When AWG President and CEO David Smith retires at the end of the year, his successor will step into the leadership role well prepared to steer the company into the future.
Dan Funk, incoming president, has been working with Smith for several months preparing for the transition. Even before being named as Smith’s successor, the two had worked closely together, with Funk serving as chief operating officer since 2020.
Smith has termed Funk as “wicked smart.” He said Funk’s background in merchandising and operations “far exceeds anything that I’ve ever had. I’ve worked with him for 12 years, and I know what he’s capable of doing. He, along with the rest of his team are going to achieve much more than we’ve ever achieved.”
Funk joined AWG in fall 2012 and led its VMC subsidiary before moving into merchandising, procurement and marketing roles on the AWG side. When Smith was named CEO in 2015, Funk took a lead in merchandising, procurement and supply chain before being promoted to COO.
Funk, who grew up in a small town in North Dakota, began his career working at an independent grocery store while in high school. In college, he was employed by a large retail chain and worked after graduation with two different competitive wholesalers.
Funk said a “disproportionate” amount of his time has been spent in wholesale, supporting independent retailers across the country.
“That’s been a big part of my history, with a lot of corporate responsibilities over the years. It’s definitely in the blood, and it’s something that I’ve enjoyed doing and being part of.”
At AWG, Funk said it is important to understand what’s going on in the stores to be able to help its members to be successful.
“You also have to run the business that you we’re challenged to run every day. I’ve been fortunate to have roles of different responsibility in a lot of different areas. I think of it more as just being fortunate to be able to have a lot of different opportunities over the course of my career that have really gotten me to this time, to be in a position to try and help our members be successful and our team be successful going forward. That’s going to be the fun part and the part that I’m most excited about.”
Funk said, first and foremost, he and the rest of the executive leadership team are focused on a successful transition as Smith retires and he moves into that role.
“We’ve done a lot of work on building up our executive leadership team here in the back half of the year.”
This includes the recent additions of Derek Jones as EVP, division operations and James Neumann as SVP of special projects.
“We want to get through that [transition] to have our company prepared, both from the division level and the corporate level, for our company and the stores moving forward.”
CFO Gary Koch said Funk is “extremely intelligent about multiple facets of the business. I think he sees us needing to continue to grow in the right way and take advantage of opportunities, and maybe create some of our own opportunities, to expand both geographically and maybe in some product lines.”
“I think we are definitely going to continue this upward trajectory that we’re on. The momentum isn’t going to slow down at all. I really believe he’s been looking forward over his career to become the man in charge. I think he’s really, really well prepared to lead us.”
Koch said Funk will stay committed to the membership, and that’s one of the reasons the board selected him for the top role.
“We like stability. I like to say we’re volatility intolerant. We like the steady and improving results.”
He also said he believes Funk will be able to take up Smith’s mantle of advocating for independent grocers.
“I would sure hope that he’d be … continuing AWG’s proud tradition of not only participating but actively leading on various initiatives in the trade. AWG really stands for helping the independent grocers, whether we’re shipping to them or not.”
“David’s been very vocal on that, especially with NGA, on the power buyers and wanting to make sure that we are not being out-leveraged or being looked at as a channel that shouldn’t get all the opportunities that other channels get. I think Dan’s going to step right in and be that voice or be one of those voices … Dan is well suited to be very helpful, and obviously very intelligent about all the facts and what it really means to the independent grocer.”
Chief Information Officer Shelly Moore is excited about Funk moving into the president’s role.
“I think Dan’s got just an incredible background – his merchandising experience, his focus on products and innovation and how we work with our suppliers. I think the additional structure in his background, from some of the large companies that he worked with, is very positive for the growth trajectory that we’re on. He brings some of that structure and order and large organization experience. It will certainly be a transition.”
Moore said she sees growth in the future for the wholesaler and its members, who have put their trust and confidence in AWG. “I certainly think that paints a picture of a trajectory for growth. I think that’s a critical piece of our future.”
Along with growth is an increase in efficiency, evidenced by the company’s “technology transformation” and the all-in-one warehouse in Hernando, Mississippi.
“It sets the stage for a future of driving that efficiency and, quite frankly, managing what I call workforce shifts and workforce transition in this country. These are very, very physical jobs, lifting tens of thousands of pounds on any given day. They are just very physical jobs that we’re seeing a workforce in this country not be as interested in, even though they’re great jobs.”
Moore said she sees automation as a path to the future, “making sure that we can support our members and we can get critical groceries and supplies to all the towns and cities that our members service and supply … I see a continuing trajectory for technology transformation that’s going to make not only AWG more efficient but make our members more efficient and our suppliers more productive.”
She said another area that sets AWG apart is customer service.
“I do believe our customer-first centricity is something that sets us apart. And quite frankly, the collaborative model that we run in, where we feed the hand that feeds us, it’s just an incredibly powerful business model. I spent most of my career in public companies, with Wall Street and shareholders to please, and this model definitely drives a different mindset in terms of our focus on the customer.”
Emile Breaux, SVP, chief sales and support officer, also sees a strong future for the company going forward.
“Dan’s probably one of the smartest guys I’ve ever met. He can remember the intimate details of discussions, and he knows his numbers as cold as anyone. I think he is a very well-suited candidate to pick up that role from David. He certainly brings a unique set of experiences, very different than David … I think Dan’s background, experience and really where his passion lies is going to serve AWG very well.”
Breaux said AWG will be leveraging “to the highest degree possible all the benefits that this new automation initiative’s going to put in front of us.”
“There are just countless projects currently in flight. We have retail pricing programs that are in the process of being rolled out on next generation platforms with new capabilities … It makes your head spin, the amount of technology that’s going into this business in the initiatives that we’re trying to move forward at this point … We think that this is the best platform for independent retailers to leverage scale so that we can compete at the national and the global level.”
Tye Anthony, AWG’s SVP of merchandising, said the executive team members are “just as excited about having Dan now sitting in that chair as we’ve been about David.”
He said Funk brings a different perspective and is a “great inclusive leader.”
“We’re excited to turn this page in the next chapter. We all have a high degree of confidence in his knowledge of the business and the way he can lead AWG.”
Anthony noted that AWG has had many great leaders who all have brought different strengths to the role.
“Certainly, Dan will bring many positive things to the table that will benefit AWG in the long term,” he said. “I think, as much as each one of those leaders have been different in their styles and their approaches, one thing has remained consistent. Every one of those leaders has been extremely focused around the success of our members. That’s been the common denominator.
“Dan will be no different. He grew up in a family that was entrepreneurial and independent … He understands the needs of the independent retailer well.”
James Neumann, SVP of special projects at AWG and former board member, said while it is tough to follow someone as “revered and well thought of as David Smith,” he believes Funk is up for the challenge.
He pointed out that Funk was instrumental as COO in getting the company through the COVID-19 pandemic, getting the all-in-one facility open in Mississippi and in the expansion in the Upper Midwest.
“Dan really was the glue that held together all of our operations. Because he’s not in the limelight, I think a lot of people … just don’t know Dan as well as they know David. He has a wonderful, caring personality. He’s deeply invested in this co-op.
“I don’t know that I’ve ever met a smarter individual in this industry. His ability to process analytically, look at the numbers to get a pulse for operations, is second to none. I have never seen anyone who just can dissect and understand how all business units are operating … He’s truly a full package.”
Neumann said while Funk is more analytical and methodical than Smith, he still has great vision.
“He’s always going to have his pulse on things because that’s how he’s wired. He’s always looking analytically and objectively on how things are running. But by having someone of Derek [Jones’] caliber to come in and really take that load off of him, you can see a different Dan already, because he’s starting to move into that next chapter of his life and leadership by being able to give up some of that in the weeds, operational oversight.”
Neumann said he, along with Funk and other members of the ELT have been accompanying Smith on “the Rolling Stones farewell tour of food shows.” At the events, he said Smith has continued to reiterate the fact that during his time with AWG they have never had “a better balance of leadership and depth of bench to continue to propel this co-op going into the future.”
Neumann said in the last three to five years, the board has focused on developing that bench strength and talent “because we had such a rapid expansion, going from three to five, then five to seven and seven to nine distribution centers. We really spread our team out and didn’t have a lot of backfill. Now we’ve made a conscious effort, through our HR department and Pat Reeve’s leadership and his team, to go back and really streamline and update our talent evaluation and acquisition initiatives, as well as retention and getting highly motivated folks in the right tracks of training to be able to move up and backfill as their leaders get promoted or retire … It’s awfully reassuring when you see so many names of people that are ready for the job today, ready for the job within 12 months because of how we’ve overhauled our retention process and our training and promotion processes here at AWG.”
AWG’s member retailers also are optimistic about the future of the co-op under the new leadership.
David Ball, owner of Kansas-based Balls Food Stores, which was a founding member of the co-op, said he is excited about the future growth of AWG.
“It really looks good. I’m glad I’m an AWG member; always have been.”
He said the “very diverse executive leadership team” is capable of overcoming any obstacle.
“We have a very unique team. We have a lot of seasoned veterans, plus we have a good mixture of new, innovative, aggressive young people that are excited about the future of AWG.”
Ball added that the board of directors also is diverse, comprised of single-store operators to multi-store operators. He said of AWG’s co-op model, “it’s all for one, one for all. The single-store operator has all the same services and benefits and buying power that the 50-store operator has. It’s hard for people to understand that. And we’re very transparent. We’re open book.
“The leaders of AWG listen to the membership. You don’t have to be on the board to voice your opinion. They listen, and they’re there to support you … Their main job is to support the stores … The retailer has to be successful first, before the wholesaler can be successful.”
Steve Edwards, owner of Arkansas-based GES Inc. (Edwards Food Giant and Cash Saver supermarkets), said he also believes Funk will do a good job heading the company.
“I think having somebody from within, that knows how the members expect it to be operated, that’s going to be a big plus as opposed to bringing somebody in from the outside. And he’s got a great team. There’s a lot of good people in place there in Kansas City.”
Brad Ramey, owner of Ramey’s Marketplace in Mississippi, said he is confident in the future of AWG.
“Dan’s been there long enough, and he’s been under David long enough. He’s just a good man.”
Harps Chairman and CEO Kim Eskew said he believes Funk will do “a great job.”
“Dan is different from David. I’m different from my predecessor. That’s just the way life is. Hopefully, you surround yourself with the right people, and I know Dan will do that, who will complement him and that will allow AWG to continue to grow and be successful going forward. I think the days ahead for AWG are really bright.”
The vendor community also is confident about AWG’s future.
Denny Belcastro, VP of industry affairs and customer development at Kimberly Clark, said Smith has done “a marvelous job” picking his successor. He knows Funk well, as they co-chair FMI’s Industry Collaboration Council.
“He is a terrific listener, to understand how things work, always trying to find a way for what I would call the win-win approach to things but also keeping the priorities of his retailers top of mind, trying to get suppliers to push a little harder, grow a little faster and get a little closer to what AWG is trying do.”
Referring to AWG’s new all-in-one warehouse in Hernando, Mississippi, Belcastro said Funk has been instrumental in keeping manufacturers informed and educated on how that will benefit their business long term.
“I think he is a perfect choice. You don’t ever want anyone like David to leave, but I don’t think he could have picked a better person than Dan to replace him.”
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