is to accelerate the BioBelt in St. Louis...and generate a handsome
return for our investors, of course.”
Donald is also on the board of GenAmerica Financial Corporation.
That company’s president and CEO Kevin Eichner says, “Arnold strikes
me as the kind of person who wants to put his own stamp on something...his
whole stamp on something a little smaller than a partial stamp on
something much bigger. I can understand that.”
Six of Donald’s nine St. Louis-based Merisant executives apparently
understand, too, having left Monsanto’s agriculture company to join
him at the new outfit.
Karl Sestak, vice president of communications, was a 15-year veteran
at Monsanto. “These are people who had been with a large corporation
forever, at the top of their game with a lot going for them,” he
So why the dramatic departure? “People love to work with Arnold,”
Eichner echoes Sestak: “Arnold Donald is a neat guy...very bright,
very gracious. He has an accommodating style. He’s the type of person
who is an excellent leader...that smart combination of strength
and empathy that I think resonates with many people.”
Jo-Ann Digman, Merisant’s vice president for external relations,
had been part of the government relations team for Monsanto’s agriculture
company. “Coming over wasn’t really risky when we analyzed it. It
was all upside: an established product with great market share and
potential to grow.”
Donald points out, for instance, that Equal is in only 50 percent
of American restaurants and less than 10 percent of households.
Digman says she found it appealing to have an “opportunity to be
more actively involved in a variety of things, whereas before I
was pretty focused exclusively on government relations.”
She is also president of the Equal Sweetener Foundation, which funds
diabetes awareness, research and education.
“The reality is that there is an epidemic of diabetes in the United
States,” Donald says, “with 800,000 new cases diagnosed every year.”
That’s an audience Merisant and Donald aren’t ignoring.
“Our ability to metabolize glucose often becomes impaired as we
age,” he says. “And while diabetics are at the extreme end of this
spectrum, this is an issue that is important to all of us.” For
many people then, including people with diabetes, Equal is a passionately
“Wherever you use sugar, where sugar isn’t providing bulk or structure,
you can use Equal,” he says.
So it works in cheesecakes, but not wedding cakes.
Besides correcting the coffee-and-tea-only misperceptions of Americans
who Merisant marketing people call “already listenings,” recipes
are an important vehicle that Donald expects to ride to increased
sales in the United States.
“We want to get those who use Equal to use even more, for a diverse
diet with lots of great tasting food,” he says. “Use it in cooking
and baking...wherever you’re looking for the taste you love without
increasing carbohydrate intake. We have hundreds of great tasting
recipes on our website at www.Equal.com.”
Merisant also aims to increase “pantry sales.” Donald says, “This
is the most fun: Almost everyone has salt or ketchup in their homes,
whether or not they use it themselves. They have it for guests.
Well, everyone knows somebody who loves Equal, so I think people
ought to have at least one box in their homes for the people they
care about. Most people know someone who is diabetic or dieting
or who just prefers Equal.”
Donald is also adamant about encouraging restaurants in Merisant’s
hometown—St. Louis—to use Equal. “If I’m in a restaurant that doesn’t
serve Equal,” says Donald, “I’ll ask to speak to the manager or
owner. Almost always by just asking and explaining the benefits,
they’ll make the switch and carry the brand.”
Merisant also has some new products in the pipeline, but Donald
emphasizes that future developments will continue to center on the
current Equal brand formulation: “It’s the same stuff as in fruits
New Merisant product introductions include chocolates in Belgium
and a powdered soft drink in India.
Asked if the name Merisant had any particular meaning, Donald jokes
that it enjoyed a special virtue for a company conducting business
in more than 100 countries:
“The name has been researched all over the world in hundreds of
languages and dialects. This one cleared as not being offensive.
But the name of the company is less important than the name of the
brands, by far. The brands are everything.”
While Merisant, the Equal holding company, is based in St. Louis,
it has close to 300 employees based in Chicagoland, engaged in operations,
finance, marketing and manufacturing.
But Donald expects that the inner circle will stay in St. Louis
“because this is where we want to live. It’s one of the prerogatives
of being an owner. The quality of life is good, we love it here,
and the business can be managed from here.”
Besides, he continues, technology helps a lot. “I can stay connected
wherever I want with things like video conferencing, e-mail, cell
phones...all that stuff. I’m in Chicago at least one day a week
and it’s easy to get to from St. Louis. Besides with partners in
Connecticut, banking relationships in New York and investors all
over, the central location is good.”
Donna Wilkinson, president of Wilkinson Group specializing in strategic
fund raising planning, is convinced New Orleans native Donald really
loves St. Louis. She recruited him to the board of the Opera Theatre
of St. Louis in 1996. “A lot of people would have seen a change
in their lives like Merisant as an opportunity to withdraw from
their commitments. But in spite of all the extra work, he chose
to be even more involved by joining the Science Center board. It
shows his deep-seated dedication to making St. Louis the best community
it can be.”
She adds, “The Science Center is a natural position for him with
the new company. He was one of the architects of the new strategic
plan that advocates a commitment at the center to life sciences.”
His other volunteer leadership includes serving on a couple of boards
at Washington University, the United Way of Greater St. Louis, the
Saint Louis Art Museum, the Missouri Botanical Garden and the RCGA.
His corporate board memberships include Crown Cork & Seal Company
Inc., Belden Inc., Carnival Corporation and The Scotts Company.
At GenAmerica, Eichner is impressed by Donald’s perspicacity: “When
we were having orientation for new directors last fall, he picked
right up on the three most significant issues during our preliminary,
general discussions...before we explicitly laid them out.”
Eichner also likes Donald’s balance. “He’s not afraid to ask the
good question, the tough questions. And while he’s also very supportive
of management, he’s definitely his own man and an independent thinker.”
Wilkinson adds, “He’s a strategic thinker with a keen sense of marketing;
he’s demonstrated that. He’s very proficient at articulating goals
and planning a course of action to achieve those goals.”
She says that as co-chair of the Opera Theatre’s 25th season celebration
in 2000, Arnold played an extremely active role in raising $1.8
million to match a Ford Foundation grant. “He’s very much a natural
leader and also a member of the team, willing to shoulder his share
of what needs to be done.”
Kevin Kipp runs Bubble Communications, a creative services and
community relations firm in St. Charles.
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