Cargill's ex-CEO 'DMac' reflects: 'The next 10 years will be far more volatile'

When Dave MacLennan first joined Cargill Incorporated's eight-person leadership team in 2008, half of its members had the same first name as him.

"It became confusing," he said. That's when one of the other Daves first called him, "DMac."

The moniker not only stuck but spread — with MacLennan encouraging it.

Inside the nation's largest private company, people at all levels of the organization call MacLennan — who served as CEO for the last decade — by this nickname.

"I like the informality of it. I like the approachability," MacLennan said. "Some people do not call me that, but most people do, and I like it. The board does, the [Cargill] family does."

His preference for personal over punctilious in many ways matches Cargill's enigmatic presence in the world. The company prides itself on its handshake-like culture (company leaders are often heard reciting its mantra: our word is our bond), and yet Cargill's influence is undeniable.

MacLennan, 63, stepped down from the CEO role on Jan. 1 after leading the agribusiness behemoth through some of its most dynamic years of change. He remains executive chair of the board during the leadership transition.

In his final media interview as CEO in December, MacLennan told the Star Tribune the last three years, more than any other point during his tenure, were among the wildest in the company's recent memory. He predicts his successor, Brian Sikes, will have to navigate an increasingly unstable world.

"If you think about 1990 to 2020, things were relatively calm. The world is now reverted to the history of the world, which is geopolitical conflict, armed conflict, pandemics," MacLennan said. "I think about the Cargill Brian is inheriting today: It's bigger, it's got a different portfolio of businesses. The world is different. Look at all that's happened."

COVID-19, inflation, Russia's invasion of Ukraine, U.S. political uncertainty and the threat of famine were — and remain — the major recent challenges, he said.

"The next 10 years will be far more volatile, complicated and uncertain than the last 10 years," he said. For Cargill, "it means there will be continued risk and uncertainty and opportunity for growth."

Since MacLennan took the helm in 2013, Minnetonka-based Cargill sold its energy, steel, asset management and U.S. pork businesses. It bought companies that tilt Cargill more heavily toward seafood, animal nutrition and bioindustrials (ag-based alternatives to petroleum-based products). And last year, the company made its largest-ever acquisition, buying Sanderson Farms through a joint venture with Continental Grains that created one of the nation's largest poultry producers.

During this time, the effects of food and agriculture on the environment have come more sharply into focus. The public's awareness of the interconnectedness of global supply chains, of which Cargill plays a central role, has grown more sophisticated. And, along with that, has come louder, more highly-tuned criticism of Cargill.

"[When I started as CEO], the world was talking about sustainability but not the way it is talking about it today," MacLennan said. "In 2013, there was a lot about GMOs. 'GMOs are bad.' But look today at what we are doing with sustainable agriculture, regenerative agriculture, all the ESG [environmental, social and corporate governance] metrics that are coming forward for companies. Those were just not in the corporate dialogue back in 2013."

Among Minnesota's industry titans, Cargill is second in size by revenue, only behind its Minnetonka neighbor, UnitedHealth Group. And while it maintains a lower visibility than some, it is arguably the state's most geopolitically enmeshed. It manages large and disparate operations, navigating different local laws as it moves foodstuffs from places of abundance to areas of need.

"It's sort of the world's citizens," said Doug Baker, former CEO of Ecolab. MacLennan served with Baker as a board member of Ecolab, but the two are also neighbors and friends.

"Food security is important to every world leader. If you took a year and looked at who Dave's had to go meet with and deal with, it's quite remarkable."

The company buys and sells basic staples of life — from salts to palm oil to wheat — and produces foundational elements used in an array of products, from bio-based plastic alternatives to substances used to expedite pharmaceutical delivery in the human body to ingredients for makeup and skin care.

It is one of the world's largest shipping charterers with about 650 seafaring vessels crisscrossing oceans. All of this is in addition to one its largest and most visible sectors — meat — of which it is a dominant leader.

Commodity traders like Cargill ride the waves of market cycles. The first few years of MacLennan's time as CEO saw low volatility that resulted in revenue declines for Cargill because of fewer opportunities to capitalize on those swings.

As the nation's largest privately held company, owned by about 100 Cargill-MacMillan family heirs, the outside world often speculates on its inner workings. MacLennan said the most common misperception he faced as CEO is that because it's a quiet company there is something shadowy going on.

"I think people fill in the gaps and they think private is mysterious. I don't see us that way at all," MacLennan said. "It's an unfair characterization. We just aren't going to have a big fanfare around the [good] things we are doing."

But in 2020, as the pandemic strangled supply chains worldwide, MacLennan and his leadership team made the decision to stop releasing as many financial details as they had in previous years, such as net earnings and adjusted operating earnings.

Its quarterly and annual reports were already scant on balance sheet details and this decision curtailed its revelations down to just one public number: annual revenue.

"We are private and not required to report the information," MacLennan said. "We give the info when it's needed to credit providers, etc. … But in terms of the general public, we didn't feel it was necessary."

The company's earnings before interest, taxes, depreciation and amortization (EBITDA) — often used as a measure of profitability — surpassed $12 billion for fiscal year 2022, a 28% increase over the year before, according to a recent report from Moody's Investors Service.

Such discretion is one of the perks of being private, he said.

"It protects to a certain degree the family owners' privacy. … There are publications that love to traffic in wealth — who is wealthy and who is not," MacLennan said, "Some of our shareholders are on that list and they don't want that kind of publicity."

When MacLennan graduated college, he thought he wanted to be a schoolteacher. "And I still may want to teach," he said.

Becoming CEO of a massive enterprise wasn't a goal until a few years before it happened.

"I would not have dreamed this," he said. "Maybe I didn't dream big enough. … But I don't know who wakes up and says, 'I want to be a CEO someday.'"

Those close to MacLennan say he was never comfortable with the often-stilted sense of deference and white-glove treatment afforded CEOs at organizations as large as Cargill.

"I mean, he drives a Ford," Baker said. "On-brand for Dave is no brand."

Pete Richter, Cargill's chief customer officer and MacLennan's longest tenured direct report, said, "He hated that stuff, that formality. There's always a period after anyone gets promoted when they are a bit self-absorbed. He almost did the opposite."

Employees would drop by the C-suite to offer MacLennan feedback, Richter said, "and you wouldn't believe the things people told him to his face."

You need a haircut. Your pants need to be better tailored. I don't think you're doing a good job.

"He doesn't take himself too seriously," Richter said. "He's very serious professionally but not personally. More than willing to make fun of himself in front of a room full of people, which makes him incredibly endearing."

April Nelson, global lead for Cargill's crisis and media communications, remembers a time when a colleague had a child with "some science support." After the birth of the child, MacLennan asked the colleague whether Cargill's benefits were good and whether they could be improved to better support the fertility process.

"Seeing your CEO bring his whole self — talking about his kids, his wife — as a woman, was really good as I tried to raise a family and have this big job," Nelson said. "It sets such a tone for others."

While MacLennan preferred familiarity over formality, he was uncomfortable when criticisms of Cargill turned personal.

With the company's tentacles in so many areas, there are countless opportunities for misstep or critique — from a Supreme Court case that alleged Cargill and other chocolate companies were complicit in buying cocoa beans harvested by child labor, to intensifying pressure to expedite zero-deforestation commitments in its Brazilian soy supply.

In MacLennan's decade leading the company, Cargill faced accentuated criticism from environmental activist groups. It drifted into the personal, at times frustrating MacLennan, according to friends, colleagues — and even himself.

"That's a dynamic that's emerged in the last nine-10 years; it's a tactic that's happening everywhere, which I'll call the personalization of protest," MacLennan said. "NGOs using direct personal attack on people, and frankly their privacy, to get their ends rather than focusing on the institutions."

A blistering report in 2019 from a frequent critic of the agribusiness, titled "Cargill: The Worst Company in the World," plastered MacLennan's face across its pages. The NGO concluded that while the CEO appeared earnest in his desire to end deforestation in Brazil's Cerrado ecoregion, he wasn't acting quickly enough.

The group staged a protest outside his Edina home on Halloween night, holding up profanity-laced signs, as little kids walked by while trick-or-treating.

"I think it is destructive, I don't agree with it as a tactic," MacLennan said, "but NGOs would argue, 'Hey, you're in a position of responsibility and to divide you as a person from the entity that you lead, sorry, you don't get that choice.' I think it's something that's here to stay, but I don't think there's anything that can prepare you for that."

MacLennan said change takes longer than people expect.

"You can never do enough when it comes to deforestation and the environment," he said. "I think no CEO should ever sit here and say we've done enough."

He added: "There's an impatience on certain external parties, NGOs and certain political leaders, that it should change tomorrow. It doesn't work that way. ... Good change takes time."

MacLennan reminded Cargill employees that the pace of technological change was accelerating and the company needed to more quickly adapt. But that doesn't mean MacLennan made all his decisions fast.

"There was an impression of him not being able to deal with decisions," Richter said, "but I learned over time that Dave often just needed to stew on things. Then, when you get a response, the depth was astounding. He had very few frustrations, but one thing he couldn't stand was when people in meetings had an answer quicker than he thought they should."

When asked whether Cargill and its industry peers are doing enough to address climate change, MacLennan responded: "Ag and food can't solve climate volatility by itself. We can be part of the solution, we are part of the issue. ... The question is how much belief there is from the consumers because ultimately they are going to drive the supply chain based on their buying habits."