Popcorn Lessons for Silicon Valley
What's the difference between Van Buren, Indiana, and Santa Clara
County, California? For starters, little Van Buren, 80 miles north of Indianapolis, is home to Weaver Popcorn, while sprawling Santa Clara County houses many of America's premier semiconductor firms. Yet Van Buren's Weaver could teach a thing or two to California's technology hotshots.
Silicon Valley semiconductor makers are superb inventors, but they haven't taken customers, manufacturing or the people in the plants all that seriously. Instead of intently prowling customer operations and factories, the valley's leaders and their lobbyists now prowl the halls of Congress, begging for relief from Japanese competition. They got their wish on April 17 (I call it Black Friday), when retaliatory duties were imposed on various Japanese electronic goods.
I don't necessarily deny the semiconductor industry's latest charge sheet against Japan. But the Japanese hardball competitive ploys wouldn't have brought U.S. chip makers to their knees if they had done their customer and manufacturing homework a decade ago.
Which brings me back to Van Buren. Weaver Popcorn, you see, is proud owner of 60 percent of the Japanese popcorn market! The company's approach proves that America can compete anywhere. In a nutshell, what Weaver did, Silicon Valley didn't do.
The 59-year-old firm has become the biggest popcorn producer in the world. Weaver's hallmark is, and always has been, premier quality. Weaver has become the unquestioned leader in genetically producing specialized popping corn. Its close cooperation with independent farmer-suppliers ensures top-drawer supply to Weaver's spotless factory, where highly committed people do the rest.
Weaver has sold a lot of popcorn overseas, but had not considered the Japanese market until three and a half years ago. It departed from American traditions from the start. That is, Weaver's executives were patient, as they made endless visits that others (perhaps the Silicon Valley sorts) would have called fruitless. They built relationships with distributors the only way it can be done—by spending time.
After a year and a half, Weaver finally earned a few small orders to Japan. Yet one of its first batches, Weaver's and the U.S.'s finest, was rebuffed. The reason was a blow to Weaver's pride: unacceptable quality.
American purchasers of bulk popcorn usually take a few, teacup-sized samples from any order and give them a cursory look. The Japanese hand-inspect several hundred pounds of new orders. They found impurities in the early Weaver orders. Many American businesspersons believe the Japanese keep looking for flaws, inventing insurmountable barriers—so this is just one more ho-hum example of Japan's closed minds and closed markets. Or could it be one more example of the island nation's passion for
Weaver was challenged, not insulted, by the Japanese distributor's response. It didn't demand a recount; it instantly recalled the entire order, shelling out a substantial $65,000 without flinching (at least publicly). The move was another departure from American standard procedure, and it was well received with the ultimate accolade—Weaver's Japanese distributor told the firm's international boss, "You reacted to that problem the way a Japanese company would have."
Weaver did not stop there. In 1985 the small firm bought a $500,000, uniquely advanced optical inspection system. This clearly was not needed for the less fussy U.S. market, where Weaver's quality was tops already. But Weaver took the leap—and won the market. The Weaver story is a tale of what can be—a tale for Santa Clara County and for Detroit.
Weaver began with patience and relationship building, and no guaranteed payoff. When confronted with a problem, it did not run to Washington and demand an investigation. This is the beauty of a small company; it has no political clout, so it must be resigned to addressing the true business problem. Weaver translated its problem into a challenge and then an opportunity. In fact, the problem yielded a second happy ending, because Weaver's latest quality plateau is now reaping benefits in America's new quality-sensitive microwave popcorn niche, the fastest-growing segment in the industry.
Santa Clara County's performance is further eclipsed by an unsung bright spot in U.S. semiconductor production. Some 2,800 miles from the homes of the Silicon Valley's flamboyant inventors is the town of Essex Junction, Vermont, where an IBM plant makes so-called commodity semiconductors for internal use, which match Japan's in quality. At Essex Junction, which resembles Van Buren more than Santa Clara, the manufacturing discipline is cherished; people in the plant are treated like first-class citizens.
America can compete. Van Buren and Essex Junction know the way. Santa Clara County doesn't seem to. Perhaps it will learn before it's too late.
(c) 1987 TPG Communications.
All rights reserved.