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SAN ANTONIO — In the course of a career that has spanned more than 33 years, Martin Otto has filled key leadership roles in virtually all of the major functional areas of one of the country’s premier food retailers, H-E-B. His success has paralleled that of the company, which has grown steadily and won wide recognition for its excellence and a rare level of affection and loyalty from its customers.
However, Otto’s contribution goes beyond his company and even his industry. During his tenure as chairman of the National Association of Chain Drug Stores in 2016-2017, Otto brought a broader perspective to the trade group that viewed the pharmacy business within the context of an entire health care industry that remains, he says, an existential crisis for the United States. While he relinquished the position of chief operating officer at the end of 2022, Otto continues to advise about H-E-B’s health and wellness program, as he has done for 14 years, because of its importance not only to the grocer but also to the country.
In recognition of his achievements as a corporate leader and for his continuing efforts to raise awareness of major societal challenges, MMR is honoring Otto with its Lifetime Achievement Award.
After graduating from the University of Virginia, Otto worked in real estate finance for four years before deciding to go back to school to obtain an MBA at Harvard. While at Harvard, he took a retailing course that quickly settled his career path.
“I was also influenced by things I had done since I was a kid,” he recalled. “I love food, and I always have. I always liked being on my feet; I like variety. I like working with products and people and analysis. The thought of being in a career where I could put all that together pointed me in the direction of general management, and then in the direction of retail.”
After a Harvard professor recommended that he consider supermarket retailing, Otto interviewed with H-E-B and received a job offer. The interview process hooked him.
“I think I met with six different people, and I really enjoyed my conversation with every one of them,” he said. “I loved the passion they had for the business and the values they held dear in terms of people and excellence and teamwork and integrity.
“And I loved the store folks whom I met. Their spirit was unique compared to what I saw elsewhere in retail, or in general. What really sold me was that I was told that I would have an opportunity to run a store, which is what I really wanted to do.”
Consequently, Otto joined the company in 1991 as a management trainee and immediately began his ascent through the operations management ranks, eventually achieving the role of regional vice president and general manager. Otto led several operating districts and regions spanning much of Texas, including San Antonio, Austin, North and West Texas, Houston, and Central Texas.
In 2004, Otto was offered a chance to join the merchandising organization as senior VP of grocery procurement and merchandising. “I jumped at it,” he remarked. “I remember telling my wife, ‘I just got the luckiest break of my life,’ by having a chance to take on that role, and I immediately fell in love with it. What’s so important in the merchant’s role is, I think, it has to start with a love for the product. With that as a foundation, you can apply your imagination and creativity to help make the company the best choice for our customers.”
While continuing to lead the Grocery team, Otto got a chance in 2005 to exercise his financial skills when H-E-B named him chief financial officer. In 2010, he was appointed chief merchant while retaining the role of CFO, a highly unusual combination that testifies to his versatility and the range of his skill set.
Otto noted that the transition from overseeing one of the operating regions to a leadership role in merchandising was greatly facilitated by the fact that H-E-B’s merchant team was so outstanding. Additionally, the years spent working in the stores had given him ample experience to know when a merchandising program will work as intended when it hits the sales floor, and when there might be issues to overcome.
His broad experience in operations, merchandising and finance made Otto a natural choice as chief operating officer in 2017. His appointment also put him in a pivotal position to help lead the company’s drive to become a leading player in e-commerce and in digital technology, which was about to accelerate dramatically. A series of strategic investments laid the groundwork for transformational changes.
In early 2018, H-E-B acquired Favor Delivery, an on-demand delivery service based in Austin (Otto is currently executive chairman of the wholly owned subsidiary). The transaction greatly enhanced H-E-B’s delivery capacity and added muscle to its omnichannel capabilities. But it also brought H-E-B Favor’s significant customer-facing digital expertise.
“We had gotten into the curbside e-commerce business, and were beginning to get into delivery because it was important to our customers,” Otto explained. “And acquiring Favor was a way for us to accelerate that very quickly. In addition, we weren’t yet as adept at developing customer-facing applications, so acquiring Favor brought that skill set to us and accelerated our progress. To have that kind of expertise has given us a level of flexibility that’s very valuable.”
Other investments included opening eight e-commerce fulfillment centers between 2018 and 2024. In 2019 the company opened a state-of-the-art technology hub in Austin that serves as the headquarters of Favor and also houses the H-E-B Digital Partners (employees) team. The dynamic facility, which features a lounge area and a large events space, was a converted warehouse.
The company’s approach is working. In addition to steady top-line growth, the retailer is getting high marks from consumers. In 2023 H-E-B was once again named the nation’s top grocery retailer in an annual consumer survey conducted by research firm dunnhumby. The company had taken the top spot in 2020 as well, followed by second-place finishes in 2021 and 2022.
The company has also won recognition as an outstanding employer, based on employee reviews on Indeed, a popular job listing website. The values that have made that kind of recognition possible began with the founding Butt family and the culture they established many decades ago, Otto said.
“H-E-B seeks to serve all of its constituencies,” he elaborated. “That includes our customers, our partners (employees), our suppliers and our communities.”
Reflecting on his career, Otto is hard pressed to single out a favorite experience or role. He has enjoyed the entire journey.
“I loved every store that I managed,” he said. “It was everything I hoped it would be when I first joined H-E-B. I loved leading the operating regions. Being part of and helping a really terrific merchandising team with the product development process and developing the strategy around how we’re going to merchandise those products was a wonderful experience. And I’ve loved every day of being part of such a unique and wonderful team and culture.”
“I’m very lucky,” Otto said. “I’ve had over 33 years now with a great company, and I’m fortunate to have been able to serve in so many different roles and to have formed so many wonderful friendships over the years. As I look back, my career with H-E-B truly is everything that I could have hoped for.”
