Kraft Food Innovation Strategy

An interview with Ms. Janine Keogh, Vice President – Consumer Insight & Strategy, Kraft Canada Inc. Ms. Keogh argues that true innovation for products and services requires a simplified framework. There shouldn’t be boundaries, but there should be focus areas that are grounded in consumer and market place insight. This is where significant shareholder value can be generated the fastest.


What does it take to innovate? Arcus Consulting Group has launched a major initiative to explore growth and innovation as key elements of corporate and business unit strategy. A majority of executives say it involves a pervasive corporate culture, deeper customer insight and a comprehensive strategy that will enable an organization to offer its customers important added value. They say such steps reduce costs, increase sales and achieve higher earnings. But how does one come up with new solutions, and can innovation really be part of a strategy plan? Arcus’ multi-industry survey of senior executives found that of all the challenges companies face in this area, the biggest challenge is finding ways to create a “culture of innovation”.


As Arcus research indicates, doing so means that you need to be surrounded by highly talented people.  It also means finding a way to transmit your passion to them, so they will buy into your vision of the future, perform at the highest possible levels, and come up with innovative solutions to the challenges of achieving the vision. No surprise, then, that the topic of innovation has been gaining ground as CEOs seek to incorporate concepts like a “culture of innovation” into their assessments of a company’s long-term value.


Kraft Food Innovation Strategy


Arcus: How do you define innovation in today’s business world?
Ms. Keogh: When people talk about innovation, most people associate it with new product development or a product launch. But it’s so much more. While it could be about a new product, it could also be a new service or a new way of approaching an initiative. It should be about looking at new, fresh ways to do things differently. Kraft is focused on creating a culture that does just that. Creating this culture of innovation in an organization is critical and has to be part of its core values. True innovation for products and services requires a simplified framework. There shouldn’t be boundaries, but there should be focus areas that are grounded in consumer and market place insight. This is where significant shareholder value can be generated the fastest.
Take convenience, for example.  The consumer observation or insight might point to consumers not eating three healthy, square meals a day because consumers are so busy, and on-the-run. You can start to see how a simple observation like that can present growth ideas and opportunities.


“You need to create a culture where innovation can come from anyone.”


It is important to have a framework that works across the organization, from different functional areas to different levels within the organization. An innovation framework also has to ensure that the both junior and senior level employees in an organization can relate to it. It has to be simplified to ensure the framework inspires a “new hire” to your organization to work in a certain way. A senior person who may be exploring long term strategic ideas should also be able to work within the same innovation framework. At Kraft Canada, we create a framework and a culture that allows for innovation at all levels.


Arcus: How does Kraft Canada create a culture for innovation?


Ms. Keogh: I see three important drivers of innovation in today’s competitive market place. First, you need to create a culture where innovation can come from anyone. At Kraft, our higher purpose has just been redefined. It is to “Make Today Delicious”. When we talk about “Make Today Delicious”, we immediately think about how to make food delicious. But it is much more than that. It has meaning in a broader sense – how to “Make Today Delicious” in the office, or make processes delicious- to ensure they are useful. We are committed to understanding how we “Make Today Delicious” for our Canadian consumers, but also for our employees.

This higher purpose gives rise to a set of values we operate by. One of those values is critical to innovation. The value is “We are open and inclusive”. So the culture encourages anyone at any level to contribute to bringing new ideas forward, which is why Kraft is organized by category business teams. Our teams have cross functional expertise. These teams are given autonomy and structured around functional teams of sales, finance, consumer insight and other functions. The point is, innovation occurs in an environment where being open and inclusive is a core value and where everybody has a right to speak and be heard. Diversity of thought is highly valued.

Second, on the new product side, it is important to strike a balance between consumer insight driven innovation and R&D and technology driven innovation. In the area of consumer insights, you are talking to consumers about a certain product category that they are interested in. And based on that deep understanding, you identify an unmet need. Sometimes our R&D and technology teams may come up with an innovation, or a technology looking for a home! In this case, it is in reverse. How can we leverage that idea to delight our consumers? Can that idea or technology be leveraged? Finally, the foundation of all we do is consumer insight. We need to understand our consumers. That is the all encompassing goal. That is how we will ultimately make today delicious!


Arcus: Could you please share an example of consumer-insight driven product innovation?


Ms. Keogh: I’d point to a significant product innovation called Thinsations. It is a 100 calorie product that utilizes key Kraft brands like Oreo and Chips Ahoy! Cookie brands. The consumer insight is having a portion controlled snack that can also be a treat.  You can eat so many of them and yet they are just 100 calories each. The consumer gains some control with Thinsations. How can something that is portion controlled actually be a treat? The consumer point of inspiration is that this portion control snack can also be your treat!


Arcus: What about older, more established brands? How do you keepthem fresh and relevant to today’s consumer?


Ms. Keogh: An example of a innovative  idea based on a consumer insight is Diamond Shreddies*, a breakfast cereal that POST turned on its side. This is an idea that seems new and fresh but it’s not new at all. What’s new is the creative approach, the communication vehicle and the cleverness of the idea. It isn’t a new product, and yet consumers will relate to it in a way as if it is new. The reason I mentioned it is because it is a very innovative way to bring news to an established brand that doesn’t have anything new to say. That was the challenge. Consumers were adamant that the product should not change.


“There needs to be a greater focus on the integration of these media components and an understanding of how these media work together.”

Our challenge then was to refresh a stodgy brand without changing anything. The innovation was in the approach the team took to address this challenge. Turning the square brand on its side, was clever and reflected the brand’s character. Shreddies is a straightforward and trusted brand. Its character is a little quirky without being weird. The innovation was true to the brand, and that is why the consumer responded so favourably to this campaign. (*At the time, Kraft owned POST, the company has since been sold to Ralcorp Holdings, Inc.)


Arcus: Can consumer insight trigger innovation in creative and media?


Ms. Keogh: Absolutely! An example of innovation in the advertising and media side is Maxwell Housecoffee. It relates to using consumer insight to do things differently. Instead of a typical equity building campaign or re-launch of our 100% Arabica coffee, the “Brew Some Good” campaign effort aimed to spread the word that Maxwell House is giving back to the community. The team lowered potential production costs for a TV commercial and earmarked the savings of $200,000 to charities nominated by our consumers.
The campaign encouraged “goodness” on a larger stage. In doing so, it generated goodwill towards the brand. The approach was more emotionally involving than a mere product re-launch. Canadian coffee drinkers are looking for ways to “do good” and give back, so this really hit home. Consumers wrote to us with suggestions on how we could spend the savings we generated from low production cost television spots. We gave it all back to programs helping people with their community initiatives.


It was innovative because we have always talked about Maxwell House being “good to the last drop”. Here, the insight of “brewing some good” translated into brewing some good in the community. It was shortlisted at Cannes along with the Diamond Shreddies campaign and won some Canadian recognition as well. It was an innovative approach to give the brand more meaning. There have been really strong business metrics. Consumer’s perception of the Maxwell House brand and equity measures moved up significantly after staying stagnant for a decade.


Arcus: What is the best way to get your innovation messages to your consumer?


Ms. Keogh: In terms of the market research and consumer insight industry in general, I think that it is an industry that has been historically focused on rigorous measurement of each media vehicle – specifically mass media like television and print. With so many ways to engage consumers through so many touch-points, there needs to be less of a focus on quantifying the impact of each media vehicle and more on the role that each vehicle plays on getting the overall message across to the consumer. The current practice is to compartmentalize and isolate the contribution based on an investment in each medium. There needs to be a greater focus on the integration of these media components and an understanding of how these media work together.


The focus has to shift from the role each medium is playing in getting the message across. It requires a cultural change within the industry. If we are launching a new product we need to understand the role of each medium. For example, are the roles of TV, digital and in-store merchandising to increase awareness, strengthen the brand’s image or create an emotional connection? The consumer ultimately makes the decision in-store (or on-line, if purchasing there) – but many things contribute to getting them to make that decision.
This doesn’t mean that the other media are not important, but each one is playing a slightly different role. In terms of innovation in measurement, the question is how can we get the right tools to optimize the right media components to get the message across?
“Insights need to live on in an organization and provide a foundation for growth.”


Ms. Keogh: If you are really looking for a payback you need to look at all the media together. The focus today is primarily on the performance of each component instead of the collective impact of all the components. For example, when consumers talk about Diamond Shreddies, they may associate the marketing campaign with bill boards and packaging, but there are many other elements of that marketing effort that play a role in getting that message (as simple as it is) to those who want to hear it and embrace it.


Arcus: What innovation do you see necessary in the area of market research and consumer insight?


Ms. Keogh: In terms of marketing intelligence and insight, the cost of entry is to have meaningful data collection and mining. I believe we need to see more innovation in how these insights are presented. These insights need to live on in an organization and provide a foundation for growth.  For examples, in Kraft’s “kitchens of the future” project in 2008, we visited kitchens across the country to understand attitudes to cooking and food. We developed a 40 minute presentation video for our management team. They quickly understood the unique character of Canadians in their kitchens and the diversity of attitudes to their kitchens, cooking and food. It’s about visually representing research results in a way that allows them to live on longer. It helps people understand what the brand is about. The video allowed everyone to get to know our group of college students in North York to an Alberta oil patch family, to a Japanese couple living in Montreal – bringing the consumer and insights to life is critical.


Another example is for Kraft Dinner. We did ethnographic insight work on this brand more than a decade ago that still lives on within Kraft and also our advertising agency. The Kraft Dinner team has turned over several times since this work was done, but good research lasts if it is kept alive and not shelved! Another example is some recent health & wellness segmentation work we did of Canadians. We ended up with 7 segments from someone who cares very little about their own health or the health of the planet, to people who care deeply about both. To bring this to life, we allowed our own employees, with help from our partners, to profile themselves into these segments. The process helped the entire Kraft Canada organization, including sales and operations, to understand and appreciate consumers in a highly visual way. That was an innovative approach to bring insights to life.


It provided a visual representation in our minds by giving new meaning to consumer data.
This process was innovative because it offered a more experiential depiction of our consumer and turned data and information into visual representation that would have a lasting impact. We need to bring the data, information and insights to life so that it can be shared and the insights can be used to drive our business. We need to make today delicious for our consumers, but also for our internal partners. We need to make “the data and insight delicious”! The learning needs to be palatable, easy to digest, and make the teams want to come back for more!


Arcus: What challenges do marketers face with Web 3.0 and social media?


Ms. Keogh: One of the barriers right now in the market research industry is that there is a large volume of untapped and unmonitored web 3.0 consumer information that’s being generated in blogs, social and online content. We’re trying, but it is a challenge to harness all this great insight, right there for the taking. The big challenge is to organize and analyse the information efficiently. There are a lot of conversations going on online. We need to compartmentalize the information and organize it to make it useful.


We need to listen to conversations online. Some questions that come to mind are: How do we make consumers want to be part of the research industry and have a direct conversation with us? How do you get consumers excited about their involvement in brands and product development to ensure they volunteer their opinions? Consumers have a seat at the table. Consumers need to feel empowered. We need to make research more engaging so that consumers would want to be part of it, instead of us asking them to be a part of it.


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