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‘The last year’s been the longest decade of my life’: See’s Candies CEO

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See's Candies CEO Pat Egan joins Yahoo Finance's Berkshire Hathaway annual meeting pre-show.

Video Transcript

JULIA LA ROCHE: Well, I'm pleased to bring to you all this conversation with one of our very favorite foods at the Berkshire Hathaway annual meeting. That is See's Candy and its CEO, Pat Egan. See's is celebrating its 100th anniversary this year. Pat, so great to have you join us. Of course, we wish we could be in person, but great nonetheless.

PAT EGAN: I wish I could be there too, Julia, and thanks for the opportunity. We're looking forward to hopefully next year, coming back. But as I said, Omaha is always a big deal for us, so we're going to miss it. But hopefully, we're back there next year.

JULIA LA ROCHE: Yeah, I certainly hope we're back next year. And of course, we're so used to seeing tons of candy at that booth in Omaha. And I think a lot of folks are interested, Pat-- how has business been for you all in the last year?

PAT EGAN: Well, I like to say the last year's been the longest decade of my life. We've been through a lot. Last year, it's a tale of a couple of different quarters. So the first quarter was tremendous. We started off really hot at the beginning of 2020, and we ended pretty good. The second and third quarters, we essentially-- in the middle of March when this first really hit, we shut down all of our stores in the span of five days. So about 245 stores we closed in a matter of days.

And then about a week and a half later, we closed our e-commerce fulfillment center down in Southern California. So for a period of time there, we essentially completely stopped. And the reason for it was we operated and are headquartered in the Bay Area, and that was one of the first orders that was issued nationally. And so we respected and stopped, and then we went through all of the states that were successively-- that week, actually-- shutting down.

So from that point forward, what we did was we just said, we're not going to reopen stores or reopen our plants until we can create a safe operating environment for all of our employees. That took a while. And by the time we restored at the end of the summer, we saw customers coming back in. But for that period of time, it was pretty rough.

JULIA LA ROCHE: So how about right now? How are things for you all? How are you store reopenings? I suppose you're probably doing a lot of business online. I know all around Valentine's Day, I was looking on your website to order some candies for some of the special folks in my life. So how are things now?

PAT EGAN: Well, thank you for your business, Julia. It's great. We're fully back, I believe. We've had our best January ever, our best February ever. We just completed our best first quarter ever. And as you mentioned, e-commerce-- we had a great growth last year. We grew about 70% just in looking at total packages shipped. And what you might expect would be that when the stores reopened, that that would trail off a little bit. It hasn't.

Our first quarter, we were up almost 160% over the first quarter of last year. So what we've seen is the traffic coming back into stores. And it's been gradual, but we're almost back to 100%. But our e-commerce, which has more than doubled, has actually stayed at that level. And we're just fine with it not coming back to Earth. It creates some different operational challenges, but we've definitely expanded our customer base.

JULIA LA ROCHE: One of the things that's really interesting about See's-- it's a 100-year-old company. And one of the things I know that you've talked about in the past is the customer service in the stores. And Pat, you come from an energy background. And the last time we talked to you was at the annual meeting in 2019. You were just a few days on the job, now a couple of years on the job. So coming into retail, what has been some of the biggest, I guess, takeaways for you, some of your biggest learnings in your role?

PAT EGAN: Well, a couple of things. You mentioned our focus on customer service. I feel so fortunate-- I pinch myself all the time that I'm part of this business. Our products are tremendous, and our customer service is amazing. We really want to make sure that when customers come into our store, that they leave with a smile, and that they're happier than when they started. I like to say we sell joy.

So my background and energy is a little different, no doubt about it. But I learned so many good lessons there that I think, I hope, have served us well here, and that is that it's not easy to make an energy customer happy all the time. When you're interacting with them, it's usually about a bill, or you've had an outage.

And of course, we try to make both of those things as minimal as possible. But I really worked very hard with a great team there to focus on what does the customer need. And I will say, that is the Berkshire way, and that's part of what I'm proud about. And I can see the transition from energy into candy-- the common thread is that we take care of our customers. And See's has done it for a century now and done it tremendously well.

JULIA LA ROCHE: It is interesting-- Warren Buffett's management style a very hands-off management style for the various portfolio companies. But I imagine when we think about Buffett-- he often talks about wanting to be remembered as a teacher. What's been the most important lesson you've learned from Warren?

PAT EGAN: Integrity. I regularly review his quotes. You're right-- he's hands off, but he's very efficient and very effective in conveying the message, which is do the right thing, take care of the customer, and take care of your employees, and the results will follow. And I had the great fortune of working with Greg Abel in the energy business, and he is very much a devotee of that.

And so just living up to that and making sure that we follow through on those principles is first and foremost. And as a teacher, he leads by example all the time. He's very focused on getting the right outcome, certainly, for our customers. I think he's a great citizen of the country and the world and a great leader in that regard. But boiling it down to the simple, what are the results, and how are you getting there, without getting too cute about things and making sure you're focused on the right things.

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