NIELSEN BREAKTHROUGH INNOVATION REPORT · GIOVANNI RANA BUTTERFINGER ® PEANUT BUTTER CUPS PG 53...

NIELSENBREAKTHROUGH INNOVATIONREPORTJUNE 2016

2016 U.S. EDITION

THE NIELSEN BREAKTHROUGH INNOVATION REPORT2

WELCOME

Copyright ©2016 The Nielsen Company 3

WELCOME TO THE 2016 NIELSEN BREAKTHROUGH INNOVATION

Report, and congratulations to our 18 winners! This is our biggest class

of winners ever, and it features two start-up companies—a Breakthrough

first. The report celebrates the high achievements of all of our winners

and shares insights from their extraordinary accomplishments, most

notably in our largest-ever collection of case study Spotlights, which

showcase Breakthrough Innovation in action.

As we reflect on the success drivers of the 92 Breakthrough Winners

across the five years of our study project, leadership has played a

consistent, decisive role. Given its pressing importance, for 2016

we have chosen to elevate and dedicate this report to breakthrough leadership.

Based on our many client conversations, we are confident that few will

dispute we are managing through an era of unprecedented change and

challenge. There is less room for missteps—and a greater need for

leadership.

The largest consumer packaged goods (CPG) firms control valuable

global capabilities that can catalyze innovation and organizational

transformation. But those very same capabilities can be misdirected

to strategies designed to fight yesterday’s war. Leadership is what will

make the difference. Leadership is what is necessary to ensure that

today’s flagship brands do not become tomorrow’s ghost ship brands—

drifting relics—from the perspective of consumers, shareholders and

the best talent.

The challenge is, without a doubt, surmountable. We have never had the

benefit of better innovation knowledge or better innovation tools than

we do today, and we need to put them all to work—right now.

Though the challenges of the present are largely artifacts of inheritance,

we are the ones who define the future course. There is a way forward

to a profitable, albeit very different, future. These are exciting times, so

let’s get to it.

L E T T E R F R O M T H E A U T H O R S

TADDY HALLPrincipal, The Cambridge Group;

Leader, Nielsen Breakthrough

Innovation Project; Author

ROB WENGELPrincipal & Leader, Strategic

Innovation, The Cambridge

Group; Co-Author

EDDIE YOONPrincipal, The Cambridge Group;

Co-Author


NIELSEN BREAKTHROUGH INNOVATION WINNERS

SKINNYPOP® POPCORN

PG 80 �

MILK-BONE® BRUSHING CHEWS®

PG 62 �

NASACORT® ALLERGY 24HR

PG 67 �

BAIPG 44 �

CHOBANI FLIPTM

PG 56 �

CHILI’S® AT HOME

� = SEE WINNER SPOTLIGHTS

C O N G R A T U L A T I O N S 20

16

ARM & HAMMERTM

CLUMP & SEALTM

PG 40 �

SALLY HANSEN®

MIRACLE GELTM

PG 76 �

DOLE® CHOPPED

SALAD KITSPG 59 �

C O N G R A T U L A T I O N S



GIOVANNI RANA

BUTTERFINGER® PEANUT BUTTER CUPS

PG 53 �

GAIN® FLINGS®

NEXIUM® 24HR

OSCAR MAYER P3

PG 71 �

CHEEZ-IT®

GROOVESTM

THE MAKING OF WINNERS:NIELSEN BREAKTHROUGHINNOVATIONCRITERIA

DISTINCTIVENESSDeliver a new value proposition to the market. Ingredient reformulations, repackaging, size changes, repositioning, and other minor refinements to existing brands are excluded.

RELEVANCEGenerate a minimum of $50 million in U.S. sales during first year of national distribution.

ENDURANCEAchieve at least 90% of first year sales in year two. This measure confirms a sustained level of consumer demand while allowing for some drop in revenue during the transition from trial to adoption.

� = SEE WINNER SPOTLIGHTS


GLADE® WAX MELTS AND WARMERS

BEN & JERRY’S® CORES

BREYERS® GELATO INDULGENCESTM

PG 48 �


In last year’s edition of the Nielsen Breakthrough

Innovation Report, we noted that “much better innovation

outcomes are a matter of choice.” That statement remains

true, but the stakes have grown higher.

Innovation may not feel like an existential mandate today,

because of the share of wallet commanded by name-brand

products and the comparatively small percentage of sales

generated by innovation. But if we fail to remake ourselves

in line with emerging consumer tastes, technological

realities and business models of the 21st century, we

will see growth stall and margins erode, we will lose

the battle for world-class talent, and our innovation

capability, already fragile, will collapse. Our market

cap will decline until we lose our independence to

consolidation and industry transformation. We will join

the ranks of the once-great companies that simply failed to

change fast enough.

Let’s be honest: the CPG landscape of 2030 will differ

profoundly from the marketplace of 2000. And to

paraphrase tech pioneer Alan Kay, The best way to predict

the future is to create it.1

Nobody is better positioned to create the food and

nutrition companies of 2030 than today’s leaders, and

here’s the choice and challenge, clean and unvarnished:

WILL WE LEVERAGE OUR CURRENT CAPABILITIES TO CREATE THE FUTURE? OR WILL WE LET OUR ATTACHMENTS TO THE ESTABLISHED ORDER IMPEDE OUR ABILITY TO LEAD THE TRANSFORMATION?

This is where we need to hear Machiavelli’s caution and

channel our inner Alan Kay. We can do this.

Welcome to the 2016 Nielsen Breakthrough Innovation Report and this year’s theme:

BREAKTHROUGH LEADERSHIP

WE MUST BEAR IN MIND, THEN, THAT THERE IS NOTHING MORE DIFFICULT AND DANGEROUS, OR MORE DOUBTFUL OF SUCCESS, THAN AN ATTEMPT TO INTRODUCE A NEW ORDER OF THINGS. FOR THE INNOVATOR HAS FOR ENEMIES ALL THOSE WHO DERIVED ADVANTAGES FROM THE OLD ORDER OF THINGS, WHILST THOSE WHO EXPECT TO BE BENEFITED BY THE NEW INSTITUTIONS WILL BE BUT LUKEWARM DEFENDERS.

— NICCOLÒ MACHIAVELLI, THE PRINCE, 1513

Framing the Challenge: Own Your Future


A WORD ON STYLE—SUITED TO ITS SUBJECTWe like to think the Breakthrough Innovation Project is something

unique. And if form follows function (which we have always believed),

we like to think the style of the report is unique, too. That doesn’t

mean we have entirely abandoned Aristotle’s dictum “A whole is what

has a beginning and middle and end.” It does, however, mean we

recognize that, as with many subjects, there is more than one way of

looking at things, and more than one way of writing about things.

Too many business books—you know which they are—argue for “the

three keys,” “the four imperatives,” “the five traits” of whatever it is.

And each year, a new crop comes along with completely different

solutions to the same problem, each soberly presented as the answer.

You may even have noticed, as we have, how strikingly similar their

claims are to breezily aspirational magazine covers.

There is rarely just one answer in the analysis of ever-changing

phenomena, although there is often just one problem. So you will find

here a report of many different sections, with many different ways of

attacking our subject. The one problem is achieving Breakthrough

Innovation. Different readers will respond differently to the different

pieces of the report—allowing us to hope there is something here for

everyone.

BREAKTHROUGH IN PERSPECTIVEMany successful innovations that do not meet the

Breakthrough criteria nonetheless play a critical role in

the life and growth of brands. In fact, the vast majority

of innovation activity comprises the closer-in launches

that keep brands fresh, consumers engaged and retail

customers supportive. “Sustaining innovation,” as the

term itself suggests, is a requirement for survival. You

need it every year—year in, year out.

But as any successful sailor will attest, you never

beat the fleet by following it. The difference makers

are Breakthroughs—products that expand or create

categories, that over the years add hundreds of millions

of dollars to the bottom line and billions to a company’s

market capitalization. Another way of putting it is that

sustaining innovation is fine for achieving year-to-year

performance and to help prevent falling behind the fleet

in the short term. But without Breakthroughs, your

ability to thrive over the long term will be very much in

doubt.

The mark of innovation mastery is a balanced

innovation portfolio. In recognition of this broader

management challenge, we have added a special section

on this topic at the end of this year’s report.

But Breakthrough is the big one—and the easiest to slip

out of a company’s portfolio. It is the kind of innovation

most thoroughly at risk, and therefore the kind of

innovation most in need of recognition, of celebration,

of study and support. It is for this reason that the

Breakthrough Innovation Report exists.

THE BREAKTHROUGH INNOVATION PROJECTIf you’re new to the Breakthrough community, welcome! This is our

fifth edition of the U.S. report, and while each report celebrates a

new class of Breakthrough Winners and shares perspectives on fresh

innovation topics, there is continuity to the series. If you find value in

these pages, we encourage you to visit Nielsen.com/Breakthrough,

where we’ve made available past reports, the Spotlight case study

library, international editions of Breakthrough, discussions of Jobs

Theory, detail on the Demand Driven Innovation system, and other

innovation materials and resources.

As in the past, this year’s winners and their Spotlight case studies

make up the centerpiece of the report. We now have a published

case library of 32 U.S. winner Spotlights and a growing body of

international Spotlights as well. For those looking for an immersion

experience in Jobs Theory and Demand Driven Innovation—the how-

to of Breakthrough Innovation—pick any 10 Spotlights, and you’re off

to a great start. We promise you’ll be surprised by what you learn and

find valuable application for the insights you create for yourself.


In 2015, the top 25 largest food and beverage companies generated

45% of category sales in the U.S. but drove only 3% of the total

category growth from 2011 to 2015 (roughly $1 billion in sales out

of $35 billion in category growth) and grew at a compound annual

growth rate of 0.1%.2

These are striking figures, and the wave of change is far from

cresting.

Our belief is that there will be more change in CPG in the next five

years than there was in the last 50.

This transition is not going to be easy. For many decades, the

CPG world has enjoyed stately product cycles, brand life spans

typically measured in decades, robust barriers to entry, and few

game-changing new entrants. Market share was contested within

well-established category boundaries against a fairly stable set of

rivals. Unlike technology leaders, CPG executives could sleep well

at night—free of worries about becoming the next Blockbuster,

because there was no Netflix ripping around the corner.

CPG ON THE CUSP OF TRANSFORMATION

1. CPG planning cycles were, well,

cyclical. They tended to recur with a

reasonable degree of regularity and

familiarity. Critical resource allocations

and decision making were akin to

playing chess by mail. Long-range

plans of three years or more were a

relevant exercise. Annual operating

plans could be developed 12 to 18

months in advance. Retail resets could

be done twice a year in the spring

and fall like clockwork. Media plans

were bought and paid for months in

advance.

2. Consumer empathy was natural.

Boomer managers could succeed by

serving Boomer consumers.

3. Channels—in both media and retail—

were few, analog and essentially one-

way. It wasn’t until the 21st century

that interactive, digital, social, mobile

and addressable became prefixes

to media. And e-commerce was a

minuscule sideshow to the dot-com

circus, not the main event.

4. Data—though always important—

had the comfort of being “small”

and generally historical in nature.

Amounts increased steadily but not

exponentially; furthermore, the sleep-

depriving question of “Am I even

looking at the right data?” still lurked

in the fairly distant future.

LARGE U.S. MANUFACTURERS ARE DRIVING SALES, BUT NOT

CATEGORY GROWTH

% OF CATEGORY GROWTH

While running a CPG company wasn’t easy, the dynamics were familiar:

OBJECTS IN THE REARVIEW MIRROR ARE FARTHER AWAY THAN THEY APPEAR

25 Largest Food and Beverage Manufacturers

All Other Manufacturers & Retailers

G WE R TW O H DO ER R :N

This was the world of the 20th century—the courtly era of CPG. And doesn’t that feel like ancient history now? Not only are the times

a-changin’, but as the aforementioned growth statistics suggest, they are changing faster than we might like to think.

$35B


Seeing the long-tail players driving nearly half of the growth, we explored what they’re doing differently:

Private label drove 23% of the growth ($8 billion) and grew at a 2.6% compound annual growth rate.

Mid-tier companies ranking 26–100 in sales drove 25% of the growth and grew at a compound annual

growth rate of 3.2%.

And in a long and mighty tail, 20,000 companies below the top 100 drove 49% of all category growth

($17 billion), with a compound annual growth rate of 6.3%.

SMALL MANUFACTURERS ARE GROWING CATEGORIES (AND THEIR OWN BUSINESSES)

% Ca

tego

ry G

rowt

h

Rate

of A

nnua

l Gro

wth49% 6%

3%

3%

0%

25%

23%

3%

SMALL MANUFACTURERS(TOP 101 & BELOW)

MID-TIER MANUFACTURERS(TOP 26-100)

RETAILERS (VIA PRIVATE LABEL)

LARGE MANUFACTURERS(TOP 1-25)

1. They play “speed chess” by moving

much faster than traditional planning

cycles. Breakthrough Winner Chobani,

for example, conceived, developed and

shipped a successful new offering in

six weeks. Words are revealing as well:

Traditional firms speak of planning

“cycles,” connoting continuity. Newer,

smaller firms are much more likely to

speak of “iterations,” in which what is

expected is something different.

2. Digital, addressable, fragmented

media shift the currency from tonnage

to precision, mitigating the traditional

scale buying advantages of large firms.

Most smaller firms actively embrace

the cost-effectiveness of digital,

unshackled from the legacy analog

traditions and processes.

3. They’re far more concerned with being

authentic and relevant than huge.

4. They disrupt the scale economics of

large firms’ integrated operations

with the lean, flexible economics

of modular operations. They don’t

have the investments in production

or distribution, so they are able to

operate without the pressure to utilize

or finance fixed assets.

5. They’re “owner-operators” who

immerse themselves in the context

of the consumer rather than rely

on the efficiencies of reports and

subordinates to filter and organize

the outside world’s messiness. Like

the best restaurateurs, they sweat the

details that create great experiences.

So about this growth: Who did drive it if big-CPG didn’t?

OBJECTS IN THE WINDSHIELD ARE CLOSER THAN THEY APPEAR


Today, major CPG firms are structured to play defense—with large balance

sheets, extensive distribution networks, extended supply chains and

hierarchical decision-making structures. Fueling much of the resource allocation and

decision making are innovation incentives that encourage quick-hit small ball in support

of large, existing brands and fixed assets. Even the signature job function, brand manager,

suggests stewardship and operational focus, rather than growth and innovation.

Leading 20th-century CPG firms that not only survive but thrive in the balance of the 21st

century will make major reconfigurations to each of the three core components of their

capabilities, shifting their competitive stance to offense, even as they continue to play smart

defense. For each capability component, we highlight three elements that stand out.3 You’ll no doubt

want to construct your own, prioritized list.

THE BIG AN OVERARCHING CHALLENGE FOR ESTABLISHED FIRMSSHIFT:

CAPABILITIES

RESOURCES PROCESSES PRIORITIES


• Innovation failure will be valued as providing essential learning. Much of what passes for “embracing risk” today is lip service unsupported by organizational reward structures or cultures. Ben & Jerry’s actually launched a version of their Breakthrough-winning “Cores” ice cream in 2002, but it failed to gain traction. However, the lessons learned and applied paved the way for this year’s Breakthrough Winner.

• Leaders will protect the “explorers” and ensure that the capabilities that sustain the current business don’t kill the projects that will create the future business. This entails pressing the frontiers of knowledge and embracing the unknown, unfamiliar and uncertain.

• Leaders will ensure that balanced innovation portfolios are real—recognizing that absent senior involvement, efforts steadily shift to the close-in, familiar, quick-hit projects.

• Leading firms will look less like monolithic fortresses and more like collaborative ecosystems. Value will be more a function of how they interact with critical partners than a function of what they directly own or control.

• Investments that increase flexibility will be valued equally, if not more than, investments in efficiency. Fixed, nonflexible assets will be different and almost certainly fewer. Productive assets of the future will be smart, connected and flexible.

• Leadership requirements will shift. In times of rapid change, leaders who are better experimenters, listeners and collaborators will be more valuable than vision casters or financial engineers. They will return to the entrepreneurial habits that made their companies great at inception. There was a day when even the largest firm was a scrappy start-up. Just as global experience is a prerequisite to be CEO, leaders will need bona fide innovation experience to get the top job.

> RESOURCESPRIMARILY ASSETS THAT CAN BE BOUGHT, SOLD, HIRED OR FIRED, INCLUDING INTANGIBLES SUCH AS BRANDS AND INTELLECTUAL PROPERTY

• Firms that want discontinuous, category-creating, breakthrough innovation will build processes dedicated to those outcomes (offense). They will maintain a separate innovation process for sustaining the current business (defense).

• Firms will innovate around experiences more than products, leading to innovation processes looking very different than they do today. Bellisio Foods’ director of R&D, Kimberly Mikaliunas, illustrates the point with the Chili’s at Home launch: “This country recently went through a culinary renaissance—food channels, food magazines, social-media clips. Emphasis shifted from food to the dining experience. Our winning launch brought new, younger and lapsed users into the frozen category to try the Chili’s experience. We also offered loyal restaurant patrons a new, at-home way to enjoy the Chili’s experience.”

• Talent recruiting and development processes will evolve to enable firms to compete for the best and brightest minds, because technology and innovation will be integral to how successful companies operate.

> PROCESSESTHE WAYS IN WHICH AN ENTITY’S RESOURCES INTERACT TO CREATE CUSTOMERS AND SUSTAIN THE ENTERPRISE

> PRIORITIESFORMAL AND INFORMAL GUARDRAILS, INCLUDING INCENTIVE STRUCTURES, MARGIN REQUIREMENTS, RESOURCE ALLOCATION RULES, HIRING AND PROMOTION CRITERIA AND COMMITMENTS TO SHAREHOLDERS

METRICS MATTER: Leading firms will measure share of growth (offense) in addition to share of market (defense). They will abandon misguided activity metrics such as “percentage of sales from new products,” which tends to miscategorize (and reward) waste as if it were innovation.


AMONG THE FEW UNDERDISCUSSED TALENTS OF THE LEGENDARY STEVE JOBS

was his ability to be at once passionately persistent and open to changing his mind

almost instantaneously when presented with compelling, alternative arguments. This

quality may well be the one that CPG executives need to channel most as they push

into a future that is far more discontinuous than it is continuous with the familiar

forces and flows of the 20th century.

In the spirit in which many organizations have embraced “zero-based budgeting,”

we believe that the firms that emerge as the leaders of the 21st century will apply

a corresponding blank-sheet approach to business models, organizational structures,

innovation, research, procurement, external collaboration and so on. The “consumer packaged

goods” industry—a moniker that already carries a quaint ring—will grow increasingly anachronistic as it

describes less and less of what industry leaders actually do to serve consumers and generate returns. Successful

firms of the future will master consumer experiences, not just consumer goods.

CHANGING THE WAY WE

THINK

In moments of discontinuous change,

the “expert’s mind” can become a

liability, because expertise is rooted

in what worked in the past, which can

become baggage in the context of

creating the future. The “beginner’s

mind,” in which there are many

possibilities and few certainties, will

prove to be the smart one.

Arguably the biggest obstacles faced

by established CPG companies are

legacy assets—yes, the “fixed” ones

for sure, but also the entrenched

beliefs and knowledge assets. It is

this second category of assets that

gives us not only our sense for the

businesses we’re in but also our sense

of self.4 This, ultimately, is why change

in business is so hard.

Last year we related the story of

the U.S. auto industry executives

who rejected and denied Toyota’s

manufacturing superiority until denial

led to an existential crisis. It took

about a decade. CPG leaders might

have a decade as well. Maybe more or

maybe less, but the clock is ticking.

The good news that runs throughout

this report and fuels the Breakthrough

findings is Jobs Theory: the reality

that innovation is a function neither

of genius nor luck. As we discuss

later in this report (and discussed

in greater detail in the 2015

Breakthrough Innovation Report),

Jobs Theory encourages us to think of

consumer products not as a sum of

attributes but as services that enable

desired progress and create valued

experiences. This is thinking like a

successful innovator!

We may be navigating an unfamiliar,

rapidly changing marketplace, but we

can do so with a robust understanding

of what causes successful innovation.

This again, however, requires a

dramatic change of mental models.

For leaders who view the rapidly

transforming marketplace as an

opportunity rather than a threat, the

future is bright.

The body of this report, as well as the

unprecedented collection of 11 world-

class Spotlight case studies, provides

input and ideas for mastering the “big

shift” posed by the discontinuous 21st

century.

Seeing a World of Many Possibilities


L E A R N I N G F R O M L E A D E R S :


rom the first presentation of the Demand Driven Innovation system in 2013,

leadership played an integral role; it was instrumental in every single Breakthrough

success we studied.5 Frankly, we struggled to go deep on the topic—one so vast

that discussions too often devolve into platitudes and inactionable exhortation.

However, that it’s a tough topic to address succinctly is a lousy reason to ignore it,

especially when leadership holds the key to future success.

As noted already, the standout CEOs of the future will chart a dramatically different

course than their predecessors. Stewards need not apply. We are in need of leaders

who have a high level of comfort with upheaval and transformation, and we should

look for that experience in their credentials.

We also need a generation of chief executives willing to roll up their sleeves and

dirty their hands in the hard work of innovation. According to a 2013 PwC survey of

CEOs, 37%—up from only 12% in 2010—saw leading innovation as their personal

responsibility. Admittedly, 37% feels awfully low, but the steep trajectory suggests that

more and more CEOs are waking to the reality that this is not a challenge to delegate.

LESSONS LEARNEDAND APPLIED

REAL-TIME PERFORMANCEMANAGEMENT

DEMAND DRIVENINSIGHT

DEMAND DRIVENDEVELOPMENT

DEMAND DRIVENACTIVATION

BREAKTHROUGHLEADERSHIP

DEMAND DRIVEN INNOVATION SYSTEM


Geoff Tanner took over innovation

in pet at Del Monte at a time when

there was a self-admitted absence of

consumer-driven innovation at the

company. Geoff led the development

and launch of a 2013 Breakthrough

Winner, Milo’s Kitchen dog treats,

Del Monte’s first new brand in over a

century. After the division was spun

off as independent Big Heart Pet,

Geoff oversaw the development of

two additional Breakthrough Winners

(Meow Mix Tender Centers in 2014

and Milk-Bone Brushing Chews

in 2016) and developed a robust

Demand Driven Innovation system

at Big Heart (recently acquired by

the J.M. Smucker Company). Geoff is

now senior vice president of growth

and innovation at Smucker.

There exists, unofficially, a Breakthrough Innovation Hall of Fame, and its ranks comprise those elite few who

have proven themselves to be not only enduring winners, but true industry leaders as well. They have shared their

successes—and many scars—in the interest of advancing the state of knowledge and practice. To prepare this

year’s central theme, breakthrough leadership, we enlisted a few of these all-stars to help breathe both wisdom and

actionability into our discussion.

Barry Calpino helped SC Johnson

launch Ziploc food storage

containers, Kellogg’s Special K

protein line (which pioneered the

brand’s successful presence in the

vitamins and supplements aisle),

and Wrigley Extra Dessert Delights

before becoming the vice president

of Breakthrough Innovation at Kraft,

where he played an instrumental

role in six Breakthrough Winners.

Barry is currently a part-time adjunct

professor at Kellogg, teaching

innovation, and also holds one of the

coolest job titles in the industry: vice

president, Innovation Hothouse, at

Mondelez.

Pat McGauley created the first

dedicated innovation department at

Anheuser-Busch. During his 12 years

of leading the innovation effort, Pat

and his team developed over 150 new

products and packages, including

Bud Light Platinum, Chelada, Shock

Top and the aluminum bottle along

with four Breakthrough Winners,

including the transformational

Bud Light Lime and Lime-a-Rita

family. Pat is now consulting for AB

InBev and a founding partner of

the innovation consulting firm The

Startup Within.


We are indebted to Barry, Pat and Geoff for their contributions to this report, past reports, numerous Breakthrough Spotlights,

conference presentations, webinars and other special events. We are also grateful for their friendship.

WHEN WE LOOK ACROSS THESE THREE LEADERS, A NUMBER OF SIMILARITIES EMERGE. HERE ARE 15:

Promote consumer empathy• They put consumer demand at the center of their innovation efforts.

• They don’t just champion empathy; they practice it by routinely immersing themselves in the circumstances of

consumers.

• They seek surprises.

• They “benchmark outside of category,” constantly seeking inspiration and opportunity, not only from outside the

company but from outside the CPG industry as well.

Fit the process to the objective• They apply comprehensive measurement, testing, screening and forecasting protocols in the interest of making

innovations bigger and better.

• They modify stage gate processes as necessary, but they do not compromise proven innovation principles.

• They prototype and experiment with consumers in-market relentlessly.

Fail valuably and learn systematically• They study past successes and failures rigorously to learn and improve with every initiative.

• They exercise a healthy paranoia, manifest in a “nothing is impossible” attitude toward risks and opportunities.

• They value failure. This is a huge difference from the commonplace and often empty appeals for “risk tolerance” and

“embracing failure.” Breakthrough leaders realize that if you’re not failing, then you’re not trying hard enough nor

learning enough to succeed greatly.

• They persevere, persevere, persevere.

Embrace a culture of transparency, collaboration and humility• They keep their CEOs actively engaged in—not merely aware of—their innovation activities.

• They think cross-functionally and are relentless integrators and collaborators.

• They display no egos. They own the blame and distribute the glory.

• They have a sense of humor. You can’t be in this game if you can’t laugh easily and often—

especially at yourself.


Readers will probably read nothing of a “wow, I never would have thought of that!” nature in the pages that follow. Interpret that as a double-edged sword:

• On the one hand, there is no magic required, no pixie dust to sprinkle, no special software to install, no required

research methodology. That’s good.

• On the other hand, this is bloody hard work. Often unappreciated with few internal allies and many naysayers and

contrarians (remember what Machiavelli said), innovation leaders should not expect to win popularity contests, even

as they oftentimes provide the lifeblood of the company.

BREAKTHROUGH

The following perspectives from serially successful

innovators not only reinforce one another, they also align

powerfully with Nielsen Innovation Practice and Cambridge

Group client engagements across 100+ projects in the past

two years. We encourage folks to give a close read to what

this power trio has to share, because it offers a prescient

synthesis of a much broader body of client work and

research.

As we’ve already noted, Breakthrough Leadership isn’t easy.

For many organizations the historic role of C-suite leaders

in the context of innovation has been at arm’s length:

extolling its importance and convening periodic reviews to

check status. A much more hands-on role is required. For

many accomplished leaders, this will feel fundamentally

unnatural, because they have never actually managed

an innovation initiative with end-to-end responsibility.

Nonetheless, it needs to happen. The stakes are high, and

time is short.

As Geoff Tanner notes, “At Big Heart Pet, by far the

majority of our growth is coming from innovation and

has been for several years.” Moreover, in the short span

of a couple of years, Geoff and his team transformed

innovation at Big Heart from “something that other

companies do” to a core competency and an engine

for growth. At the same time, Geoff will assure you that

leading this kind of transformation is not for the faint of

heart.

Focusing on leadership in the fifth year of Breakthrough

is both fitting and telling: It is fitting to cap five years

with such an important theme. It is telling because of the

considerable time it took us to understand, synthesize

and validate exactly what needs to be said—and more

importantly changed—regarding leadership’s role in

driving successful innovation.

THE QUESTIONS WE’VE BEEN PURSUING ARE FOCUSED: WHAT ARE BREAKTHROUGH LEADERS DOING DIFFERENTLY FROM THEIR PEERS TO ENABLE SUCCESSFUL INNOVATION? AND SPECIFICALLY,

What are the implications for C-suite executives?What are the implications for senior managers with innovation mandates?What needs to change in terms of mental models and operational processes in order to make innovation consistently successful?


B R E A K T H R O U G H L E A D E R S H I P :


W I T H T H O S E E N C O U R A G I N G W O R D S, L E T ’S L E A R N F R O M A F E W O F T H E V E R Y B E S T.

“In 2008 and again in 2009, we were one of the very worst innovation performers

in the industry,” recalls Barry Calpino, former Kraft vice president of Breakthrough

Innovation.6 “We publicly acknowledged our status as ‘worst’ and simultaneously

committed ourselves to becoming first. President Tony Vernon didn’t just proclaim

and delegate; he showed up, literally. We had quarterly pipeline review meetings,

which were cross-functional leadership jam sessions in which we hashed out issues

related to priority projects. By being there, being engaged and constantly playing the

role of the instigator to think bigger and make ideas sharper, Tony sent a powerful

signal to the organization that innovation mattered, that big bets were important,

that boldness was rewarded and championed.

“I think a lot of people in our industry are accustomed to hearing senior executives

extol the importance of game-changing innovation, but then the incentives a little

lower down in the org are all aligned with getting stuff into market fast and doing

what it takes to hit a quarterly sales number. Honestly, I think many managers are a

bit cynical about C-suite commitment to Breakthrough Innovation, but Tony really

defied any would-be doubters.

“By 2012 we were ranked externally—by retailers and industry analysts—as one of

the very best. We had launched three $100 million platforms, including creating a

new brand and category with MiO water-enhancing drops. We earned Wal-Mart’s

vendor of the year award and numerous other industry accolades, including six

Breakthrough Winners in four years.”

“When I met with client CEOs as a consultant last year,” Calpino emphasized,

“one of my first questions was, What are your top three new product initiatives? If

they didn’t know what they were, why they were important, and the core consumer

demand they addressed, that’s a problem. Most senior execs think it’s sufficient

to articulate priorities, but that turns out to be insufficient. The CEOs need the

initiative-level engagement on the big bets, or else decisions will be made and

resources allocated based on shorter-term incentives of middle managers—and

that’s suicidal for Breakthrough Innovation.”

Leaders who expect transformational innovation outcomes need to show up and

roll up their sleeves. Sustained, profitable growth depends on a robust, consistently

successful innovation capability in which C-suite leaders play an active role.

LESSON 1: LEADERS ROLL UP THEIR SLEEVES AND GET DIRTY


LESSON 2: PROTECT THE EXPLORERS

“It was shortly after the formation of AB InBev,” recalled Pat McGauley, the company’s

former vice president of innovation.7 “We gathered our top 50 executives for a strategic

planning meeting at Harvard. A central part of the multiday session focused on organizing

ourselves for growth, and we performed a self-assessment exercise concluding that we

were incredibly proficient exploiters of opportunity but not nearly as capable of exploring

for future opportunities.

“I think many executive teams get that far—acknowledging strengths and weaknesses—

but a key contributor to our success was that our zone president, Luiz Edmond, didn’t

just say, ‘OK, you guys go fix that.’ He realized that we had a massive set of processes

and incentives and a deeply rooted culture that would conspire against efforts to allocate

serious resources to exploring and developing radically new growth frontiers. Especially

when you consider the massive scale of our flagship brands, anything truly innovative is

just going to look ridiculously small by comparison, so innovation has built-in opposition.

“A specific example of the impact Luiz had was in how he created his Explore agenda,

where he allocated significant time and regularly met with me and other key stakeholders

to review Explore projects, challenged us to think bigger and drove alignment within the

organization.

“Luiz was also critical in making sure we were working on the right projects. As

with most large organizations, many of the more unusual innovation ideas were

products of senior-leader speculation rather than consumer insight, and we

had to stop that. Big innovations definitely require executive sponsorship, but

we needed the senior executives to champion our process, not pet projects.

While I quickly earned the reputation in the executive

suite as the guy who was constantly saying no, Luiz

absolutely understood how important it was that we

protect a disciplined process rather than executive

privilege. Luiz played an essential role, especially in

the days before we had a track record.”

Geoff Tanner reported a similar experience. “[The]

CEO for Big Heart Pet Brands, Dave West, regularly

asked us, ‘What do you need me to do?’ He stayed

very close to major initiatives and instituted full

C-suite participation in regular, informal, hands-on ‘pictures and prototype’ sessions with

the Innovation Team. Dave understood full well that blockbusters need senior support

because these initiatives run contrary to every entrenched discipline and cultural norm

and short-term economic incentive of the organization. CEOs who assume they can just

declare the need for innovation and leave it to their subordinates to follow through will be

sorely and systematically disappointed. For better or worse, Breakthrough Innovation has

to be a hands-on executive activity.”

BIG INNOVATIONS DEFINITELY REQUIRE EXECUTIVE SPONSORSHIP, BUT WE NEEDED THE SENIOR EXECUTIVES TO CHAMPION OUR PROCESS, NOT PET PROJECTS.

—PAT MCGAULEY


LESSON 3: BECOME THE VOICE OF “YES”

As discussed earlier and noted by Machiavelli 500 years ago, innovation has

entrenched forces opposed against it and plenty of eager naysayers. When

C-suite leaders become the voice of “no,” innovation withers. By contrast,

good things happen when CEOs systematically ask these questions:

• What can I do to help?

• How do we make this even bigger?

• What barriers are in your way?

Actions in the C-suite reverberate powerfully, and if managers anticipate a senior champion,

they’re motivated to strive greatly and do their very best work. Conversely, when the C-suite

is perceived to be a risk-averse firing squad, the flicker of early innovation dies a predictable

and quiet death. There is symbolic value in the ratty pair of Nike sneakers that Jeff Bezos

hands out with tremendous fanfare to the Amazonian who “just does it” and brings a great

idea to life. There is practical value in the way that Intuit permits managers to conduct

small in-market experiments without any internal approval requirements. A CEO who

wants innovation should work hard to be known as the leader who asks, “What if . . . ?”

This is an unnatural act for executives trained to act decisively, know the answer and drive

the quarterly number. The perception is that such leadership demonstrations inspire

confidence, and in certain instances, this may be true. However, successful leaders of

systematically successful innovation organizations loosen their grip on certainty and find

comfort in the honesty of not knowing. The certainty that managers need from CEOs flows

from the conviction that the future needs to be created and that past practices and present

profit engines will not be allowed to impede the vital work of the innovator. Furthermore,

as managers chart new territories, they need to believe their CEO will be there, breaking

trail and covering their backs.

LESSON 4: BALANCE THE INNOVATION PORTFOLIO

“Well before President Tony Vernon engaged in our quarterly innovation pipeline meetings

at Kraft, we had a three-tier system for organizing our initiatives,” Calpino explained. “The

reality, however, was that virtually all of our initiatives were tier-three incremental

improvements with only the occasional tier-two category-expanding idea. Tier

one was basically a null set unless we fudged and bumped things in there for the

optics rather than the substance.

“When Tony showed up, all he wanted to hear about was the tier ones,

and he wanted the substance, not the spin. Unsurprisingly, the forces

that continuously conspire to make big ideas conform to established

processes and production lines and ways of working were offset by Tony’s

insistence that we invest in true breakthrough work. When you know the

president is going to ask you about the progress on your tier-one initiatives, well,

that’s definitely what you put your time and money against.”


Virtually every company we assist has some form of tiered portfolio system, but a client’s

newly installed chief growth officer concluded a self-assessment that applies to many: “For

us, the set of top-tier or transformational innovations is basically empty, and much of the

so-called incremental stuff is unlikely to prove incremental at all. Our teams are running

like crazy, but we’re not going anywhere.”

SUCCESSFUL CEOS WILL OWN THE TOP INNOVATION TIER. THEY SHOULD HAVE FAMILIARITY WITH THOSE INITIATIVES AND PROTECT THEM FROM ENTRENCHED FORCES THAT WORK TO CO-OPT AND UNDERMINE THEM.

“Early in my career, I was an innovation leader at SC Johnson when Fisk Johnson was relatively

new at the helm and the legend of Sam Johnson loomed large,” Calpino recalled. “Fisk had

inherited and shared his father’s deep and real commitment to innovation. The family’s

intense commitment ran strongly through the company’s senior leadership, including CEO

Bill Perez. Bill’s leadership was hands-on and open-minded. He not only wanted to lead,

he wanted to learn and improve. One of the projects Bill devised was to divide marketing

and R&D managers and senior execs into three cross-functional teams to analyze decision

making, resource allocation, team composition, insight generation and other key variables

related to three discrete sample sets. One team focused on our most successful launches. A

second team—the one nobody wanted and I was on—analyzed our unsuccessful launches.

The third team looked at some of the best innovation organizations in the world across a

variety of industries.

“So what did we learn from our study project at SCJ? Every success we found had an active

senior-executive champion. This was someone in the C-suite or divisional president with

[profit-and-loss] authority. There were no exceptions to this finding across all three of the

study sets. By contrast, among our failed launches at SCJ, none of them had that level of

senior leadership. The initiatives failed primarily because of cuts and compromises, not

because the core ideas were bad.”

The study conducted at SC Johnson illustrates something underscored by McGauley and

Tanner as well. Successful innovators study their own launches, study competitive launches

and benchmark outside the category—learning lessons from as many places as possible in

the interest of continuous improvement.

LESSON 5: LEARN METHODICALLY TO IMPROVE CONTINUOUSLY


LESSON 6: CULTIVATE CREATIVITY AND KEEP INSIGHTS INTACT

One of the points that Calpino, McGauley and Tanner each emphasize is that a

robust innovation capability is like physical fitness; without systematic discipline,

it’s easy to lapse into bad habits, and you can lose it much faster than you attain it.

Institutionalized capabilities quickly atrophy when senior leaders divert attention or

allow short-term expediencies to trump category-creating exploration.

Calpino offered a cautionary tale: “Throughout my career and during my time at Kraft,

I’ve seen the engagement and commitment of senior leadership ebb and flow—even the

best ones. There are so many other ‘more urgent’ and burning issues, and therein lies

a huge challenge, because Breakthrough Innovation just never becomes routine. It is

always, always hard work requiring senior engagement and commitment. It is so easy to

slip, and the next thing you know, the tier-three list is huge again, and it’s back to ‘Where

are the tier ones?’ The truth is that I’ve learned—by my own mistakes—that you have to

be relentlessly vigilant, or hard-earned capabilities will quickly atrophy, and bad habits will

reassert themselves.”

The most valuable innovation ideas are ideas that open new categories or expand existing

ones. Generally they break accepted category definitions and, consequently, tend to challenge

internal organizational processes, incentives and mental models. Big ideas cross disciplines

and integrate seemingly disparate fields—product science, manufacturing technology, pricing,

packaging, finance, media and retail activation, to name a few domains. It’s almost a certainty

that the more unexpected the idea, the more natural enemies the idea will find internally. It’s

not personal; it’s a reflection of incentives and established priorities.

If senior leaders expect their organizations to seek, develop and commercialize deeply

creative ideas that challenge the status quo, then these same senior leaders need to be

at the forefront of pushing boundaries, bringing outside perspectives into the

company, challenging assumptions and cultivating a playfulness that fuels

imagination. Successful innovation executives publicly recognize and reward

lateral thinking and managers who keep fragile insights whole rather than

dilute or distort them in the interest of complying with established beliefs and

practices. And yes, sometimes cherished timelines need to be adjusted in the

interest of getting it right.

Many readers may push back, saying, “In our company, timelines are

nonnegotiable.” That’s exactly the point: C-level involvement is required to

ensure that ideas aren’t sacrificed in the interest of timelines. The launch of

Butterfinger Peanut Butter Cups was delayed eight months in order to get

every detail right, for example. As L’Oreal’s Said Dabbagh said regarding the

CEO support for 2015 Breakthrough Winner Advanced Haircare, “There was

always a sense of urgency, but it was urgency in getting it perfect.” That’s senior

leadership that fuels Breakthrough success.

LESSON 7: REMEMBER, INNOVATION IS HIGH MAINTENANCE


WHAT’S A JOB?• A “job” is the progress that an individual seeks in a given circumstance.

• The job to be done generates the energy required for someone to take an action, such as pull a brand into his or her life or develop a compensating routine.

• While many of the jobs in our lives have adequate solutions, successful innovations resolve circumstances of struggle and fulfill unmet aspirations: they perform jobs that formerly had only inadequate or nonexistent solutions.

• Because jobs occur in the flow of daily life, the circumstance is the essential unit of innovation work—not customer characteristics, product attributes, new technology, or trends.

50%LIGHTER

50%LIGHTER

LIT TER

All the strength, half the weight.Wow! It’s like they’ve been reading my mind.

Lighterweight? purr...

purr

40LBS

$$$

These small bags are such a waste of money. Back to the store... again... [sigh]

And they barelyfill the box!

Smells like the cat box needs changing... ugh! Out of litter, again. I can’t even lift them.

The value-sized bags are impossible...

The criteria that people apply in evaluating “job candidates” (i.e., potential solutions).

Understanding the job dramatically reconfigures category structure and competitors. For a given job, consumers regularly consider an array of solutions that extends well beyond a given store aisle—and often beyond the store as well.

Remember: criteria are always circumstance specific.

The functional, emotional and social dimensions of benefit that collectively constitute the ideal solutionfor the job: the “job spec,” or blueprint for successful innovation.

Breakthrough Winners nail poorly performed jobs:All the strength, half the weight.

Who, when, where

Desired progress, outcome, experience or solution

Complication, compromise, trade-o�, or struggle

1. Buying and using a product that imperfectly performs the job2. Cobbling together a workaround solution involving multiple products3. Nonconsuming compensatory behaviorRemember: Sometimes the struggle is discernable and quite clear; other times, especially when consumers have developed compensating routines, the struggle is far less obvious.

CIRCUMSTANCE STRUGGLING MOMENTS CRITERIA SOLUTION

DIRECTLY VERIFIABLE ELEMENTS INCLUDE: ELEMENTS THAT NEED TO BE INFERRED INCLUDE:

criteria

are ALWAYS

circumstance

speci�c

WHAT DOES A JOB LOOK LIKE?YOU CAN VISUALIZE A CIRCUMSTANCE IN WHICH A JOB ARISES AS A SHORT STORYBOARD CAPTURING ESSENTIAL ELEMENTS. SOME OF THESE ELEMENTS CAN BE DIRECTLY VERIFIED, AND OTHERS NEED TO BE INFERRED AND VALIDATED.

JOBS THEORY REFRESHER


50%LIGHTER

50%LIGHTER

LIT TER

All the strength, half the weight.Wow! It’s like they’ve been reading my mind.

Lighterweight? purr...

purr

40LBS

$$$

These small bags are such a waste of money. Back to the store... again... [sigh]

And they barelyfill the box!

Smells like the cat box needs changing... ugh! Out of litter, again. I can’t even lift them.

The value-sized bags are impossible...

The criteria that people apply in evaluating “job candidates” (i.e., potential solutions).

Understanding the job dramatically reconfigures category structure and competitors. For a given job, consumers regularly consider an array of solutions that extends well beyond a given store aisle—and often beyond the store as well.

Remember: criteria are always circumstance specific.

The functional, emotional and social dimensions of benefit that collectively constitute the ideal solutionfor the job: the “job spec,” or blueprint for successful innovation.

Breakthrough Winners nail poorly performed jobs:All the strength, half the weight.

Who, when, where

Desired progress, outcome, experience or solution

Complication, compromise, trade-o�, or struggle

1. Buying and using a product that imperfectly performs the job2. Cobbling together a workaround solution involving multiple products3. Nonconsuming compensatory behaviorRemember: Sometimes the struggle is discernable and quite clear; other times, especially when consumers have developed compensating routines, the struggle is far less obvious.

CIRCUMSTANCE STRUGGLING MOMENTS CRITERIA SOLUTION

DIRECTLY VERIFIABLE ELEMENTS INCLUDE: ELEMENTS THAT NEED TO BE INFERRED INCLUDE:

criteria

are ALWAYS

circumstance

speci�c

WHY ARE JOBS SO IMPORTANT?• Understanding the job reveals why (the cause) people purchase and use products and services, as well as

why they sometimes behave in ways that involve no purchase at all (nonconsumption).

• Innovation initiatives that are organized to resolve well-defined yet poorly performed jobs proceed with purpose and efficiency. Conversely, initiatives untethered to specific jobs lack meaning and proceed haphazardly, if at all.

• Viewing the marketplace through the lens of consumers’ jobs to be done redefines categories (typically far larger than conventionally envisioned) and reframes competitors (typically more numerous and diverse than

conventionally considered).

• Jobs Theory focuses the insight process on the search for circumstances of struggle, unmet aspirations, and pools of nonconsumption. Demand Driven Insights identify poorly performed jobs.

• Jobs Theory creates a shared purpose and common language that facilitates communication and integration across diverse functional areas. A well-defined job enables efficient development as well as in-market success.


NAMENAMENAMENAMENAME

SUCCESSFUL INNOVATIONS RESOLVE CONSUMER CIRCUMSTANCES OF STRUGGLE — AND YOUR CONCEPT SHOULD TOOCreating an appealing product concept is an important innovation milestone. A concept conveys the promise that the product will fulfill.

MOST CONCEPTS INCLUDE:*

HOWEVER, ONLY 1/3 SUCCEED IN PRE-MARKET TESTING.

= 2,000 concepts tested annually

WHY? ONLY

OF CONCEPTS FULLY DESCRIBE THE CONSUMER’S CIRCUMSTANCE OF STRUGGLE:

The situation in which the innovation could help solve a problem or fulfill an aspiration. As a result, consumers fail to connect with the product idea.†

PRODUCT BENEFIT

95%

CONSUMER INSIGHT

80% REASON TO BELIEVE

70%


A COMPLETE CIRCUMSTANCE OF STRUGGLE EXPLAINS:

WHO IS STRUGGLING

WHEN THEY ARE STRUGGLING

WHERE THEY ARE STRUGGLING

* Based on an analysis of more than 600 concepts from 40 clients across 30 countries and 60 categories. Concepts were coded by a panel of experts.† Many factors have been shown to contribute to concept success, including: collaborative ideation, testing a wide range of ideas with consumers, and conveying key messages in a clear, focused way.‡ Data based on Nielsen’s Factors for Success concept testing framework, which is highly predictive of in-market success.

These concepts help to sharpen the connection between the “job to be done” in consumers’ lives and the product’s key messages and benefits. As a result, consumers are more likely to “hire” these products.

CONCEPTS THAT CLEARLY EXPRESS A CIRCUMSTANCE OF STRUGGLE PERFORM 58% BETTER‡

BE MORE INNOVATIVE

BE MORE RELEVANT

HAVE AN ADVANTAGE OVER SIMILAR PRODUCTS

BE A BETTER VALUE

Consumers perceive concepts with a complete circumstance of struggle to:


O R G A N I Z I N G F O R I N N O V A T I O N S U C C E S S :


ne of the most frequently asked

questions of the Breakthrough

Team, Nielsen’s innovation

business partners and Cambridge

Group principals is how best to organize

the innovation function. Should it be

within the business unit or stand as an

independent corporate function? Should

we create a “blue sky” or “breakthrough”

group separate from our existing

operations? Should innovation report up

through marketing or R&D, and where

should consumer insights live? Should we

create an innovation “center of excellence”

or a chief innovation officer role to ensure

best practices are shared company-wide?

The list goes on and on, and you’ve

probably wrestled with these important

questions inside your company as well.

Given the frequency of the

reorganizations, the diversity of

approaches applied and the variability of

results, there’s actually a very rich sample

for researching the question of how best

to organize. However, our extensive client

experiences reveal few patterns or credible

clues. In fact, the lack of patterns poses

a more fundamental challenge: Are we

asking the right questions? Are we even

adjusting the right variables or pulling the

relevant control levers?

Jobs Theory can help us. It turns out that

most companies are framing the “How

should we structure ourselves?” question

in a fundamentally unhelpful way. Typically,

leadership focuses on “organizing” into

some ideal vertical structure based on

function or geography or business unit or

technology or customer segment or brand

or industry category. Regardless, the angle

of analysis is fundamentally vertical: who

reports to whom, which budgets sit where,

who is responsible for what, where the

P&L sits and the like.

What Jobs Theory compels us to do is shift our angle of analysis

from the vertical silo to the horizontal alignment with the desired

progress of the end customer. In other words, the key organizing

question is this: How do we best integrate across functions

such that the end-to-end internal process is perfectly configured

to perform the customer’s job to be done? Kellogg’s found

Breakthrough success with Cheez-It Grooves, for example, by

tightly integrating the brand, innovation, R&D and supply chain

teams, rather than working sequentially and independently.

A “REORG” IDEA WORTH USING? INTEGRATE YOUR

ORGANIZATIONAL RESOURCES INTO PROCESSES THAT PERFECTLY

FULFILL THE CUSTOMER’S JOB TO BE DONE.

Our working hypothesis for why so many corporate

reorganizations fail to deliver desired results is that they merely

shift from one form of vertical organizational structure to another

form of vertical organization. Reporting lines for innovation might

shift from marketing to R&D or reassign P&L responsibility to

the region rather than the business unit and reorganize country

managers into regional zones, but

all of these common types of moves

are just so much shuffling of the

deck chairs. One order might prove

marginally better than another, but

our belief for why so few of these

efforts pay out is that precious few

are guided by the end customer’s job

to be done. Consequently, they apply

the wrong lens—hierarchical vertical

organization, rather than the job-

aligned horizontal integration.

Remember what Jobs Theory teaches

us: new products succeed because

customers hire them to perform

important jobs in their lives. Consumers pull products into the

flow and fabric of their daily lives in order to resolve struggling

moments and trade-offs. New products succeed by enabling

desired progress, fulfilling unmet aspirations and creating desired

experiences.

When managers focus on perfectly fulfilling the customer’s job to

be done, they ask themselves the right question: How should we

> THINK ORGANIZATIONAL INTEGRATION, NOT ORGANIZATIONAL HIERARCHY

NEW PRODUCTS SUCCEED BY ENABLING DESIRED PROGRESS, FULFILLING UNMET ASPIRATIONS AND CREATING DESIRED EXPERIENCES.


You don’t have to sit through too many board meetings,

strategic-planning sessions or acquisition integration

meetings to determine that the essential unit of most

organizational structuring efforts is a “box.” A box generally

signifies a person in a defined role with lines identifying

associated reporting relationships. But Jobs Theory has

very little to say about the vertical organization of these

nodes on the org chart. Instead, Jobs Theory compels

managers to think less about the nodes and far more about

the interfaces: How do the nodes across functional silos

interact so as to perform the customer’s job to be done?

> THINK INTERFACES, NOT BOXES OR NODES

integrate across functions in order to nail the customer’s

job? Notice the shift. The relevant axis for orienting our

organizational-structuring effort is not the vertical function,

but the horizontal process for fulfilling the job.

WHO IN YOUR ORGANIZATION OWNS THE CUSTOMER’S

JOB? WHO IS RESPONSIBLE FOR ITS PERFECT

FULFILLMENT? DO THESE PEOPLE HAVE THE DECISION

RIGHTS TO ALLOCATE RESOURCES AND ESTABLISH

OPERATIONAL PRIORITIES TO NAIL THE CUSTOMER’S

JOB SPEC?

In our experience, nobody owns responsibility for the end

customer’s job, and in the organizational conversations

that proceed, the job has no voice. When we’re asking the

wrong questions and framing the issue incorrectly, it’s

unsurprising that so few reorganizations deliver desired

results.

Most stage gates are constructed as

a series of if-then checkpoints: If you

meet the established requirements,

then you may proceed. There are all

kinds of good reasons—reasons that

go all the way back to Adam Smith

and the pin factory—for why process

structure is important. Processes work

as long as inputs are consistent and

a standard set of rules can effectively

govern how items move through a

process and what happens along the

journey.

Innovations, especially the

breakthrough variety, do not come

with an attached set of instructions

for how they should be developed.

Specifically, there is no standardized

set of rules that can effectively govern

how discontinuous initiatives should

be passed along among functional

areas so the essential elements of the

offering that are critical to performing

the customer’s job-to-be-done endure.

The challenge of the development

process is to add all of the dimensions

of benefit that enable the customer’s

desired progress and experiences

yet add nothing else that would only

increase cost or distract or confuse

the customer. Rigid stage gates do not

do this. They do the opposite. Rather

than adapt the process to ensure

perfect fulfillment of the job, they

force the initiative to conform to the

strictures of the stage gate mandates.

We and many others have made much

of the need for cross-functional teams

in pursuit of Breakthrough Innovation,

and here is why: process interfaces

are modular (subject to a clear spec)

under normal business conditions

but interdependent when it comes

to discontinuous, transformational

innovation.8 Consequently, managers

actually must work cross-functionally

to manage the interdependent

functional interfaces; otherwise,

essential meaning will be lost. If this

sounds inefficient, in a way it is, but

the alternative is to be extremely

efficient at doing the wrong

things. Unfortunately, too many

organizations actually reward doing

the wrong thing fast and penalize

doing the right thing in the time

and fashion required for in-market

success. Not good.

> STAGE GATES: THINK HOW—NOT WHEN—PROCESS STEPS CONNECT, AND NEVER FORGET THE WHY


It’s actually shocking—and we use

that word advisedly—but we have

seen great managers in world-class

organizations essentially being taken

captive by their governing stage gate

process. In other words, the timelines

they follow, the decision-making

protocols they apply and the resource

allocation criteria they employ are

dictated not by the consumer’s job

to be done or even by the long-term

(two to three years, rather than two

to three months) financial interests

of the enterprise, but by what is best

described as a “machine.”

Chobani Flip, Cheez-It Grooves and

Butterfinger Peanut Butter Cups are

not the first Breakthrough winners to

highlight the importance of delaying

launch dates in order to nail the job

and perfect the offering.

As we called out in the “New

Growth Order: CPG on the Cusp

of Transformation” section, the

successful innovation processes of

the very near future will be adaptable.

For each initiative, there is an ideal

process that should leverage all

relevant experience and should be

both better than and different from

prior efforts. In short, the innovation

process should be mindful of the

nuances of the specific initiative as

well as consistent with the ultimate

purpose of the innovation effort.

When this is not the case—when

innovation activities are merely slavish

responses to an inanimate, inflexible

stage gate machine—innovation

outcomes will suffer.

As Geoff Tanner noted, “If we had

subjected our three Breakthrough

Winners to the constraints of

our stage gate process with the

same requirements as sustaining

innovations, none of them would have

made it through. These initiatives

were designed with transformational

intentions, and they required distinct

development processes.”

Finally, in organizations in which a

machine-like process trumps all else,

the creative spark required to create

a future different from the past has

no chance of catching flame. Said

differently, folks won’t even bother

trying, because honestly, what’s the

point? Either transformational ideas

will be killed because they don’t

conform to established processes

and rules, or they will be so badly

distorted in order to conform that

their inherent difference and value will

be engineered out of them.

Dysfunctional and fundamentally

flawed innovation stage gate

processes are a major reason why the

industry is enduring an innovation

crisis. Only breakthrough leadership

will address this urgent reality.

A culture of

breakthrough

leadership places

high value on both

economic and

learning outcomes.

LOW Economic Value

HIGH Economic Value

One-offs

Waste

Home Runs

Proprietary Knowledge

CALE

ND

AR M

ANAG

EMEN

T

HIG

H

Learning ValueLO

W

Lear

ning

Valu

e

BREAKTHRO

UG

H LEAD

ERSHIP

PRIORITIES DETERMINE BEHAVIORS, WHICH DRIVE OUTCOMESREPETITION OVER TIME SHAPES CULTURE

Use this framework to map actual innovation initiatives. What questions, insights or opportunities for improvement emerge?

Cultures that focus

myopically on

efficiency metrics

and quarterly results

tend to generate

considerable

innovation waste at

worst—and “one-off ”

successes at best.


ven as we strive for and celebrate blockbuster

innovation success, not all innovations can be

“breakthrough,” nor should they be, as we noted

at the beginning of this report. Innovation portfolios

must balance the need to keep existing brands fresh—to

drive growth today—with the very different challenge of

redefining the marketplace with products that drive growth

tomorrow.

Reflecting this reality, most companies categorize new

product initiatives using segmentations such as tiers one,

two and three; gold, silver and bronze; or breakthrough,

reframe and refresh, to name a few. Three-bucket

segmentations are the most popular, though we work

with clients who reduce to two and others who expand to

four. Whatever we call it and however we slice it, we need

to “future-proof” and better align our portfolios to meet

current, latent and emerging demand of an ever-changing

set of consumers and their needs.

A SPECIAL FEATURE

PORTFOLIO PROBLEMS

TIER 1 – CATEGORY CREATION & TRANSFORMATIONTIER 2 – BRAND EXTENSION & EXPANSIONTIER 3 – REFRESHES

CPG new-product activity is very high, but less than 20% of initiatives generate greater than $10 million in year-one retail

sales, and 54% produce $3 million or less. Given the urgency to grow and the considerable expense associated with every

innovation initiative, these results are alarming.

FEWER THAN 20% OF CPG INNOVATIONS GENERATE MORE THAN $10 MILLION IN SALES IN THEIR FIRST YEAR

$10M+

$1-3M

<$1M

$3-10M

B A L A N C I N G T H E I N N O VAT I O N P O R T F O L I O


A balanced innovation portfolio

requires more than a tiered naming

convention and good intentions;

it requires leaders to manage the

landscape of resources, processes,

and priorities in a holistic manner

to deliver the desired growth and

operational efficiency. Ultimately,

leaders ensure teams are doing the

right projects (strategic alignment)

and doing those projects right

(Demand Driven Innovation).

In the interest of clarity, we eliminate

the murky middle tier and speak only

of “sustaining” and “discontinuous”

innovations. We generally encourage

leaders to tilt their portfolio balance

toward more focus on discontinuous

projects. Growth demands that

we create and expand markets,

categories and brands by prioritizing

underserved consumers and poorly

addressed circumstances. Search

for opportunities to attract new

users, increase day parts and usage

occasions, and create benefit bundles

that earn a premium. At the same

time, sustaining innovation should

complement this work, leveraging

existing brands and assets to stay

relevant, sustain distribution and

maintain price.

To be successful, each project should

serve a clear and additive purpose,

with the organization aligned in

understanding the project’s role in the

innovation strategy. All innovations,

no matter how near in or far out,

AMBIDEXTROUS INNOVATION MANAGEMENT: MAKING THE BALANCE HAPPEN

Leaders are hungry to find growth and operational

efficiency, and most are finding that the high level of

activity is producing neither. They lean too heavily on small,

inconsequential new products and pack changes that offer

very limited consumer appeal. Leaders believe tier-two

and -three projects are low risk, when in fact, the results

produce limited growth and high waste, thus compounding

risk. There is too much thrown against the wall, absent a

purpose and consumer job, perpetuating a costly, broken

system.

In our interviews, most leaders are surprisingly aware of

the systematic waste:

• They describe the high level of activity as “churn,” even

deriding the practice as “SKUs for news.”

• Multiple executives acknowledge that their innovation

“funnels” operate as “tunnels” through which

initiatives pass via stage gates that never seem to

close.

• We encounter widespread recognition that the plethora

of “tier-two” and “tier-three” projects justified by

“needing to stay fresh” simply mislabel motion as

progress, and the launches rarely exceed the sales of

what the new products replaced.

• They talk the talk of “fewer, bigger, better” while

walking a different path.

• Few leaders have a holistic view of how their

innovation activities fit together to deliver the required

financial and share-growth goals.

Despite this common awareness, when it comes to

resource allocations, innovation portfolios are anything but

balanced. We find that innovation activity and investment

concentrate overwhelmingly in the sustaining tiers.

Independent McKinsey research finds the same: “Most

established companies err on the side of overloading their

innovation pipelines with relatively safe, short-term, and

incremental projects that have little chance of reaching

their growth targets.”9

LEADERS BELIEVE TIER-TWO AND -THREE PROJECTS ARE LOW RISK, WHEN IN FACT, THE RESULTS PRODUCE LIMITED GROWTH AND HIGH WASTE, THUS COMPOUNDING RISK.


A SPECIAL FEATURE

should enable a desired experience for consumers. Each

tier demands a distinct process by which it proceeds from

idea to launch.

IN TERMS OF ALIGNING INITIATIVES WITH

APPROPRIATE DEVELOPMENT PROCESSES, THERE IS A

BASIC LITMUS TEST MANAGERS CAN APPLY: CAN WE

TRUST THE EXISTING PROCESSES AND INCENTIVES

TO DEVELOP THIS INITIATIVE FAITHFULLY AND FULLY,

OR WILL THE ESTABLISHED STRUCTURES BEND THE

INITIATIVE INTO CONFORMITY?

The sustaining innovations that keep our current business

strong typically align with the processes and priorities of

our established businesses. These projects will leverage

existing assets and know-how, require relatively little

investment, demand little explanation to our retail

partners, and provide a return measured in months, not

years. As noted previously, because too many initiatives

are being ushered through the stage gates with inadequate

consumer validation, the process even for the lower-tier

sustaining innovations is not performing as it must. Once

we scrub our pipelines of these “innovations without a

cause” (to borrow language from the 1955 James Dean

classic), these initiatives should accelerate through

the development and assessment stages expeditiously,

supported by efficient use of innovation science and

predictive analytics.

Discontinuous innovations, by contrast, tend to create

unfamiliar challenges for existing processes and expertise.

Additionally, organizational incentives and resource

allocation rules are specifically designed to discourage

investments in activities that do not improve operating

efficiencies by leveraging existing capabilities. Discontinuous

innovation is the work of explorers, not exploiters, to borrow

the AB InBev terminology. Managers need a distinct mind-

set, asking questions such as: How big can we make this?

What needs to be true in order for this to succeed?

Capital expenditures, longer development horizons and

sustained marketing support should be expected. Category

expansion, sustained growth and follow-on platform

extensions also should be expected. To expect all of these

changes to flow from the same processes and incentives—

and managers—that drive sustaining improvements and

this quarter’s number is foolhardy, yet this is too often the

industry reality.

THE RESULT OF A ONE-SIZE-FITS-ALL APPROACH

TO INNOVATION DEVELOPMENT IS TREMENDOUS

AND SYSTEMATIC WASTE—AS WELL AS THE

COMPOUNDED OPPORTUNITY COST. WHEN SENIOR

LEADERS WRING THEIR HANDS OVER THE THREATS

OF NIMBLE UPSTARTS, THEY GENERALLY DO SO

WHILE NEGLECTING THE EXPONENTIALLY MORE

DESTRUCTIVE FORCES DESIGNED RIGHT INTO THEIR

OWN PROCESSES.

All initiatives, sustaining and discontinuous, should have a

clear purpose answering these basic tests:

• Does this offering enable desired progress in my

customer’s life?

• Does it resolve a struggling circumstance?

• Does it do a job better than what consumers hire

today?

Beyond these common core values, we’ve identified seven

areas in which conscious effort and concrete steps need

to be taken in order to make the promise of a balanced

innovation portfolio a reality. Is this a comprehensive

checklist ensuring success? By no means. But if you get

these items right, you’ll be thinking and acting like a

balanced-portfolio innovator.

You’ll want to devise the list that’s right for your

organization, but these are some of the major elements

requiring differential management:

A BALANCED-PORTFOLIO DIAGNOSTIC

B A L A N C I N G T H E I N N O VAT I O N P O R T F O L I O


SUSTAINING DISCONTINUOUS

LOCUS OF IMPATIENCE

ROLE OF STAGE GATES

INCENTIVES

SENIOR SPONSORSHIP

METRICS

TEAM STRUCTURE

IN-MARKET SUPPORT

HORIZON

Be impatient for hitting timelines, budgets and forecasts.

Keep the trains on time and on budget while ensuring initiatives are additive to consumers and the full portfolio, never assuming that “close-in” means low risk. Use predictive analytics to guide decisions.

Senior leaders can safely delegate decisions to the team and process, applying established priorities and resource allocation rules.

Modular handoffs from function to function maximize efficiency with no loss of fidelity to the core idea.

Established incentives align for effective development.

Assess potential using the natural metrics for sales and margin that organizations have in place for ongoing operations. Adhere to them.

Provide sufficient execution support to achieve goals, while leveraging proven and cost-effective sales and marketing elements.

Be impatient for perfection. Nail the job. Make no compromise to the demand-driven insight in the faithful, painstaking development and activation of your commercial offering.

Design the gates and action standards that are appropriate for each individual initiative. At each step of development, ask: Are we staying true to the insight? How can we make this initiative even bigger, even better?

These initiatives fail without a senior champion and protector.

Functional interfaces are interdependent and require integrated, cross-functional teams collaborating from inception throughout development and launch.

Consciously liberate managers from the strictures of short-term mandates. Proper incentives need to be custom-crafted for discontinuous innovations to flourish.

Nothing—repeat, nothing—systematically kills discontinuous innovations like return on assets and similar efficiency metrics. Discontinuous efforts should deliver strategic (as well as economic) benefits. Share of growth is typically a more relevant measure than share of market.

Commit to best-in-class support and execution to drive Reach, Resonance and Reaction to make the launch as big as it can be and sustain into years two, three and beyond.

Until senior leaders begin to finance, staff, develop and evaluate fundamentally different types of innovation in appropriately

differentiated ways, balanced, high-performance innovation portfolios will prove elusive and mythical. A culture of innovation

success requires leaders to push their organizations to think differently and act differently. It’s the only way to perform differently.


e are extremely bullish on the opportunity for Breakthrough Innovation—

and high-performance, balanced innovation portfolios—in the CPG

industry. As we noted at the outset, the marketplace of 2030 will look

wildly different than the marketplace of today:

• The products will be different.

• Many brands will be new.

• Shopping habits will evolve.

• Traditional “category” definitions will

lose utility and meaning.

• Consumers will become increasingly

diverse in their tastes and priorities.

• New online-enabled channels will

emerge.

• There will be a proliferation of new

business models.

• Innovation will be far less product-

centric.

• Smart technologies will continue

to transform how consumers

shop and use, while also affording

manufacturers new opportunities for

innovation.

• Collaboration spanning multiple firms

and industries will be widespread.

• There will be a new age of R&D

focused less on product benefit and

food science and more on leveraging

digital, mobile and social technologies

to enable desired consumer

experiences.

• Innovation will also address the

need—and the opportunity—of

feeding and caring for a global

population of 10 billion people.

• Food, nutrition and health care will

become more intertwined.

• Sustainability will move from

buzzword to table stakes. Successful

companies will make the planet a

better place for all forms of life.

This is not to play soothsayer or futurist but to underscore that the future will be

created by those who harness the energy of the entrepreneur and the power of

innovation. We look forward to assisting those who want to lead.

The 2016 Breakthrough Winner Spotlights provide real-world case studies of

what transformational innovation looks like and how to achieve it. Remember,

much better innovation outcomes are absolutely a matter of choice. Innovation

is far more science that happenstance or luck. Jobs Theory provides us with

an understanding of the causal mechanism for consumer purchase and use.

The Demand Driven Innovation system gives us the framework for converting

opportunity into outcomes.

There is little doubt that the accelerating pace of change will have leaders and

laggards. Laggards will find little margin and tight windows to regain footing

before they tilt toward irrelevance and extinction. Leaders will create a future in

which opportunities abound, if only because of the creative opportunities afforded

by the relentless advance of technology and the inherent creativity of the human

spirit. Organizations that can harness and nurture both—the technology and the

creativity—will define the future, and we are confident that it will be a remarkable,

exciting place.


WE EXTEND SPECIAL THANKS TO THIS YEAR’S WINNERS, WHO HAVE NOT ONLY SHOWN THE WAY THROUGH THEIR ACTIONS BUT SHARE THEIR STORIES, BRINGING BREAKTHROUGH INNOVATION TO LIFE. THIS MAY JUST BE OUR BEST, AS WELL AS OUR BIGGEST, SPOTLIGHT COLLECTION EVER. SO BUCKLE IN FOR SOME RIVETING READS THAT OFFER PLENTY OF TRANSFERABLE WISDOM.

A final thought to consider as you read the following stories: If we were to add a subtitle

to the Spotlight section, it would be “Breakthrough Data.”

Confusing? Crazy?

The point is that the insights powering Breakthrough Innovation are stories, not

statistics. Stories are data.

Stories not only captivate Spotlight readers but also align teams and propel

development processes that retain fidelity to the insight. As Kraft Heinz’s senior director

of marketing, Geoff Feil, said in the context of 2015 Winner Lunchables Uploaded,

“It’s amazing how many meetings we didn’t have to have.” The data that provides the

aligning clarity is a simple, compelling story of a consumer struggling to make progress

in a specific circumstance—and every Breakthrough Winner has such a story at its core.

So enjoy this year’s amazing class of Spotlights. We hope that as you finish the report,

you will feel inspired to seek out compelling moments of struggle in your customers’

lives. That’s how you’ll begin your own breakthrough journey.

2016 BREAKTHROUGH INNOVATION REPORT PROJECT LEADERS

KRISTIN BEHRMANN KELSEY THORTSEN

This report is the product of a great team, working together, against deadlines, with

impossible authors—while never missing a beat in their day jobs.

The indefatigable 2016 Breakthrough crew:Genevieve Aronson, Mike Black, Anqi Chen, Daisy Dimov, Kim Gaskins, Courtney Gaynier,

Katie Gottron, Kayla Grayson, Aritra Kanjilal, Lisa Karigan, Nicholas Kaufman, Micah Kim,

John Lavelle, Al Lemieux, Jen Loukes, Steve Luebkeman, Regine Mechulan, Emily Mescher,

Lauren Minton, Kevin Nielsen, Andrew Oberright, Courtney Ramirez, Saul Rosenberg,

Craig Smith.

Thank you!


WINNER SPOTLIGHTS

SPOTLIGHT #1 ARM & HAMMERTM CLUMP & SEALTM

SPOTLIGHT #2 BAI

SPOTLIGHT #3 BREYERS® GELATO INDULGENCESTM

SPOTLIGHT #4 BUTTERFINGER® PEANUT BUTTER CUPS

SPOTLIGHT #5 CHOBANI FLIPTM

SPOTLIGHT #6 DOLE® CHOPPED SALAD KITS

SPOTLIGHT #7 MILK-BONE® BRUSHING CHEWS®

SPOTLIGHT #8 NASACORT® ALLERGY 24HR

SPOTLIGHT #9 OSCAR MAYER P3

SPOTLIGHT #10 SALLY HANSEN® MIRACLE GELTM

SPOTLIGHT #11 SKINNYPOP® POPCORN


S P O T L I G H T # 1

ARM & HAMMER™ CLUMP & SEAL™

A N “I M P O S S I B L E ” Q U E S T I O N U N L E A S H E S A N U N R E A L O U TC O M E

SOMETIMES IT TAKES AN “IMPOSSIBLE” QUESTION

to spark a Breakthrough win, and certainly we have seen

this before. For Church & Dwight’s Arm & Hammer

cat litter team, the question was this: If price were no

issue, could we make litter box odor completely disappear?

Despite decades of cat litter improvements, odor was

still the dominant complaint among cat owners. As Barry

Goldblatt, the company’s vice president of market research,

noted, “We constantly measure ‘consumer need gaps,’ and

there was always a persistent gap relating to odor.”

“Litter odor creates a ‘glass ceiling’ of consumer

satisfaction,” added Bryan Harpine, director of global new

products. “Across all manufacturers, nobody was doing

better than 75% satisfaction, which is a pretty low ceiling.

This dissatisfaction led to numerous undesirable quality-of-

life consequences, from the functional:

“Cleaning the litter box is the worst job in the house . . .

worse than cleaning the toilets.”

. . . to the emotional:


“I just feel like a bad homemaker if my house smells.”

. . . to the social:

“Sometimes I feel embarrassed when I have guests over.”

“Consumers were passionate in their dissatisfaction and

said so,” Harpine continued. “This sentiment prompted

70% of cat owners to use odor-mitigating accessories.

They bought sprays or air fresheners, or sprinkled baking

soda on the litter. The dissatisfaction also explained

why consumers were loath to pay premiums; even the

best litters didn’t live up to expectations. And here’s an

interesting paradox: While it had been difficult historically

to raise prices even 3% to 4% with a new product, the

category showed tremendous price elasticity for this

new extraordinary benefit. In other words, consumers

would happily pay more, but only for a litter that actually

performed against total odor removal. Across the

Breakthrough Innovation Project, we have seen this

consistently: Products that nail jobs command price

premiums.”

“And this is where we set our sights,” Harpine

underscored. “Replace the ‘glass ceiling’ with the ‘gold

standard.’ And the gold standard is to have guests over and

have them ‘not even know I have a cat!’”

“Just contemplating this notion had a profoundly

motivating effect on the company,” Harpine recalled.

“Church & Dwight has been extremely cost conscious

long before the recent industry cost-cutting movement,

and here we were, asking a revolutionary question: Could

we transform the industry if cost were no issue? It was a

challenge that brought cross-functional leaders and the

ranks together in pursuit of this goal, and we were really

motivated both by the prospect of industry transformation

as well as by the opportunity to make substantial quality-of-

life improvements to our customers’ lives. In the context of

cat litter, this was one of the most remarkable missions we

ever took on.”

“The thing that happens when you ask a huge question,”

Harpine described, “is it unleashes creativity: You’re out

of the sandbox, and now you have the whole playground.

Suddenly you are open to ideas that you never would have

considered previously. One of the first consequences of

our expanded ambition was to engage a team of experts

to perform a global technology search for substrates that

could lock in odors. We didn’t even ask them to focus

on litter, because we didn’t want to constrain thinking or

searching. They returned with 145 candidates, which we

evaluated and reduced to a short list of 10. Among these,

there was one with demonstrated ability to seal in odor

such that there was, literally, zero detectable smell.

“It was one thing to have a promising substrate; it was

another to have a commercial product that we could

produce at scale and, eventually, sell at a price consumers

were willing to pay. We spent four years getting the

substrate right and formulating the necessary blend of

additives as well as developing the coating technology

to get to an effective product. And by effective, we were

very clear on the claim we needed to make: a ‘seven-

day odor-free home.’ This would be unprecedented, and

nonetheless, on this point, there was complete team

commitment.

“Notably, producing this new litter required $10 million

in capital expenditures, and it was as much the prospect

of revolutionizing the industry as any business case that

motivated our management to approve the investment.

This was a cause we believed in, and we were determined,

organizationally, to succeed.”

THE THING THAT HAPPENS WHEN YOU ASK A HUGE QUESTION IS IT UNLEASHES CREATIVITY: YOU’RE OUT OF THE

SANDBOX, AND NOW YOU HAVE THE WHOLE PLAYGROUND.

Premium pricing is an innovation consequence, not an innovation input. The sequence matters.

SPOTLIGHT #1 | ARM & HAMMER™ CLUMP & SEAL™


“Once we had the product ready,” recalled Melissa Martin,

the marketing vice president, “there was no doubt. We

contracted a national consumer research firm, and they

substantiated the ‘seven-day odor-free home’ claim via

double-blind in-home testing. That result was confirmed

in a subsequent market simulator test, where the product

far exceeded expectations and previous experiences with

marketed litters. From a product perspective, we had done

the impossible, and now we had to take it to market.”

“We did a number of things very differently on this

initiative,” Harpine reflected. “For starters, we began

collaborating with our national retail accounts two years

ahead of the launch. There were three pillars to our case

for why they should get behind this product in a major

way:

• “First, the consumer benefit goal of a seven-day odor-

free home was demonstrably powerful.”

• “Second [was] the strategic appeal of “breaking the

glass ceiling” of consumer satisfaction.”

• “Third [was] the business case for a premium-priced

litter, based on the transformational benefit this litter

would deliver for the consumer.”

“We shared our research with the retailers as well as our

insights on price elasticity—that consumers were more

than willing to pay more for a litter that truly did the

job. This advance groundwork with retailers generated

tremendous pull for the product, enabling us to accelerate

distribution and gain prominent shelf space in the store

once we launched.”

“We did something else to win at the shelf which was

huge,” Harpine continued. “The orange package is an

iconic part of our Arm & Hammer brand identity. It links

to our essential equities rooted in our century-old baking

soda franchise. However, we were about to introduce a

truly revolutionary product. Internally, we were challenging

and questioning every conceivable assumption and

established belief, so it was only natural that we started

rethinking the color scheme of the pack. We tested

various ideas just as we had through the process and the

black box really popped. It signaled three things to the

consumer which were exactly the messages we wanted

conveyed: this litter is powerful, it is, truly differentiated,

and it is believably premium. Importantly, we knew we had

premium benefits, not just premium packaging.”

“Another critical element we tested was price point,”

Harpine explained. “Remember, this is a category in which

a 5% price increase is a very tough sell, and we were

experimenting with 30%, even 50%, price premiums. It

turned out that 50% was simply too much, but 30% was

acceptable and offered the best business case, so that’s

what we went with.”

“Getting the consumer to actually try the product was the

key, though,” Martin elaborated. “We couldn’t afford to

scare consumers away at shelf with sticker shock, so we

implemented a range of trial sizes and coupons to lower

the barrier to trial. We also headlined a 100% satisfaction

guarantee: ‘Any odor smell, return it for a full refund.’ We

were that confident. But once consumers experienced the

benefit of an odor-free home, they loved the product. It

was like we were giving them their house back—and the

confidence and peace of mind and joy that went with it.

Clump & Seal also relieved the stress of hosting guests: no

more shame, embarrassment, candle lightings and litter

hidings.” Martin shared some customers’ testimonials:


OUR SOLUTION: CLUMP & SEAL NEW &

DIFFERENT TECHNOLOGY

100% Satisfaction“Odor Free Home”50% – 75% Odor Control Satisfaction

Transformational Innovation

Current Litter on the Market

BREAK THROUGH ODOR “GLASS

CEILING”


• “It controlled the odor so well that my mother-in-law thought we no longer

had a cat!”

• “It was like the cat was just gone!”

• “I’d pay extra for it.”

“Consumers were thrilled with the product,” Martin continued. “Our retailers

were ecstatic to see new life and profit in this category. We supported the launch

with effective media that really brought the insight to life. In one early TV ad,

a woman pulls the litter box from under her coffee table, and her friend sitting

next to her says, ‘Oh, I didn’t know you had a cat.’” Martin added that this “very

simple” message “connects perfectly to the emotion and anxiety that we knew

we could resolve.”

“The launch was a tremendous success, with first-year retail sales approaching

$100 million and better than 50% growth in year two. What we’ve been looking

for since the launch,” Harpine noted, “has been ways to extend the runway for

this terrific brand by identifying targeted customer need gaps. For example, we

have launched a lightweight version as well as a bacterial-odor-control product

for consumers more conscious about bacterial odors. So we continue to extend

and leverage the platform.”

“Reflecting on this launch,” Harpine summarized, “not only did we achieve a

lot, we learned some important things. First, once you’ve done transformation

the first time, you are much more open to seeing it and doing it again. It’s

as if the blinders come off, and this ties directly to a second lesson: the

value of asking ‘impossible questions.’ This all began with this seemingly

impossible notion of ‘If cost were no issue, could we create a litter that would

actually eliminate odor completely?’ If we don’t ask that question, none of

this success happens. Third [is] the power of a compelling story. We are very

much a financially driven company with a strong performance record with our

investors, but sometimes you can get so focused on the numbers that you

lose sight of what drives the long-term game, and a hugely compelling story of

transformation has the effect of elevating everyone’s performance and engaging

with the potent consumer struggles that offer the real growth opportunities.

Fourth, when innovation becomes a company-wide mission, the power to create

and realize is exponentially greater than when innovation happens in functional

silos. It’s when you align diverse skill sets at all levels with a huge goal that you

create a powerful catalytic effect that lifts everyone’s game. Everyone wins—the

retailer, the manufacturer and the consumer.”

Breakthrough Innovation doesn’t just deliver great products; it also makes a

difference in consumers’ lives, inspires teams, unifies organizations and builds

better companies. In showcasing all of these qualities, Clump & Seal sealed the

deal on a category-transforming Breakthrough win. n


WHEN INNOVATION BECOMES A COMPANY-WIDE MISSION, THE POWER TO CREATE AND REALIZE IS EXPONENTIALLY GREATER THAN WHEN INNOVATION HAPPENS IN FUNCTIONAL SILOS.



BAIF I N D I N G A S U P E R F R U I T I N A WA S T E S T R E A M—

A N D T U R N I N G I T I N TO A B R E A K T H R O U G H W I N N E R

“I NEEDED A SALES GUY, AND MY DAD NEEDED A

job,” Bai founder and CEO Ben Weiss recalled, “so that’s

how we started selling. My dad and I took the first bottles

of Bai to local retailers we knew in Princeton, N.J., and

made the sales one-by-one, door-to-door. The retailers may

have just been being nice at first—giving some local guys

a shot. But we really believed in our product, so we made

the most of these initial opportunities—giving away a ton

of samples and telling people about the drink and why we

loved it.”

It turned out that the shoppers loved the product, too, and

from those humble beginnings in 2009, a Breakthrough

Winner was born.

The story begins years earlier, with Weiss graduating from

college with a strong entrepreneurial streak and a passion

for coffee. Spend time talking with him, and you realize he

loves everything about coffee—the plant, the farms, the

history, the community, the roasting, the retailing, the café

culture and the product innovation. And despite his years

in the broadly defined coffee industry, one thing he couldn’t


SPOTLIGHT #2 | BAI

make sense of was why the coffee fruit, the actual “cherry” that surrounds the

coveted bean, was systematically discarded as a waste product. As Weiss first

learned from Indonesian farmers, the cherry is rich in antioxidants and enjoys

many nutritional and medicinal uses in the traditional practices of coffee-

growing societies. “It’s a legitimate superfruit,” Weiss noted, “but in First World

markets, it’s used in a few nutraceuticals but generally just thrown away.”

Weiss determined to turn this fruit into a drink that consumers would love, and

he was convinced there was an opportunity.

“To use your language of Jobs Theory,” Weiss reflected, “there have been a ton

of layoffs in the ‘sugary beverage’ industry. The decline of carbonated soft drinks

is old news, but there’s a broader trend with diverse drivers that are particularly

pronounced among Millennials and younger.” Weiss quickly rattled off the

following list:

• “They’re trying to make healthier choices.”

• “They want calories that will work for them, as opposed to empty calories.”

• “[There is] resistance to drinking calories, especially among women.”

• “‘Diet’ products are seen as outdated and offering undesirable trade-offs.”

• “[They have] interest in antioxidants and natural foods that keep you at your

best.”

• “[There is] unwillingness to compromise on flavor or taste.”

• “Younger consumers, particularly, are looking for new, exciting experiences

and brands. This is true in food and beverage, but it’s a generalizable

phenomenon.”

• “Authenticity matters, which is why you see the boom in craft beers,

farmers’ markets, boutique hotels and so many other businesses and

brands.”

“The initial products that my dad and I were delivering in 2009 were midcalorie,

and then in 2010, we introduced Bai 5, and it just took off. We had the black-cap

midcalorie and the red-cap five-calorie, and even though we had some super-

popular black-cap flavors, the weight of the consumer demand was all on the

Bai 5 red cap. To focus our resources and energy and expansion strategy, we

shut down the black cap and doubled down on Bai 5—ultimately just dropping

the 5 and calling it Bai.”

“I think we did a number of things that were unusual for a start-up,” Weiss

explained. “One, we did a lot of consumer research early, and two, we focused

on building ‘distribution equity’ as much as brand equity. In my estimation, too

many CPG start-ups focus mostly on the product and the brand, figuring that

they’ll just pay the slotting fees or get it into stores one way or another. They

don’t prioritize distribution as a strategic pillar. We did. Building distribution,

cultivating retailer relationships, working hard on the in-store execution—this

is mundane stuff, but it’s the bones and flesh of great consumer products

BUILDING DISTRIBUTION, CULTIVATING RETAILER RELATIONSHIPS, WORKING HARD ON THE IN-STORE EXECUTION—THIS IS MUNDANE STUFF, BUT IT’S THE BONES AND FLESH OF GREAT CONSUMER PRODUCTS BUSINESSES.


businesses. We didn’t allow the growth to get ahead of our distribution

capability. As a result, we’ve been able to grow at triple-digit rates for five years,

maintain operational and quality control, and feel confident that we’ll sustain

our growth rate for the next five years.

“We were growing fast, but we really built the business in a very deliberate way.

We built our own ‘direct store delivery’ capability, and we focused on our in-store

real estate strategy: How do we connect with consumers in-store, and how do

we make this a huge win for our retail customers? Entrepreneurs overlook this

unsexy, block-and-tackle grunt work at their peril.

“Costco in the Northeast was our first big account, and they’ve been a great

partner. We did a bunch of four-day road shows (imagine a sampling and

shopper-engagement marathon) in their stores. These events were promoted

by Costco and invaluable in generating tons of consumer awareness and trial

while also proving ourselves to a huge channel partner. Our Costco success

also provided visibility to other chains, so we quickly began receiving calls from

grocery chains and mass discounters. Target also came onboard early and has

really helped us develop the brand in a fantastic way.”

“In many ways, we inverted the traditional model” by starting to offer the

product in warehouse clubs and getting into convenience stores later, explained

Weiss. Noting that convenience stores (C-stores) provide a chance to get many

consumer trials, he added that this channel is “appealing on that front, but

we felt strongly that if we invested in our distribution equity and built strong

partnerships with some key retail customers first, that we’d then be in a much

stronger position to manage the fragmentation and complexity of the C-store

universe later on.”

“I don’t emphasize the channel strategy and distribution elements because

they’re somehow more important than the consumer story,” Weiss explained.

“They’re not, but they are often overlooked, and they’re critical to success. The

whole time we’re building out our infrastructure and retailer relationships, we

are engaging with consumers every day in a very systematic way. Our ‘Bai-ology’

tasting sessions were structured to learn not only what consumers preferred but

why and what they were switching from. Again, using a ‘jobs’ frame: in order to

get hired, it really helps to understand what will get fired and why.

“If you look at our product line and also our source-of-volume data, there’s

structure and symmetry. There are products that pull, variously, from sodas,

juices, waters and teas. We’ve identified trade-offs associated with each of these

alternative beverage categories and offered options—in the form of enhanced

waters in a variety of flavors, both carbonated and flat—that are beverages with

no barriers. To me, and I think to many of our consumers, the magic of Bai is

that all of their other beverage options have some sort of trade-off, whether it’s

too much sugar, or not enough taste, or artificial additives or too much caffeine.

ONCE YOU SEE THE BEVERAGE LANDSCAPE AS CONSUMERS EXPERIENCE IT, THE IDEA OF A ‘BEVERAGE WITH NO BARRIERS’ IS A BIG IDEA.

SPOTLIGHT #2 | BAI


SPOTLIGHT #2 | BAI

Once you see the beverage landscape as consumers

experience it, the idea of a ‘beverage with no barriers’ is

a big idea. You also see that what is often described in

blanket terms as a ‘mature market’ is actually an extremely

diverse and dynamic landscape, rich in opportunity.”

“We live in a society in which many people are looking

to make healthier choices in their lives, and it turns out

that one of the very first things people change is what

they drink. It may be hard to give up pizza or burgers or

chocolate, but when people look for low-hanging healthy

alternatives, high-sugar

and high-calorie beverages

[are] the first place many

people go.”

“All of this helps explain,”

Weiss continued, “why

we have such high repeat

rates. On Amazon,

for example, our high

percentage of sales coming

from subscription helped

us win their Vendor of the

Year Award in grocery.

Bai offers a solution for

many people in frequently

occurring circumstances,

and it breaks all the historic

trade-offs and overcomes

historic barriers.”

“Consistent with all of the decisions and priorities I’ve

described,” Weiss explained, “we have built a great brand

that connects with those whom we call the ‘conscious

authentic.’ As the name suggests, they’re concerned with

their health, the environment and their communities.

These conscious authentics live active, socially engaged

lives, and they embrace products that enable and reinforce

their priorities and values. Every Bai flavor honors a

different coffee-growing region of the world, and this

connection to places remote and exotic enables some story

building that enhances the Bai experience for consumers.

Every Bai takes them on a little flight of fantasy. Just an

aside, the word bai actually means ‘pure’ in Mandarin.”

And Bai has taken flight in the marketplace as well. After

signing a distribution deal with Dr Pepper Snapple in 2014,

Bai has gone national in its distribution while unleashing

its first major marketing campaign in an effort to drive

awareness. “For all of our success,” Weiss noted, “as of

May 2015, we had only 7% unaided brand awareness,

which we like to see as a huge opportunity.”

To bring their expansionary ambitions to life, Weiss and

his team took time to gather their fact base and build the

necessary, supporting infrastructure before hitting the

accelerator. But once ready, Bai unleashed a national ad

campaign and celebrated Super Bowl ad, fueling another

wave of explosive growth. It has been a remarkable

transformation since Weiss and his dad embarked on

their first delivery run and handed out the early samples in

neighborhood New Jersey stores. Breakthrough comes in

many forms, and none more inspiring than the amazing

ascent of Bai. n



BREYERS® GELATO INDULGENCES™

E X PA N D A C AT E G O R Y, R E-E N E R G I Z E A B R A N D, I G N I T E G R O W T H = A S W E E T B R E A K T H R O U G H W I N

“IN THE MANY CONSUMER INTERVIEWS WE

conducted, every single woman shared a rich end-of-the-

day story,” recalled Laraine Miller, the brand development

director for Breyers. “We were primarily looking at a very

specific moment in which there’s a married mom, kids

have been put to bed after an active day, and then there’s

this moment to unwind, connect with her spouse and enjoy

a little reward. How can we make that moment special for

her? What sort of experience is she trying to create? These

were the motivating questions that led, ultimately to the

creation of Breyers Gelato.”

A thinking process such as this holds a useful lesson

because it illustrates a simple, shared feature of many

Breakthrough Winners: They start with a question rather

than a statement. Questions open minds to discoveries,

seek surprises, embrace unknowns and loosen the grip on

certainty. Questions are rooted in a basic humility of not

knowing, and it is by actively not knowing yet seeking to

know that many innovators end up finding the insights that


lead to Breakthrough successes.

Of course, posing questions is just the

beginning. “The path was not a simple

or easy one,” Miller continued. “Breyers

was suffering along with the rest of

the mainstream ice-cream industry.

The superpremium segment was the

only growth tier, and even there, many

brands had attempted, and failed, to

gain traction.”

“Despite challenges, there were a couple

of forces aligned behind us in the

revitalization of the full Breyers brand,”

explained Nick Soukas, brand-building

director for Unilever Ice Cream. “In our

favor was a trend toward simple, real

ingredients, which aligned well with

core Breyers equity, and there was this

exciting growth in the superpremium

tier of the marketplace. But as Laraine

noted, premium ice cream was not

growing, and Breyers had never broken

into the superpremium tier.”

“We had a clear business challenge—to

revive profitable growth—and we had

an idea about connecting with this

special end-of-the-day moment, but

there’s a big difference between an

idea and an insight,” Miller continued.

“Our explorations drew on our success in Europe with

the Carte d’Or brand and focused on a defined consumer

and circumstance, so we formed some initial hypotheses

around how we might create a product that would be

different from the plethora of ice creams and relevant to

this special moment. That’s where the insight work really

began.”

“Our target married moms were active, accomplished

and confident. They were happy in their lives, and despite

all they did for kids and community, they still prized their

sense of ‘me.’ They didn’t want to be defined simply as

a mom or a wife. You’d notice that these women were

constantly adding little extras to their lives—whether in

their wardrobe, social activities or home life. They found

ways of making things their own—adding personal accents

to places and moments of daily life. And each night, after

they put the kids to bed, they had an almost sacred time

to unwind and connect with their husband or friend or

partner.

“This moment was not about ice cream at all; it was about

relaxing and unwinding and rewarding. And these women

were quite certain that they had earned these rewards; they

expressed no doubts, guilt or ambiguity in their determined

desires!

“Importantly, we took a very broad view of what the

‘category’ was, because for her, it clearly included a glass

715799-1UnileverUBYIBRP-52296Breyers GelatoSpoon art

100% 8.5” x 11.25”

7.875” x 10.5” 7” x 9.875”

J. Tucker

J. DiSalvo

J. DiSalvo

Ken Stec

2-11-2016 1:46 PM

2-11-2016 2:49 PM

2-11-2016 1:46 PM

2-11-2016 2:49 PM

None

715799-1_BGI_PBC_2spns_3_HR.tif (763 ppi), 32341_uby_FrontTub_Choco-lateFudgeTruffl e_1_fl at.psd (1901 ppi), 32341_uby_FrontTub_RaspChee_2_fl at.psd (1901 ppi), NON_NEW_BR_GI VanCar_front_NEW_v2_cmyk.psd (1852 ppi), 32341_uby_FrontTub_SaltedCaramelTruffl e_1_fl at.psd (1901 ppi), BR_GelatoIndulgences_logo-NOb_4c 2.ai, Unilever_Logo_WHITE.eps

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A delicious trio of textures. Creamy gelato, luscious sauces and gourmet toppings.

IT’S WAY BEYOND ICE CREAM.

YOUR GELATO MOMENT HAS ARRIVED

© 2016 Unilever

CHOCOLATE FUDGE TRUFFLE

RASPBERRY CHEESECAKEVANILLA CARAMEL SALTED CARAMEL TRUFFLE

S:7”

S:9.875”

T:7.875”

T:10.5”

B:8.5”

B:11.25”

SPOTLIGHT #3 | BREYERS® GELATO INDULGENCES™



of wine or some chocolate or just putting her feet up and

watching some can’t-miss TV. So if we were going to do

something successful, it had to be relevant to this moment

and the desired experience, not simply differentiated from

other ice creams. So, while ice cream was not the frame

of reference, the contextual importance of indulging and

connecting and relaxing fueled our confidence that we

could do something special that could enhance the desired

experiences.”

“Gelato sales were small from a category standpoint,”

Miller continued, “but they were growing. Also, in our

consumer work, we found that the idea of gelato triggered

associations that were exotic yet approachable, adult but

seriously delicious—which fit well with the end-of-day

story that we were looking to enhance. We also found that

the word gelato triggered images and internal narratives

among our consumer group. Gelato activates associations

with gourmet meals and memories of traveling abroad. It

has an accessibly elegant air to it. Gelato is a very effective

trigger that worked for us both as a product and an

emotive activator.

“By contrast, and especially in the U.S., ice cream has

very much of a ‘family and kids’ set of associations. One

of the critical discoveries of our consumer work was this

revelation of how gelato works very differently in the minds

of consumers—much more adult, exotic and indulgent

than ice cream. These findings helped us realize that

gelato wasn’t just an extension of ice cream but actually

addressed a very different set of consumer circumstances

and desires.”

“We used our validated insights to develop and optimize

a concept that tested well, and this energized our

product developers to create a world-class gelato that

was relevantly differentiated. Fortunately, we had a

tremendous cross-functional team that worked incredibly

hard on the development challenge,” Miller underscored.

He went on to list three essential discoveries that the

team made during early prototyping, which, he said,

“sharpened our brief.”

“Our target consumers wanted decadent, indulgent flavors

but also familiar ones. Additionally, the ideal product

delivered across multiple benefits in addition to great

taste: rich, creamy texture; luscious sauce; and a gourmet

topping. Finally, the visual matters. When consumers

could see the product, they had a very strong, positive

reaction.”

“Each of these elements of the brief provided critical

focus and also challenges,” Miller noted. “On the product

formulation side, we had to identify, evaluate and secure

an array of new suppliers and then figure out how to

produce a sophisticated, premium experience at scale. To

deliver on the three product benefits was no small feat and

required investment in new technology to stream the sauce

all the way through the gelato rather than deposit as a layer

on top. The toppings provided another challenge: to find

a way to incorporate what was visually striking as well as

deeply satisfying to eat. Finally, we packaged the product in

a transparent container—which we had done successfully

with Carte d’Or in Europe but was new for us in the U.S.—

and this made the product really pop at shelf.

“Not only did our procurement, food scientists and

engineers collaborate to do an amazing job, but we found

a vital champion in CFO Henry Schirmer. We presented

the business case for the investment, and Henry not only

endorsed the financial merits, but he completely believed

that if we fulfilled the promise of the initiative, we could

reenergize the parent Breyers brand and bring excitement

to the category.”

Quick editorial aside: CFOs have a most undeserved

bad rap when it comes to innovation. In our five years

of Breakthrough research, we have seen many senior

IN TAKING THIS PRODUCT TO MARKET, WE BROKE EVERY CATEGORY CONVENTION IN THE PRICING

AND PROMOTION BOOK.


finance leaders play instrumental roles in supporting bold

investments in growth.

“Finally, in taking this product to market, we broke

every category convention in the pricing and promotion

book,” Soukas reflected. “Ice cream is a highly promoted

category, but we knew that our focus on quality, indulgent

ingredients and the product appearance would command

a considerably higher price than premium ice creams and

also avoid the rampant cycle of promotion.”

“The story we took to our retail partners was not an easy

one to sell, but we made the case with four core elements,”

said Soukas, detailing each one:

• “A data-rich map showing that gelato penetration

was concentrated in coastal, urban pockets, revealing

broad opportunities for geographical expansion.”

• “The core insight around the end-of-day experience—

and that this was a pervasive experience, not just one

that existed in more cosmopolitan zip codes.”

• “A category development business case: Most stores

had only a few, unfamiliar, expensive brands of gelato

on offer. We were able to show retailers our research

that while many consumers experienced this desire

for an emotionally satisfying, indulgent end-of-day

experience, part of what they wanted was comfort

and familiarity, and they rejected unfamiliar brands

and excessively exotic flavors in these circumstances.

Hence the case for Breyers.”

• “We always brought the product with us. The

strategy of “democratizing gelato” was engaging,

and the business case for category development was

compelling, but the product sealed the deal. The

dramatic visual—with the clear container—and the

spectacular taste convinced our partners that we could

deliver on our transformational ambitions.”

“Retailers also embraced our pricing strategy,” Soukas

continued. “Superpremium gelatos were selling at about

a 2.5 times price premium over the premium tier of ice

creams, and this gap was only expanding. Our goal was to

pull non–gelato consumers into the category, not suggest

that superpremium gelato buyers trade down. Our price

tests showed an optimized business case at a 1.7 times

index to ice cream, so this is what we went with, and the

in-market results validated our strategy, as we dramatically

grew the gelato category and the total superpremium

segment.”

“A critical aspect of our category development strategy

involved asking the retailers to give us a full, incremental

shelf of space,” Soukas explained. “We wanted to

command shoppers’ eyes with facings of all four launch

SKUs. Also, we wanted to shelve with other gelatos, not

with the Breyers parent brand. This was important to signal

to consumers that this was truly new, not just a variation

on a familiar theme.”

“So with our product set and retailers onboard, we geared

up for a big launch campaign that would connect this

very novel product to this very specific circumstance in

a way that reached, engaged and motivated our target

consumer,” Miller recounted. “We partnered closely with

our agency, DDB, both on some terrific TV and also online

video. Our launch TV creative we called ‘The Interruption,’

and it really brought the insight to life in a powerful,

effective, funny way. Kids were in bed, and parents were

settling into a very relaxing, shared moment—enjoying

a delicious scoop of gelato. And then in comes their

pajama-clad son, asking, ‘Hey, is that ice cream?’ ‘No,’

Mom responds, not quite licking away a smile, ‘it’s gelato.’

The playful ad underscores that this is not kiddie ice

cream. It is indulgent, sophisticated-yet-accessible adult

deliciousness.

“Online, we used targeted Facebook videos that generated

a tremendous amount of sharing, conversation, awareness

and interest. The video showed a couple dancing and

celebrating at home—again in a way that many of our

target consumers connected with. The story line resonated

precisely with what we’d heard from women in our initial

qualitative research, and it really clicked. There were posts

like ‘Were you filming me?!’ and ‘Got my plan for tonight!’”

Results? Sweet. Year-one sales were $62 million, and

sustained media support and an additional four SKUs

propelled year-two sales growth of 30%. Better yet, many

of the buyers were new to the brand, and all of them



were paying premium prices for a brand that had historically been tethered

to mainstream pricing. “Our strategy really played out,” Soukas summarized.

“When we first started speaking with retailers about gelato, it was a growing

niche category of maybe $150 million. Now it is nearly three times as large and

growing strong.”

“I think there are two important lessons our organization has taken from this

success,” concluded Soukas:

• “Focus on a category-expanding strategy, rather than a share-shifting

approach. The road might be tougher, but the rewards are much greater. We

are into our third year and have yet to be challenged by another mainstream

brand. That tells you something about how you create enduring competitive

advantage.”

• “Simply put, it is possible to transform well-established, mature categories

like ice cream.”

“It is too easy and too common to think that neither of these are possible—that

it’s all a battle for share of an existing market or that a category is ‘too mature’

for transformation,” said Soukas. “If you believe these things, uninspiring

innovation follows.”

But thinking differently is what leads to Breakthrough success.

Gelato Indulgences’ success accompanied renewed support for the base Breyers

brand, resulting in 7% core brand growth—3X the rest of the category. In 2015,

the Breyers Gelato Indulgences team won a Renaissance Effie in recognition

of a new-product launch that revitalized a mature brand. All in all, it was a

remarkable achievement, proving yet again that when conventional wisdom

suggests a category is “closed to growth,” innovators can find opportunity,

profit, category expansion and enduring competitive advantage. It’s amazing

what can happen when you expand the world of possibilities by asking a simple

question. n

FOCUS ON A CATEGORY-EXPANDING STRATEGY, RATHER THAN A SHARE-SHIFTING APPROACH. THE ROAD MIGHT BE TOUGHER, BUT THE REWARDS ARE MUCH GREATER.




BUTTERFINGER® PEANUT BUTTER CUPSN O B O DY L AY A F I N G E R O N T H I S S W E E T B R E A K T H R O U G H !

IN 2011, NESTLÉ USA’S BUTTERFINGER BASE BUSINESS

was growing at 10%, the classic “Nobody’s gonna lay

a finger on my Butterfinger” tagline was back, and

Butterfinger’s marketing team was pushing the frontier

of digital marketing. “The base business was healthy,”

recalled Jeremy Vandervoet, the marketing director, strategy

and innovation for Confections & Snacks. “But there wasn’t

any innovation.”

“At the time, we were doing research to understand what

fuels the Butterfinger brand,” added Natasha Madan,

marketing director, Confections & Snacks. “A key finding

was that Butterfinger was beloved yet polarizing. Its

distinct taste and texture weren’t for everyone or all

occasions, and we challenged ourselves to leverage the

love to fuel innovation.”

“We knew that we needed to focus on innovation and do

it right,” Vandervoet continued, “so the first thing that we

did was step back and look at past insight work. When we

dusted off nearly a decade of past consumer research, we

uncovered an important clue to the opportunity. We found

a concept for Butterfinger Cups from 2004 that consumers

had loved.”

“There was clearly an opportunity here,” Vandervoet noted.

“In addition to the prior concept testing phenomenally

well, several other factors stood out:

• “Reese’s was the only peanut butter cup business in

town; there was no challenger brand. While we had no

interest in doing a me-too product, it was striking that

Reese’s owned the format outright. This was striking

because there are always multiple brands in formats,

and this is well over a billion-dollar brand.”

• “On Pinterest we found hundreds of recipes with

Butterfinger. I remember being struck by that and

thinking, ‘This brand has a lot of legs beyond the bar


format.’ Looking back, we were very biased internally,

thinking that Butterfinger is a candy bar alone.

Consumers clearly saw it as an ingredient.”

• “And finally, across the market, the Butterfinger brand

and peanut butter cups generated enthusiasm and

consumption.”

Carlos Velasco, the current president of Nestlé Confections

& Snacks, reflected on the keys to innovation success.

“In order for innovation to be bigger, bolder and better,

you have to have robust consumer insights. One of the

things that stand out with Butterfinger Cups is the clarity

that the team uncovered around the desired experiences

that consumers were seeking—in other words, a clear,

actionable consumer insight.”

“At the time, however,” related Bianca Suchter, then

marketing associate on Butterfinger and currently

marketing manager on Stouffers, “we were already down

the road developing and testing a double-decker bar for

Butterfinger. We tried manufacturing the bar twice, and we

failed twice. At that point, realizing that this wasn’t working

as a double-decker bar, we had to make the hard decision

to step away and look for something else.”

While Vandervoet and Suchter dove into the Butterfinger

Cups opportunity, the “minis” format was taking off within

the confection industry, and Nestlé capitalized on this. With

the launch of Butterfinger Bites, there was no doubt that

Butterfinger was meant to be expanded. Madan noted, “We

launched Butterfinger Bites and saw it just take off,” growing

from an initial $5 million in sales to $30 million today.

With Butterfinger Bites on its way to success, Vandervoet

and Suchter began their research on Butterfinger Cups.

“Initially, we were not all convinced that we should call it

cups,” Vandervoet noted. “Snickers Peanut Butter Squared

was just launching, and we were unsure about aligning

our product with Reese’s, a billion-dollar brand already the

leader in market. So we decided to test it with consumers

in our Nielsen research as ‘Butterfinger Crave,’ but

consumers didn’t know what ‘crave’ meant, and the testing

struggled.”

“Looking back, this is a situation where we should have

kept it simple,” Vandervoet reflected. But hindsight is

20/20, and it wasn’t until Vandervoet spent time away from

the project at leadership training when he had clarity. “We

had to get up in front of the class and discuss our biggest

brand challenge,” Vandervoet continued. “And mine was

this: We were sitting on a failed concept, Butterfinger

Crave, and we didn’t know what to do. I distinctly

remember presenting it, and I kept describing it like a

Reese’s Peanut Butter Cup or Snickers Squared. There was

almost a ‘duh’ comment—‘Why don’t you just call it a cup?

It looks like a cup, it sounds like a cup’—it was my big aha

moment. Were we overthinking this?”

“But then calling it ‘cups’ brought up all of the politics and

other questions. Could we go up against the number one?”

Vandervoet explained. “Initially, there was a lot of pushback

across the board. Even in my own mind, I wasn’t sure. But

the more that I spoke with people outside of Nestlé and

the project, the clearer it became.”

Suchter and Vandervoet engaged their advertising

team, simplified the message and got to work with the

tremendous group of food scientists at Nestlé, including

Andy Zamorski, who Suchter calls “the father of the

Butterfinger Peanut Butter Cup.” Suchter reflected, “We

must have had 100 different recipes. We tested every level

of inclusion; we tested every type of chocolate, just to get

to this final profile.”

“That process and that level of detail [were] the key to

success,” said Vandervoet, referencing the tremendous

number of forms, flavors and iterations tested to get to the

product available today. “So much strategy falls through the

cracks in terms of execution, and it is really had to nail this

design element, to know which levers to pull and what to do.”

‘WHY DON’T YOU JUST CALL IT A CUP? IT LOOKS LIKE A CUP, IT SOUNDS LIKE A CUP’—IT WAS MY BIG AHA MOMENT. WERE WE OVERTHINKING THIS?

SPOTLIGHT #4 | BUTTERFINGER® PEANUT BUTTER CUPS


“There had never been more research or thought put into a

launch; from start to launch, we spent three years. Did we

do too much? You could make the argument that we did,”

Suchter laughed. “But we built a sustainable three-year

support plan and crafted packaging and product design,

with everything consumer tested and clearly thought out.”

Now, as we’ve seen time and again, to launch true

innovation, you need both the idea—tirelessly researched

and developed by the Butterfinger team—and the support

and shared vision from leadership. So Suchter and

Vandervoet asked their leadership team—Doreen Ida, vice

president of marketing during the launch; Robert Kilmer,

president of Confections & Snacks during the launch, and

Paul Grimwood, CEO of Nestlé USA—for three things

to make sure that Butterfinger Cups’ potential became a

reality.

Suchter recalled, “Looking back, we really credit our

leadership team to getting this right. It was mid-2012, and

we were supposed to launch in early 2013. We knew that we

were on to something but had not cracked the code.

“We could make it bigger, but we needed more time to get

the insight and product shape right. We had a phenomenal

product, but the communication wasn’t fully resonating

with consumers, and further, when looking at the product,

consumers were disappointed in the size. And, remember,

it wasn’t as simple as pushing a date out; Doreen and

the team were counting on the year-one volume for

Butterfinger Cups in 2013, but in a huge vote of confidence,

they allowed us to delay and moved mountains to find the

sales from other brands.

“To go right after the opportunity, we needed internal

support to call it Butterfinger Cups and not worry about

aligning our product with competitors like Reese’s or feel

like we were going to be called a copycat. Everything that

Butterfinger does is different, so we knew that it would be

original.”

“And, finally,” said Suchter, they needed “a huge financial

investment to launch the product correctly.”

Suchter continued, “Now that we had the product figured

out, Jeremy went to leadership to ask them to make a very

large financial investment in the launch. Part of this was

the Super Bowl ad. I remember when Jeremy just casually

one day said, ‘What if we went to the Super Bowl?’ We both

laughed—what a ridiculous idea! But then he would bring

it up again, and again and again. I think that Jeremy just

wore Doreen out with bringing it up so much, but then he

provided the strategy behind it and rationale as to what we

would do. So we tested out the plan with Nielsen.”

Velasco noted, “We have great brands, but historically we

do not participate in the Super Bowl, and we didn’t know

if we could capitalize. Our brands are strong but so well

established that we wondered whether we would get the

incremental sales to justify such an expensive 30 seconds.

But here we had a great product with great awareness—

before, during and after the Super Bowl—paired with

strong execution, we had a winning product.”

“After all of this,” Suchter continued, “I remember getting

the updated results from Nielsen assuming a launch

with the Super Bowl ad. They were nearly three times our

original estimate. When I saw the results, I screamed and

started running down the hallway. Doreen came out and

wondered what was going on.

“With all of this—the messaging, the phenomenal product

and the launch plan—we saw that this could be larger

than anything we had ever done with Butterfinger and

more sustainable—a big win for a brand with a history of

in-and-out innovation. Doreen was sold, too, and helped us

gain buy-in from everyone else. And that was it. We got the

money, and we launched!”

Butterfinger Peanut Butter Cups is a case that illuminates

how doing right by the research and the consumer

unequivocally pays off. In this case, it grew a strong idea

to one with more than 350% greater sales than initially

projected. Nestlé was also right that there was room in

the peanut butter cup category for Butterfinger; both

Butterfinger and Reese’s grew at the same time.

We’re excited to see where else “a dose of Butterfinger”

pops up in the future, but its debut was clearly Super

Bowl worthy, and there’s nothing polarizing about a

Breakthrough win! n

SPOTLIGHT #4 | BUTTERFINGER® PEANUT BUTTER CUPS



CHOBANI FLIP™“C R AV E T H E G O O D ”: R E D E F I N I N G T H E YO G U R T E AT I N G

E X P E R I E N C E—A N D T H E C AT E G O R Y

“WE SEE CHOBANI AS MORE THAN A YOGURT

company. We’re a natural-food company, on a mission

to make better food for more people,” said Chobani’s

chief marketing and brand officer Peter McGuinness.

“Our mission is central to Chobani, and we believe it’s

the future of food. We’re driven by a very strict food

philosophy that we call our DNNA: delicious, nutritious,

natural and affordable. If you look around the supermarket,

you’ll find plenty of products with two or three of these

characteristics, but very few nail all four. That’s always been

the specialness of this brand and the food we make.”

“We’re still very much an entrepreneurial company—and

that’s a word that gets thrown around a lot and is almost

said in an aspirational way. For us, it’s real, and it’s

important. Hamdi, our CEO and founder, is the central

component to product and business decisions. He gives

the company a distinct personality and reinforces a

meaningful, authentic brand that resonates with customers

and consumers.”

“Historically in the U.S., yogurt has been a breakfast snack

and something Americans often feel they should have but


rarely crave. We want to change these perceptions and

redefine the role that yogurt, and specifically Chobani, plays

in consumers’ lives,” explained Senior Brand Director Scott

Bacco. “When it comes to new products like Chobani Flip,

we take our inspiration from the broader world of culinary

trends.”

“We always look to more developed yogurt markets, such

as Canada and Europe, where yogurt is used in more

diverse ways and across a broader range of dayparts.”

McGuinness added. “Through this lens, we saw a growing

presence of add-ins that were addressing consumer desires

for varied textures and taste experiences, as well as making

yogurt eating a more meal-like experience. Hamdi knew

this trend was coming to the U.S., and he wanted Chobani

to be the first and to do it right.”

“The way we practice R&D [research and development] is

completely different from other food companies,” explained

Kai Sacher, vice president of global R&D. “I have been

in the industry for decades with a number of companies

and across a range of countries, and the difference with

Chobani is that we are focused on creating amazing food.

We have a culinary—not a yogurt—orientation. That

translates into having an executive chef on our team and

working with a diverse array of ingredients and immersing

ourselves in the food service world for inspiration and

ideas. We also look at rituals and traditions and draw

inspiration for how we can incorporate them into the food

we make. We keep a close eye on restaurant and food

service trends in ‘high-food-IQ markets,’ looking for new

approaches to recipes and dining experiences that might

inspire us or signal an opportunity for innovation that we

wouldn’t have otherwise identified. For example, the trend

toward deconstructed desserts popping up on menus in

many popular restaurants influenced the development of

our Flip Key Lime Crumble. Nostalgic snacks and treats

such as pies and chocolate candies translated into our

PB&J, Chocolate Haze Craze, Pumpkin Harvest Crisp, and

Peppermint Perfection Flip varieties. Growth of bolder,

ethnic flavors inspired our Sriracha Mango and Chipotle

Pineapple spicy Flips. These flavor combinations excite our

consumers and help take Chobani outside of breakfast in a

very natural way.”

“We also have our Chobani SoHo Café in New York City

that functions as a real-world laboratory for us. We can

constantly try new creations, interact with people and

get real-time feedback. This translates into the products

that we create and ultimately the experiences that our

consumers enjoy,” McGuinness illustrated. “Flip is a great

example. Is it the first yogurt with ‘sidecar’ mix-ins? No.

They’ve been important in Europe for years, and there are

a couple versions here in the U.S., but it’s generally yogurt

and a scoop of cereal. And that’s the eating experience as

well: yogurt and some cereal. Compare that with Flip: a

totally unique food form and eating experience. Almond

Coco Loco is a low-fat coconut Greek yogurt with dark

chocolate and honey-roasted almonds. It provides an

elevated, highly curated eating experience that is nothing

like anything else in the category. Generally, Americans

don’t crave yogurt, but we’re changing that with Flip.

Consumers crave these tastes and textures.”

“At our Twin Falls, Idaho, R&D facility, we have a

‘Flip room,’ which is just walls of ingredients, and we

experiment constantly. We really focus on making great

food. We have a 25-person team representing eight

different countries of origin, so we bring diverse palates,

cultures and traditions into our work, which is a powerful

source of inspiration.” Sacher continued, “It’s worth noting

that R&D reports to Hamdi and not up through marketing.

COST COMES IN VERY LATE IN OUR PROCESS. WE DON’T EDIT OURSELVES AT THE BEGINNING, SAYING, ‘WE’D BETTER NOT USE THAT DARK CHOCOLATE BECAUSE IT’S EXPENSIVE.

SPOTLIGHT #5 | CHOBANI FLIP™


Hamdi really pushes us to make spectacular food, and

when we have it, he says, ‘And now we have to make this

affordable.’ But cost comes in very late in our process. We

don’t edit ourselves at the beginning, saying, ‘We’d better

not use that dark chocolate because it’s expensive,’ or,

‘Let’s use a crunch rather than a nut to cut costs.’ We just

don’t think or operate that way.”

“Kai and his team developed some amazing products

with Chobani Flip, but we definitely had some challenges.

As Kai alluded, the magic is creating amazing foods that

also deliver great nutrition at an affordable price. We are

cross-functionally integrated, aligned in our values and

priorities, and incredibly agile even as we have grown to a

billion-dollar company. These qualities are core to Chobani

and obviously instrumental in the success of the Flip line,”

Bacco summarized.

“What’s particularly exciting about Flip isn’t just that we’re

succeeding, but how we’re succeeding,” said McGuinness.

“Flip is bringing new consumers to the Greek yogurt

category: 46% incremental purchasers. Flip is encouraging

folks who perhaps rejected Greek yogurt initially to try the

category, and once they do, we’re actually seeing very high,

50%, repeat rates and buy rates are increasing over time.

In other words, people try it and like it and then discover

additional circumstances in which they’d like to have one,

and so they’re purchasing more units on subsequent

shopping trips. Additionally, we are still growing at better

than 100% with very little cannibalization of our core line

of Chobani Greek yogurt products; this is an additional

purchase or a new consumer. All of this is obviously terrific

for Chobani as well as our retail customers.”

“After our initial launch of Chobani’s original cup in 2007,

it’s been important for us to prove that Chobani is not a

one-trick pony,” McGuinness declared, “and generating

our second Breakthrough Winner is a huge affirmation of

what we’ve built. We never want to lose our entrepreneurial

spark and agility, and we want to compete and win against

much larger competitors. We’ll do that by continuing to

redefine the marketplace and innovating in ways that

address what consumers want—and we’ve got a strong

pipeline of big initiatives in coming years.”

“We redefined the yogurt industry over the past nine years,

and we just recently launched our new line of Chobani

Meze dips that deliver an unbelievable food experience

with 80 percent less fat and 65 percent fewer calories than

the leading hummus,” McGuinness noted. “Chobani is a

company that will continuously seek to reimagine—and

then redefine—the culinary landscape in order to create

delicious, nutritious, natural and affordable foods that

consumers love. There is tremendous change in the

industry right now, and we see a world of opportunity.” n

SPOTLIGHT #5 | CHOBANI FLIP™



DOLE® CHOPPED SALAD KITS

T R A N S F O R M I N G B A G G E D S A L A D I N TO A “C R AV E A B L E ” E X P E R I E N C E

“CHOPPED SALADS HAVE BEEN AROUND SINCE THE

1930s without receiving much attention from consumers

or inspiration from chefs,” said Dole’s vice president of

marketing, CarrieAnn Arias. “Something changed, though,

in the early 2000s in the world of restaurant chopped

salads. Recipes evolved, ingredient variety soared, menu

offerings increased and new dressings proliferated.

“Not only were popular mainstream restaurants such as

California Pizza Kitchen and Cheesecake Factory putting

more creativity into their salads, but consumers were

gushing about the experiences. One of the things that

struck us in our conversations with consumers was how

much they loved chopped salads.”

“These people weren’t eating salads because they were on

a diet or because they felt they had to,” Arias continued.

“Salads were the star of the mealtime show for many

consumers, and this was a valuable discovery for us.

“Fueling this trend, at least in part, was the creativity

and innovation that restaurants were bringing to their

salad offerings. You could see why consumers ordered

these at restaurants and how hard these recipes would

be to recreate at home: shopping for a long list of

fresh ingredients and then a considerable amount of

washing, peeling, chopping and cleanup. If you wanted a

phenomenal chopped salad without major planning and

prep production, there was ample incentive to go to a

restaurant.”


“The net result was a widening gap between the chopped

salads that consumers ordered and loved at restaurants

and comparable offerings that were available at retail to

prepare in their own homes,” Arias explained. “One of

our practices at Dole is to keep a pulse on food service

trends as a source of advance intelligence and inspiration

for the types of products and experiences that consumers

might want to create at home. The surge in chopped

salad demand and the gap between home and restaurant

offerings framed an opportunity for our innovation team.”

“So we had this working hypothesis,” Arias reflected, “that

a restaurant-quality chopped salad experience available

at home held promise, but we needed more detail. What

exactly were the defining elements of the ideal consumer

experience? We dug in, literally. We ate hundreds of

salads at any number of restaurants. We probably went to

California Pizza Kitchen—which was a chain very much on

the vanguard of the movement 10 years ago—20 times or

more. And we spoke with dozens and dozens of chopped

salad aficionados.”

“You know,” Arias continued, “I don’t know if we realized

at the time how valuable this immersion work was, but

in retrospect, it was absolutely indispensable, and I think

it’s one of the huge lessons from this launch. If we had

skipped this messy, unstructured, costly, time-consuming,

uncertain work, we would have missed seemingly small yet

essential details.

“For one, we learned how truly craveable a great chopped

salad could be, and it gave us a very high standard for our

product development work. If we were going to offer the

promise of a restaurant-quality experience at home, it had

to be ‘craveable,’ not just good.

“Second was to focus on the consumer experience, not

the ingredient combinations, as the essential unit of

our innovation effort. Again, a seemingly small shift in

perspective, but one that created a much more expansive

view of the consumer’s end-to-end experience: capturing

the way that the planning, shopping, prep, eating and

cleanup tasks all enter the flow of consumers’ lives. If you

strip away all the context and flow of daily life, you really

lose the critical context in which your—or any—product

lives.

“Third, in discovering the visceral enthusiasm that

consumers felt for their favorite restaurant salads, we made

a subtle, important pivot in our frame of reference. Instead

of coming at the opportunity from the perspective of the

produce section or bagged salads, we approached the

challenge as one of enabling a restaurant-quality experience

at home. This shift set us apart from competitors and fueled

our success. Remember, we were not the first with bagged

chopped salads in the grocery store, but the offerings that

preceded us were clearly derivative of the manufacturers’

bagged greens and vegetable legacy business.

“As a consequence, many early prototypes were rejected

as ‘not memorable.’ They were good, but they weren’t

‘craveable.’ We were experimenting with 50 to 60 different

ingredients and an even greater variety of dressings, so

you can imagine how complex this product development

process was.”

“There was clearly a precise target to aim for: a salad

experience that was indulgent (and consumers actually used

that word to describe their salads) but not unhealthy. There

has been plenty of media coverage,” Arias cautioned, “about

salads with more fat and calories than fast-food burgers, and

that is not where we ever wanted the Dole brand to live, and

that’s not what our consumers wanted either. So yes, it was a

‘craveable,’ indulgent salad, but it was healthy and made you

feel good emotionally as well as physically.

“Once we settled on our final ingredient formulations, it’s

one thing to produce something in a test kitchen, but it’s

another challenge entirely to do it at scale. This where all

the devilish details that consumers only notice if you get

them wrong start cropping up like weeds. For example, one

of the signature elements of a chopped salad is that every

bite offers complexity and balance in tastes, textures and

crunch. Interesting aside: Paul Newman, who played a role

in reviving the chopped salad in his iconic Westport, Conn.,

Dressing Room restaurant, pronounced that a proper

chopped salad should be consumable with a spoon. You

shouldn’t have to wrestle with a knife and fork, and you

could never get perfect bites that way. A central idea of the

chopped salad is that every bite is perfect.

“Well, all of this presents sourcing and supply chain

challenges. There are then increased production costs

SPOTLIGHT #6 | DOLE® CHOPPED SALAD KITS


associated with the finer dice. And when all the ingredients

are smaller piece sizes, they aggregate more densely in

a bag, so the standard pillow bag really didn’t look good,

and the visual is a huge part of the salad purchasing and

eating experience. It turned out that a narrower bag worked

to keep the ingredients better distributed vertically, making

for a much better at-shelf visual. But these are the details

that can either make you crazy but you get them right, or

they make you crazy and you cut corners, and that leads to

failure in the marketplace. We knew we had to deliver fully

and perfectly on the experience.

“One other challenge is that there are ingredients, such

as a fresh diced tomato, that

you simply cannot do in a

bagged salad. And yet that’s

the experience that consumers

want. Well, it turns out that

with creative dressing work,

you can create the experience

in a different way. This is

another example of focusing

on a restaurant-quality profile,

to deliver a one-of-a-kind

consumer experience.”

“Ultimately, we developed a set

of outstanding products that

we could cost-effectively source

and assemble that were ready to

go to market,” Arias described. “Now,

it’s essential to note that we began the retail

customer conversations more than a year before we had

products ready to ship. And we rolled out our chopped

salads in a way that was unprecedented for Dole.

“Historically, we have done national, blanket launches, but

in this case, we went customer by customer at the store

level, providing customized campaigns developed jointly

with each customer. First, we shared our research with them

and showed them the nature and size of the opportunity. We

also shared our business case analyses, which showed that

we could price at a considerable premium to the existing,

widespread Caesar salad kits and bagged greens. Third, we

invested in their stores and social media outlets in addition

to the national campaigns. We leveraged our extensive field

sales organization to develop plans for individual stores that

were both grassroots and high tech.”

“For example,” continued Arias, “we did a huge amount

of targeted couponing using Catalina and other retailer

platforms so that we could convert trial into repeat and we

could identify lookalikes at the individual store level based

on loyalty card data and/or basket contents to generate

targeted offers. We also did co-branded advertisements

in the printed circulars and digital platforms of our retail

account partners. The point is that we jointly invested,

jointly created and jointly benefited in the Dole Chopped

Salads success.”

“This is another huge piece of learning

from this launch,” Arias concluded.

“There is enormous potential to be

much more targeted than in the past,

and there are also great opportunities

to partner with retailers who have

huge motivation to generate additional

traffic, sales and profit. When you bring

them a great story, business case and

product, as well as a willingness

to partner and co-create,

we learned that our key

accounts can be invaluable

collaborators in creating

breakthrough success.

“We have now created a runaway success that is

transforming the produce section—selling over $100 million

in its second year and growing strong at more than 115% in

the past year. One of our biggest challenges is to keep up

with growth, not run out of kale (no joke!), and continue to

innovate to address consumers’ increasing demand for more

and different ‘craveable’ salads. We will continue to stay

close with our consumers, who are extremely active on social

media, collaborate with our retail partners, and monitor

evolving trends in the restaurant scene.”

The satisfaction of a perfect salad, like the taste of a

breakthrough win, has a way of fueling the hunger for

more. That’s where the Dole innovation team is setting

their sights: on the lookout for a healthy shot at the next

transformation. n

SPOTLIGHT #6 | DOLE® CHOPPED SALAD KITS



MILK-BONE® BRUSHING CHEWS®

C AT E G O R Y C R E AT I O N P O W E R S B R E A K T H R O U G H I N N O VAT I O N

“IF OUR DOGS ARE PART OF THE FAMILY, HOW COME

we don’t take care of their teeth like we do for the rest of the

family?”

When I think back on our successes,” reflected Geoff

Tanner, senior vice president of growth and innovation

for the J.M. Smucker Company (which acquired Big Heart

Pet Brands in March 2015), “every one of them had this

very specific ‘epiphany moment’—and I can remember

them—when someone on the team framed a question in a

way that just made the room stop. It was this instant sense

of ‘That’s so obvious, but we’ve never quite framed it that

way.’

“In the case of Brushing Chews, we had worked to develop

a robust demand landscape that revealed the opportunity

around oral care generally, but it was this pivotal question

that really focused our efforts.”

“A great question reframes how you see the market and

the opportunity,” Tanner explained. “In this case, we

quickly realized that the $400 million that Americans were

spending on dog oral care represented only a fraction of

the potential market, if we could get pet parents to apply a

similar mind-set and a routine that they have for their own

oral care to their four-legged family members.”

“For the innovation team,” added Sarah Miller, director

of strategy and insights, “The consumer tension to solve

was very clear: ‘I love my dog, and to care for my dog’s

teeth, I’m supposed to brush them daily, but that’s just not

realistic.’ The questions we challenged ourselves with were


clear: How might we make brushing a treat? Can we make

a dental chew that’s as effective as brushing?”

R&D director Steve Bautista, noting that the Veterinary

Oral Health Council (VOHC) recommends daily brushing,

stated, “Fewer than 5% of owners brush their dog’s teeth

regularly, let alone daily. Consequently, over 80% of dogs

suffer from periodontal disease by the age of 3. It is the

No. 1 health-care issue for dogs. People love their pets

like never before, but few of them do anything about their

dogs’ need for brushing.”

“The facts posed a perplexing riddle,” added Nicole

Massey, director of pet snacks innovation. “Dogs need

oral care, and owners genuinely want to do what is best

for their dogs’ health. Yet few dog parents are addressing

oral-health needs proactively; instead, most are relying on

costly veterinary solutions after their dogs are suffering.

There were a few preventive products on the market, but

adoption was low, and there was latent demand for a great

product at an accessible price.”

“We confronted two big challenges,” Tanner reflected,

“one technical and the other a commercial-positioning

challenge. The technical challenge was to meet the claim

that whatever new product we developed would be as

effective as brushing. The positioning challenge was to

reframe dog oral care in a human context. If we could do

both of these things, we saw the chance to transform the

marketplace.”

“This was not going to be easy,” said Bautista. “For

starters, it turned out that while the VOHC recommended

daily brushing, there was no benchmark for what that

standard was. In other words, if we wanted to develop

a product that was ‘as effective as brushing,’ we had to

establish how effective brushing was first and do it with

clinical validity.”

“I need to underscore that what happened next would have

been impossible in our company five years ago. We simply

would never have taken on such a mammoth challenge,”

Tanner emphasized. “Five years ago, we set out to build

a world-class innovation capability. Milk-Bone Brushing

Chews demonstrated the power of that integrated, cross-

functional approach. Every function played a critical role to

shape the final proposition.”

Bautista explained, “In order to establish the baseline

efficacy of daily brushing, we fielded a clinical study where

we had clinicians brushing a very large number of dogs’

teeth daily for weeks, even though we had no idea if it

was even remotely possible to meet the standard with a

nonbrushing alternative that dogs and dog owners would

accept. These are the things that only happen when you

have a company with proven innovation ability, a culture

geared for transformation, and total C-suite support,”

Tanner added.

“Given that we needed the dogs to buy into this as well

as pet parents, we focused on the idea of a chew as the

WE QUICKLY REALIZED THAT THE $400 MILLION THAT AMERICANS WERE SPENDING ON DOG ORAL CARE REPRESENTED ONLY A FRACTION OF THE POTENTIAL MARKET, IF WE COULD GET PET PARENTS TO APPLY A SIMILAR MIND-SET AND A ROUTINE THAT THEY HAVE FOR THEIR OWN ORAL CARE TO THEIR FOUR-LEGGED FAMILY MEMBERS.

SPOTLIGHT #7 | MILK-BONE® BRUSHING CHEWS®


vehicle for the brushing-like experience,” Bautista continued. “Once we had

our target set in terms of daily brushing effectiveness, we set out to develop

a ‘brushing chew’—an idea that didn’t exist in the minds of dog parents. This

took several years and a deep understanding of dog ‘ergonomics’ to get right.”

“This time-consuming, difficult work is hugely important context,” Tanner

underscored, “particularly when you recognize that this was uncertain work: We

didn’t know what we’d discover or if we could ever develop a viable commercial

product. An essential lesson from Milk-Bone Brushing Chews’ experience is that

we failed many, many times before we ultimately succeeded.”

“Something we have learned from our Silicon Valley neighbors is to embrace

failure as not simply acceptable but essential. If you’re not failing, you’re not

learning, nor are you trying hard enough to create something thoroughly new

and transformational,” Tanner continued. “We did not have that culture five

years ago. It was extremely hard to develop and will always be challenging to

sustain.”

Miller elaborated, “In order to keep the momentum going month after month

and keep a team energized and motivated, you need to reframe failure as

progress. Innovation is a journey of discovery as much as of creation, and

before you find the way that works, you need to embrace the discovery of many,

many ways that do not work.”

Thanks to some incredible technical persistence and ingenuity—such

as building a 75-degree twist into the chew so it would move around the

dog’s mouth and mimic the effect of actually brushing the teeth—Massey

summarized, “we had a product that met the claim ‘as effective as brushing.’

We then faced the marketing challenge of framing a dog-oral-care concept in a

human context, so it was intuitive and compelling to dog owners that pet family

members deserved preventive oral care, just like the rest of the family.”

Critical to the success of Milk-Bone Brushing Chews was strong CEO and

board support. As Tanner noted, “From the very start, the proposition was a

top priority for the company, not just the innovation or brand teams, and the

necessary resources were committed across the company. Further, the executive

team stayed very close to the project and helped clear a path through the

inevitable obstacles and constraints.”

“Commercial success required far more than solving the technical problem,”

explained Covahne Michaels, who headed the marketing efforts. “We had to

create a category that basically did not exist in the minds of many dog parents

and to develop a brand and messaging that brought the core insight to life. We

wanted consumers to experience our brand the same way we experienced the

‘epiphany moment’: My dog needs this!”

INNOVATION IS A JOURNEY OF DISCOVERY AS MUCH AS OF CREATION, AND BEFORE YOU FIND THE WAY THAT WORKS, YOU NEED TO EMBRACE THE DISCOVERY OF MANY, MANY WAYS THAT DO NOT WORK.



“Some of the main things we focused on in this phase

were package, brand and messaging,” Michaels continued.

“We looked at the heuristics of the human oral-care

category—from color to packaging shapes to symbols to

understand the ‘language’ of human oral care. What we

learned through our research in this phase was important:

The pack should evoke a high-quality, human toothpaste

box.”

“This would be significantly more expensive than typical

pet packaging, and there were certainly pressures to

economize,” Michaels observed, “but this just illustrates

one of the many opportunities that always arise to cut

a corner when you can’t. False economies—save now,

pay much, much more later—doom many innovation

initiatives. In any event, what you can see today on the

shelf is a pack that looks nothing like anything else in

the pet aisle and more like an item from the neighboring

human-oral-care aisle.”

“As far as the brand,” Michaels noted, “we believed

that our strong Milk-Bone equities would resonate with

consumers, given its level of trust, quality and oral-

health orientation. Research validated this belief, and the

Brushing Chews launch leveraged these elements while

also extending and strengthening the Milk-Bone brand.”

“Our consumer work,” Michaels explained, “confirmed

our ingoing hypothesis that the right tone was to

emphasize the emotional connection between

dog and owner and not to make too much of the

technical aspect. The job of clinical efficacy could

be done at shelf and with the simple claim ‘as

effective as brushing.’

“In short, less was more on the technical

side when it came to advertising voice.

We led with a very effective TV

ad that just showed a guy, Ted,

with his dog, Rudy, in a simple

segment that underscored their

connection that laddered up

to the ultimate benefit of the

product. This was something

every dog parent related to, and

it worked to drive awareness,

interest and purchase.”

“On the retail side,” noted Todd Nettleton, who

at the time had been vice president of the market

development organization, “we’d been through these

category transformation conversations before, both

with Milo’s Kitchen (2013 Breakthrough Winner and

featured Spotlight), which created a category of dog

treats with human-quality ingredients, and with Meow

Mix Tender Centers (2014 Breakthrough Winner and

featured Spotlight), which resolved the historic trade-off

of wet versus dry cat food. With Milo’s, we had to send a

number of senior executives to key accounts and convince

customers that our company, with no innovation history,

could actually deliver a new-to-the-world brand and

dramatic category expansion. This time around, we still

had to make a compelling business case, but it was much

easier to get buyers to take the meeting.”

“None of this happened overnight,” added Nettleton.

“We sent full cross-functional teams to begin these

conversations with retailers two years before we actually

launched, because we knew this was an idea that would

take time to sell through. This was a totally new category

and concept, but we had the research and fact base to



make a convincing case for the incrementality of our

offering and to ensure we had the optimal retailer support

programs in place to launch the idea.”

“One of the biggest differences between this launch and

our prior launches—and this is as much a comment on

the state of technology as it is about our company—

was the precision and data-driven intelligence of

our commercialization strategy,” Michaels reflected.

“Marketing communications have historically involved a

fair degree of guesstimating and accepted uncertainty, and

while it’s hardly a perfect science, I marvel at how much

we knew versus how much we believed in terms of our

allocations and decision making.

“Having a unified data and analytics system enables us

to integrate addressable in-store couponing with targeted

digital advertising, for example. This was not possible a few

years ago—certainly not with the scale and seamlessness

that is possible today. We were not only able to target

certain consumers in-store, but we learned that buyers of

Milk-Bone Brushing Chews were generally heavy buyers of

human-oral-care products—an actionable insight for us

and our retail partners.”

“Looking back,” Tanner reflected, “five years ago we had

zero innovation capability and no successful track record.

As a smaller player in the industry, we knew we would

never be able to outspend the big guys, and we committed

to winning with innovation. Over this time frame, we have

built a robust innovation capability that has generated the

majority of our growth and three Breakthrough Winners. As

important, we have cultivated a culture from the top down

that embraces Demand Driven Innovation as a cornerstone

of who we are and how we operate.”

“I think there are two things that I see many organizations

get wrong or underestimate,” continued Tanner. “The first

is that an innovation system is synonymous with a stage

gate process or having a bunch of tools or analytics in

place. Strong and weak innovation performers alike all

have many of these same tools and analytics. If I look at

what changed the most at Big Heart Pet, the difference

maker was cultivating a culture—from the CEO down—

that embraced both the art and science of Innovation.

That culture translated into more rigor and precision

that dramatically reduced waste, on the one hand, while

also accepting the uncertainties and risks inherent to

innovation.”

The second mistake, Tanner said, is “believing that

innovation somehow gets easier over time. It does not.

You may have a great system, but innovation is never

automatic. It’s not something you can allow to run on

autopilot, because the forces of conformity will always work

to bend the ‘new’ to adjust to the ‘old.’

“We have to stay vigilant and stay hungry, because

innovation strength is fragile and under constant pressure

to do the easy thing or the quick thing. But ‘quick and easy’

isn’t how you win, and we aim to keep winning.” n




NASACORT®

ALLERGY 24HRP R O V I N G T H AT A “C R O W D E D C AT E G O R Y ” C A N S O M E T I M E S

O B S C U R E A H U G E O P P O R T U N I T Y

CONTRARY TO A COMMON ASSUMPTION, SWITCHES

from prescription to over-the-counter (Rx-to-OTC) are no

sure thing. There are far more failures than successes,

and the laws of Demand Driven Innovation still apply. At

the outset, the initial indicators for Nasacort indicated an

uphill struggle:

• Crowded OTC allergy-relief category across all price

points

• Low brand awareness for Nasacort

• Low number of prescriptions at the time of the switch

• Undesirable form (pervasive consumer dislike of nasal

sprays)

Nonetheless, mastering the challenges of Rx-to-OTC was

one of the main motivators behind Sanofi’s acquisition of

Chattem, so the team had expectations to fulfill.

This would not be the first time Chattem embarked on a

Breakthrough mission into a market crowded with large,

well-known brands. Allegra Allergy earned the honor in

2013 by resolving the symptom-relief trifecta of efficacy, fast


action and non–drowsiness, enabling many sufferers to “live in the moment”

with allergy relief within an hour, without the side effect of drowsiness.

While Nasacort also plays in the allergy category, it fulfills a different “job

spec”—one focused on the struggles of more-severe-allergy sufferers.

These people not only endure more debilitating symptoms but also tend to

experience them throughout the year, not just in typical “allergy seasons.”

“If we were going to succeed,” began Shermon McMillan, director of

marketing, “we would need a deep understanding of the struggles consumers

were facing with current options and what would motivate consumers to use

a nasal spray. Engaging with relevant consumers, we found that nasal-spray

users were overwhelmingly those suffering from moderate to severe allergies.

For them, antihistamines provided only inconsistent and incomplete relief.

It was these severe sufferers who needed more than what an antihistamine

provided. Both the science behind allergies and physicians supported nasal

allergy sprays as the most effective medicine one could get.”

“While allergies are almost always bothersome for any sufferer, they can be

debilitating for the moderate-to-severe sufferer,” McMillan elaborated. “We

found that consumers were going to great lengths to combat their symptoms:

ripping up carpets to rid pollen and allergens, vacuuming pets, avoiding

outdoors in the springtime and generally withdrawing from desired activities.

In short, severe allergy symptoms exact a significant quality-of-life toll from

their victims.”

“Our consumer research identified a clear gap in the market, as well as an

understanding of why this gap existed and what the solution would deliver in

terms of a user experience,” McMillan continued.

“This is where our knowledge of the science intersected with our understanding

of the consumer.”

• The science: “Antihistamines only address one of the chemical responses

that can cause allergy symptoms, while Nasacort addresses more.”

• The consumer insight: “These moderate-to-heavy symptom-sufferers are

extremely engaged with category. They research the underlying drivers of

symptoms as well as the efficacy of varying remedies. Generally speaking,

our target customers are information hungry.”

“In short,” said McMillan, “Nasacort ‘stops more of what makes you

miserable.’ This simple phrase constitutes a fact, an insight and our tagline

all in one simple set of words. Putting the pieces together produced this

aha moment among our team, when we all were like, ‘That’s it!’ The product

truly spoke for itself, and it became immediately clear to these consumers

SPOTLIGHT #8 | NASACORT® ALLERGY 24HR

OUR LAUNCH MESSAGING ACHIEVED THAT ‘YOU GET ME’ RESONANCE A WELL-CRAFTED BRAND MESSAGE CAN STIR WITHIN TARGET CONSUMERS.


why their antihistamines worked only some of the time

and that Nasacort could offer them an improved quality

of life.”

“The challenge,” McMillan explained, “was, given the low

equity and awareness of Nasacort, how to nail the message

and connect with consumers right from the start.

“We partnered with our Nielsen Innovation colleagues

to determine the best way to communicate. While most

positionings we came up with tested well, our winning

message relied on more science than we would normally

reference in a marketing campaign. We framed the

underlying science, delivered by Nasacort, as the enabler of

a better quality of life.”

“Sharing the science behind allergies gained credibility,

and showing how the science enabled desired life

experiences created the emotional connection with

severe-allergy-symptom sufferers.

Our launch messaging achieved that

‘you get me’ resonance a well-crafted

brand message can stir within target

consumers,” McMillan affirmed.

“Our tagline, ‘Stops more of what

makes you miserable,’ was brought

to life in our TV spots,” said Holly

Sisson, senior marketing manager.

“The creative featured a spokesperson

interacting with actual physical

renderings of the words identifying the

causes of allergies. Needless to say,

these are unfamiliar words, but the

effect was to humanize the science in

a way that made the how of Nasacort’s

effectiveness clear: Nasacort addresses

a much broader array of the chemical

responses that can cause allergy

symptoms than antihistamines. Our

positioning was ‘approachable science,’

and it worked. We saw some of our

best-ever testing scores for the ad,

which also helped establish equity for

the Nasacort brand.”

“Since awareness for Nasacort was nearly nonexistent,

we knew we needed more than just ads to educate and

drive awareness; in-store execution was fundamental

to success,” Sisson continued. “In addition to having

displays, we also created an in-store video. We partnered

with retailers to secure placement of video boxes next to

our product. Consumers could press play and watch a

60-second video on how Nasacort works, how it is different

and how it stops more of the chemical responses to

allergens that can make you feel bad. We also had a strong

partnership with pharmacists. Since Nasacort was the

first of its kind, we knew consumers would have questions

and rely on their pharmacists for answers. We equipped

the pharmacists with talking points and coupons, so they

could help consumers make their choice and choose

Nasacort.”

“Getting retailers on board was not an easy task,”

McMillan reflected. “They were wary of dedicating space to



an unknown brand and a ‘less-preferred’ product format. It helped that we were

coming off of the successful Allegra launch, but we still needed to work closely

with retailers to show them the strong potential of Nasacort. When presented

with supporting data and BASES forecast numbers, retailers bought in; we had

cleared another hurdle on the pathway to success.”

“To bolster awareness, Nasacort also had to pop at shelf,” McMillan noted,

“not an easy task for a new brand in a small, skinny box. This hadn’t been a

concern when Nasacort was available as a prescription but proved to be both

a marketing and engineering challenge when launching over-the-counter. We

had to strike the right balance between creating a package that had strong shelf

impact yet wasn’t wasteful and bulky. In finalizing the design, we worked very

closely with the engineers and the product supply team, who were responsible

for producing the product and packaging. The packaging changes combined

with the dramatically increased production volumes required strong teamwork,

communication and collaboration to surmount.

“First year out of the gate, our focus was on maximizing household penetration.

We ramped up distribution quickly, didn’t waste any time turning on media,

and offered incentives for consumers to buy Nasacort instead of or in addition

to what they were currently using. We knew the product was outstanding and

lived up to the claims we were making; once consumers tried Nasacort, we were

confident they’d be back. And our research and forecasts proved correct: very

strong trial and repeat rates in-market.”

“It’s important to underscore,” McMillan emphasized, “that the success of

Nasacort could not have been achieved without absolute commitment from

management. Leadership asked us the right questions and gave pushback

when necessary. Everyone had a can-do attitude. It was rare that we heard ‘no’;

instead, there was a spirit of ‘How can we make this happen?’ or ‘How can we

make this as big as it can be?’ We had to demonstrate to management that we

were on the right path, but we definitely had a supportive audience. This senior-

level engagement—not just permission, but active engagement—emboldened

us to go out with an advertising approach that was nontraditional for both the

industry and Chattem, resulting in an exceptionally strong launch.”

All the time and energy paid off with first-year sales of $136 million and growth

in year two. Despite competitive entrants, Nasacort continues to thrive—

reaffirming that “crowded categories” can be fertile innovation grounds when

the current options to fulfill the underlying consumer needs provide only

imperfect, inadequate and incomplete solutions. n


IT WAS RARE THAT WE HEARD ‘NO’; INSTEAD, THERE WAS A SPIRIT OF ‘HOW CAN WE MAKE THIS HAPPEN?’ OR ‘HOW CAN WE MAKE THIS AS BIG AS IT CAN BE?’



OSCAR MAYER P3S E R I O U S E N E R G Y F U E L I N G B R E A K T H R O U G H R E S U LT S

“P3 NEEDS TO BE EVALUATED FROM THREE ANGLES,”

began Joe Fragnito, who oversaw the development and

launch of P3 as vice president of marketing for Oscar

Mayer. “First, its success as a stand-alone innovation

initiative. Second, its capacity to be an extendable platform

for protein snacking. Third, its ability to strengthen the

relevance of the Oscar Mayer brand to young adults. The

reason this is such a great story at Kraft Heinz is that it

performed on all three of these ambitious objectives. The

team that led this did a phenomenal job from insight to

launch and beyond.”

“Habits were changing, with fewer sit-down meals and far

more on-the-go snacking, and this posed a challenge to

refrigerated-meat categories—one that we wanted to frame

as an opportunity,” continued Geoffrey Feil, senior director

of marketing, Lunchables, P3 & Claussen. “Back in 2010

and even earlier, we were seeing a number of mutually

reinforcing macro forces in the context of young adults’

snacking habits”:

• “As noted, snacking was increasingly displacing

traditional meal occasions.”

• “Natural, ‘better for you’ snacks with simple

ingredients were all on the upswing.”

• “[There was] growing interest in the quality of calories


and the idea of ‘calories that work for me.’”

• “Protein, as a source of sustained energy, was

pervasively relevant to consumers.”

• “Greek yogurt’s explosive growth was kind of the

metaphor of the day.”

“One of the interesting paradoxes we uncovered was

that if you asked consumers for foods high in protein,

you’d consistently hear about meat, but in the context of

protein snacking, the refrigerated meat case was rarely

mentioned. Meat was an outsider at the protein snacking

party, but there was a potential ticket to entry for a brand

that brought together the three ‘original’ proteins while

having the credibility as a trusted brand of meat. This was

a job that Oscar Mayer could uniquely do, given its equity

as the trusted brand for meat coupled with its access to the

robust product portfolios of its sister brands, Kraft [cheese]

and Planters [nuts].”

“Our Breakthrough win with Lunchables Uploaded last

year strengthened our use of Jobs Theory and grounded

us in deeply understanding the desired progress that

consumers are trying to make in given circumstances,”

Feil continued. “Jobs [Theory] has helped us focus on

specific circumstances of struggle, apply a very wide frame

for category definition, and address emotional and social

requirements in addition to the functional aspects.”

“To help identify potential opportunities,” detailed Kaz

Gunay, the head of consumer insights and strategy, “we

maintain continuous conversations with consumers in key

groups. To underscore Geoff’s point, these conversations

reveal nuances that might not emerge from more general

trends research. They allow us to explore the edges of

consumer preferences and behavior, as well as to form

hypotheses for further consumer validation.”

“Trends and macro info are great,” Gunay explained,

“but they’re too broad-brush to reveal idiosyncrasies and

surprises. Also, you can be sure with trend research that

every competitor is seeing the exact same thing. The one-

on-one conversations provide an essential complement to

the more general information.”

“Several years before launching P3,” Gunay continued,

“we’d been spending more and more time with Millennials,

because we recognized the opportunity for the Oscar

Mayer brand to endear itself to this important cohort.

We wanted to understand their priorities and, in parallel,

identify a growth pathway for the brand. Importantly, we

kept a broad aperture for our discovery. This perspective

allowed us to make some encouraging discoveries that

we would have missed had we framed the marketplace

through a narrow lens such as ‘meat’ or ‘protein’ or

‘refrigerated.’”

Feil said, “One behavior we frequently witnessed was

the extent to which many consumers were mixing and

combining ingredients to create snacks that met their

requirements. An individual might put a handful of nuts

in a plastic baggie, some pieces of cheese in another and

pack a piece of fruit, for example. This behavior suggested

that there really wasn’t a perfect solution for the many

snacking occasions of the millennial consumer.

“Not only is there a hassle factor associated with this DIY

[do-it-yourself ], multiproduct behavior, but we saw how

it frequently led to suboptimal, frustrating outcomes. ‘I

forgot to cut up cheese this morning, and we didn’t have

any fresh fruit in the fridge, so I ended up eating a whole

can of nuts,’ or ‘I’m bored eating the same better-for-

you snack every day, so I’ll have a bag of chips just this

one time’—these are less than ideal trade-offs from a

consumer point of view.”

HABITS WERE CHANGING, WITH FEWER SIT-DOWN MEALS AND FAR MORE ON-THE-GO SNACKING, AND THIS POSED

A CHALLENGE TO REFRIGERATED-MEAT CATEGORIES—ONE THAT WE WANTED TO FRAME AS AN OPPORTUNITY.

SPOTLIGHT #9 | OSCAR MAYER P3


“Through additional qualitative work, we

discovered the multifaceted consumer

criteria that made sense of the cobbling

and dabbling behaviors,” Fragnito

added. “From a functional dimension,

consumers were looking for energy—but

energy that sustained them, not the type

of jolt they’d find in an energy drink or

candy bar. There was a marked preference

for real, whole foods, and this is where

most of the bars fell short: They were too

processed, engineered, and performance-

oriented for people who wanted whole

foods. And while there were certainly

some consumers who required organic

and perceived superfoods, this was not

a mainstream requirement. We found a

broad spectrum between candy bars and

wheatgrass smoothies, and that’s where

we zeroed in.”

“Consumers were also looking for a degree of satiety that would power them

through but not fill them up,” Feil said. “Great taste was nonnegotiable, of

course, and texture variety was a game changer. An important detail here is that

the consumers we engaged liked having a variety of food forms in their snack

because of the enhanced taste and textural experience—making the snack

more fulfilling. A combination of meat, cheese and nuts has an advantage over

bananas and yogurt in this aspect, because it delivers a multisensory experience

(taste, texture, bite) that better emulates a (more substantial) meal-like

experience.”

“The challenge,” Feil continued, “was to deliver the multiple real, simple foods

in a portable format that enabled quick consumption with no cleanup.”

“Our experience in lunch and snack kits with our Lunchables brand provided

valuable expertise in the complexity of multiform assembly,” Gunay added,

“so we began to experiment with combinations that would resolve the current,

pervasive practice of cobbled-together solutions. We were optimistic that if

we could integrate all of the ideal protein-bearing foods into a single pack—

delivering the taste, texture and performance that consumers wanted—that

we could help consumers perform the job with far greater convenience and

satisfaction.”

“As we worked to refine the components of our snack kits, we faced some pretty

major operational hurdles,” Gunay elaborated. “These are the challenges that

no consumer would ever see but that you have to resolve. For example, bringing


THE UNPRETENTIOUS PROTEINWhen you’re the real deal, you don’t need artificial hype. You have real workouts, because they keep you on track and moving forward. You don’t go to the gym to tweet about it. And you’re not looking for some magic elixir.

P3 IS AN ORIGINAL PROTEIN.No pretense, no overpromise and certainly no science project.Just meat, cheese and nuts.That’s 13 grams of protein from a source you actually recognize—food.

P3 delivers serious protein...without taking itself too seriously.


an allergen, such as nuts, into an otherwise nut-free facility

creates challenges. We worked with the USDA to create a

‘plant within a plant’ that would be the first USDA-certified

facility that handled nuts, cheese and meat all under one

roof. Investing in the ‘nut house,’ as we call it, reflected a

major vote of confidence on the part of senior leadership

and was essential to our success.”

“Once you start changing supply chains and making big

capital investments and developing a new brand and

working with a new pack form, it’s easy to let cost get the

better of you and wind up with a product that flies off the

shelves but is ultimately bad for the business,” cautioned

Fragnito, who is now the president of Beverage and Snack

Nuts. “Breakthrough Innovation poses a challenge that

requires a balancing between taking a long-term view of

the business case and also being really smart about costs.

We had a great cross-functional team and were able to get

this right, producing a highly incremental product from a

business perspective that also tested fantastically well with

consumers.”

“However, all of this upfront work still left a myriad

of decisions and challenges to address in taking this

innovative product to market,” Fragnito continued. “I can

think of at least 10 initiatives I’ve been involved with over

the years where there was a great insight and a seemingly

terrific product, but somehow we tripped up in taking it to

market. Many of the missteps are explained by two causes.

“First, there are so many seemingly small details that need

to be right: Where should we be in the store? What’s the

right pack form? What’s the right pack copy? Do shoppers

need to be able to see the actual food elements? Does a

glossy pack finish attract eyeballs or create a glare? Do we

have the right shelf set? Knowing that variety is important,

should we launch with a mixed-SKU multipack? You really

need to get a ton of things right, and I think it’s easy to

overlook these details.

“Second, and this may sound contradictory, but you can’t

run the business from a spreadsheet. One of the things

I encouraged the team to do was get out in the field and

work with retailers and watch consumers. There’s a small

store near one of our plants where we’re friendly with the

owner, for example, and we’d literally take a bunch of test

product over to the store and start trying stuff—with the

retailer and the consumer. It may seem crazy, but I think

you need both—sophisticated optimization tools as well

as . . . a bit of entrepreneurial grit. Maybe it’s my military

background, but I believe in getting out into the field and

seeing what really works—and what doesn’t—with your

own eyes. You experience something, and you remember

it, but it is easy to forget the conclusion shown in a chart

or a spreadsheet.”

“There are challenges that, at some level, all new products

face,” Gunay added, “but given the novelty of this item,

there were few reference points to navigate or benchmark.

Knowing all of this, it was important to prototype and

experiment, as Joe said. For similar reasons, we engaged

our creative and design agency partners early in the

process, so that we would have maximum degrees of

freedom for change, and we iterated our ideas to get all

pack elements and price aligned and optimized.”

“We knew we needed to work very closely with our retail

customers,” Fragnito recalled, “to explain the product

strategy and to make the launch successful.” He pointed to

two specific challenges:

1. “Consumers were not in the habit of shopping for

I THINK YOU NEED BOTH SOPHISTICATED OPTIMIZATION TOOLS AS WELL AS A BIT OF ENTREPRENEURIAL GRIT. […] I BELIEVE IN GETTING OUT INTO THE FIELD AND SEEING WHAT REALLY WORKS—AND WHAT DOESN’T—WITH YOUR OWN EYES.



snacks in the refrigerated meat section.”

2. “It’s a small pack, and we needed it to pop visually.

How do you command shoppers’ eyes with an item

that is much smaller than neighboring SKUs?”

“This required a combination of patience, good

communication with our retail customers, bold pack

design, and strong media support. We knew we had a great

product that really fit the circumstances and requirements

of our target consumer.”

Gunay continued, “Print, TV and online advertising played

huge roles in introducing P3, giving meaning to the brand

and linking it to the target job. Our creative executions all

featured the pack, the P3 brand and the punchy messaging.

We contrasted P3 to lab-generated, engineered snacks that

many consumers were abandoning. Featuring the clear

pack with simple, whole ingredients informed consumers

of what to look for and why P3 was the ideal snacking

solution. Messaging was direct, witty and edgy: ‘Serious

protein that doesn’t take itself too seriously.’ P3 is real,

good food, and it is also good fun. ‘Unpretentious protein’

really fits the brand.”

“We launched with four SKUs and have continued to

support and expand, so that now we are up to 12 SKUs,”

Fragnito summarized. ”This is not just variety for variety’s

sake. The variety allows us to fill a broader portfolio of

consumer jobs but all within the brand’s range of protein

snacking.”

Feil reflected, “At the outset of the innovation journey, we

had a clear sense of the consumer’s ‘job spec,’ and then

we set to work to build the product ‘résumé’ in the hopes

of getting hired. When we found that things really were

playing out as hoped, it fueled our energies to double

down on P3. You could see this affirmation in the source-

of-volume data. The consumption was very incremental

to the refrigerated-meat section: P3 was getting hired over

imperfect and partial solutions.

“This business is on trend, and it is nailing an important

consumer job. We’re working with retailers to build a

snacking category in the refrigerated-meat case. P3 is

playing a valuable strategic role, and we’re really looking to

support its continued growth. It is a great start, but we’re

just beginning.

“And as with any launch, we’ve been learning and

optimizing as we go. Even with the most successful launch,

we know that we have some things right, some things to fix

and plenty more to do. In year three, we are working with

our retail partners to ‘mainstream’ the category; we are

adding new combinations, expanding into new channels,

further optimizing graphics and adjusting where and how

we communicate.”

With over $75 million in retail sales and a 65% growth rate,

P3 is off to an energetic start, and the team is fueling up

for sustained, successful growth. P3 illustrates how a new

subbrand can energize a trusted, established parent while

connecting with younger consumers and expanding an

important retailer category—a Breakthrough Winner all the

way around. n



S P O T L I G H T # 1 0

SALLY HANSEN® MIRACLE GEL™

D E M O C R AT I Z I N G S A L O N-Q U A L I T Y N A I L S

“STRATEGIC CONTEXT IS IMPORTANT,” SAID JEREMY

Lowenstein, vice president of global marketing. “One of

the reasons Coty bought Sally Hansen in 2008 was the

opportunity to take a great, trusted technology brand,

infuse it with more emotion and expand it on a global level.

“The . . . acquisition was well timed because the recession

actually drove a steady stream of downshifting from salon

manicures to DIY [do-it-yourself ], fueling steady growth

2009 to 2011. Things plateaued in 2012, and it was clear

that we would need innovation rather than external macro

forces to drive growth. We launched into this with two

simple organizing questions:

• “What makes our brand tick?”

• “What are the experiences and outcomes that women

are struggling to achieve as it relates to their nails?”

“The first question had a ready answer—albeit a less

than totally satisfying one. Sally Hansen was a well-

established brand with a trusted reputation for products

that work, based on leading technology and robust science.

Consumers trust that Sally Hansen brands will deliver

on claims, which is worth a lot in the cosmetics industry.

Consumers are often skeptical about the relationship

between price and quality and the credibility of claims.”


“On the one hand, this trust is a great base for innovation,” Lowenstein

reflected, “but it’s just a base. We saw an opportunity to engage at an emotional

level and to create experiences, not just deliver cosmetic utilities. This is where

our thinking dovetailed with the second question about circumstances of

struggle: What were the desirable feelings and experiences we could create,

taking inspiration from consumer insights?

“Market trends presented some clues. Just as the retail nail business plateaued

in 2012, UV/LED-curable gels began to grow significantly in nail salons. Gels

offer the advantage of a more durable and longer-lasting application, but

they have some significant downsides, which we found to be keeping many

women on the sidelines. It wasn’t hard to see why: Curable gels required a

time-consuming five-or-more-step process and cost around $35. Furthermore,

when you wanted to remove the gel, you had to soak your nails in acetone for 15

minutes and then scrape off the residue. In short, the finished look of gels was

great, but the application, removal and expense added up to major barriers for

many women.”

“The opportunity to ‘democratize’ gels was not hard to spot,” Lowenstein said.

“There was clearly a major opportunity to expand the category by addressing

the big market of non-consumers and intermittent consumers. That said, the

barriers that depressed demand existed for a very simple reason: There was no

alternative technology available.”

“Sally Hansen’s scientists and product engineers are the best in the industry

and embraced the challenge,” Lowenstein added.

“But for us, this was always about more than a technical challenge and

a commercial opportunity. The reason most of us are in this business is

because, when we create great products, they enable great experiences for our

customers. At our best, we help women feel special every day. When women

pull our products into their lives because it makes them feel special, that

translates into strong commercial performance, and it’s also what makes our

work so rewarding.”

“We set out to develop a revolutionary new technology and introduce an

amazing product,” Lowenstein reflected, “but the focal point for our innovation

effort was not the technology or the product. It was the experiences we could

enable for the women who buy Sally Hansen.

“We had our innovation brief: salon-quality performance, hassle-free application

and removal, and price-accessible to mainstream women.”

“But first we had to solve the technical challenge, and that really was a

challenge,” Lowenstein acknowledged.

THE FOCAL POINT FOR OUR INNOVATION EFFORT WAS NOT THE TECHNOLOGY OR THE PRODUCT. IT WAS THE EXPERIENCES WE COULD ENABLE FOR THE WOMEN WHO BUY SALLY HANSEN.

SPOTLIGHT #10 | SALLY HANSEN® MIRACLE GEL™


“A great part of Coty is that we work cross-functionally

all the time. It’s not like the R&D team do their thing and

flip it over the wall to marketing, who try to put a story

to it and then ask the sales force to get the product on

shelves and into consumers’ hands. I think this company

decided a long time ago that we had no interest in being a

commodity cosmetics company. We want to win in all four

segments of color cosmetics with great products, but our

enduring success is a function of enabling experiences that

make women feel special. That’s the secret to customer

loyalty and competitive advantage, and core to those

outcomes is an organization that is all aligned with the

same goals and integrated across functions to deliver. All

of our functions integrate around the same thing: enabling

customer experiences that make them feel special.

“Once we cleared the high hurdles, what we really wanted

to do was bring nail color and care to life—infuse joy and

positive energy into a segment of color cosmetics that was

experienced as more ‘chore’ than ‘fun’ by many women.

When you see how we ultimately brought Miracle Gel to

market, you see how serious we were about bringing the

product to life, not just to market.

“What our R&D team was able to achieve is right there in

bold on our home page”:

• 2 steps—rather than 5—color and topcoat

• No UV light required (as is used in the salon)

• Up to 14 days of color and shine

• Easy removal

“This was a transformational product,” Lowenstein

underscored, “enabling millions of women to access the

same quality of nail treatment historically reserved for

the salon and with far greater convenience, ease of use

and lower price. In order to match every moment and

need, we also introduced a far wider palette of colors

than other polishes, further separating ourselves from the

mainstream.

“I think it’s important to note how easy it would have been

to stop there: to bring an amazing product to market and

let the retailer and the customer take it from there. After

all, we had created an amazing product that was sure to

succeed, so why spend more? Why make it harder? And the

reason, as I‘ve said before, goes back to our acquisition

rationale and our ambition at the outset of this initiative,

which was to bring life, emotion, storytelling and great

experiences to nail care. So how to do that?

“In tandem with Miracle Gel, we launched Miracle Match

online. The idea was not only to help women find the right

color for them, but to bring each color to life through the

stories and personalities of seven different personas. In

print, we developed nine ad units to introduce the models

and the collection along with the breakthrough technology.

Through the Sally Hansen website, women could take a

quiz that would help find the right match and introduce

the seven women who personified our initial colors. Also

online, each of our seven ‘color girls’ had 15- to 30-second

vignettes that surrounded the products with stories and

personalities.”

“All of this enabled customers to make the experience more

their own,” Lowenstein noted, “and to express themselves

on their social platforms and have some fun with the

amazing colors and the stories and the quizzes that, in

total, brought a huge amount of energy to a category that

had been more hassle than fun historically.

“And we really made a splash at retail. We had a great

consumer story for them. We had a great product story for

them. And we had a great brand story for them. We spent

a lot of time with our key retail partners, and they really

bought into the vision: why this would bring incremental

traffic and margin into their stores, why this was such a

powerful product, and how it would energize the biggest

brand in nail care with an unprecedented emotional energy.

“Typically, new products are launched during the end-of-

year holidays, but both because of our desire to get to

market as fast as possible and also to avoid the noise of

numerous other launches, we decided to launch off cycle

and introduce the product in July. We went all out to have

‘stopping power’ in the store: large displays, models, great

color, gorgeous pack and compelling price strategy, along

with easy-to-understand product education.

“We worked really hard on all of these activation details,

and setting the right price was a big part of the formula. At

the high end of the spectrum was the $35 salon gel price.



At the low end was the historic Sally Hansen price ceiling

of $6.99, which was already considered a premium price

point. Where we landed was $9.99 for color and $9.99

for the top coat, or $15 for a dual pack—so you had the

two-step process in one pack—providing a $5 discount to

consumers.

“Across all media, including in-store, we had huge success

with our ‘OMGel’ copy and engagement activities that

consumers picked up and

distributed through their own

social channels, sharing their

colors and styles with the

OMgel tagline. We have over

1 million likes on the Facebook

page and a very engaged

customer base.”

“Summarizing the Miracle

Gel launch,” Lowenstein

concluded, “it has been great

for the company. Miracle Gel

has also transformed and

reenergized the Sally Hansen

brand, as discussed, bringing

much more emotional energy

and storytelling to the brand,

making it far more engaging

to our customers. And finally,

the consumers: we know we

have made millions of women

feel special. We know we

have helped create special

moments—personal and

social experiences for our end

customers.

“It’s a great achievement,

but it’s just a great start. We

have introduced follow-up

launches that have been very

successful, and this is an

industry that never sits still,

so there’s not much time to

celebrate individual successes.

Miracle Gel is a great platform,

though, and will provide a base of innovation for years to

come.”

With first-year sales of $104 million and strong growth

in year two, Miracle Gel is creating great outcomes for

Sally Hansen, as well as for millions of customers. It is a

miraculous story of a tremendous breakthrough success—

definitely earning an “OMG!” celebration. n



S P O T L I G H T # 1 1

SKINNYPOP® POPCORNB O OT S T R A P S TO B R E A K T H R O U G H

IF YOU’RE FORTUNATE ENOUGH TO SIT DOWN WITH

SkinnyPop cofounders Pam Netzky and Andy Friedman,

you’ll notice one word used over and over again to describe

the atmosphere during their meteoric rise: mayhem. From

selling the first bag in August 2010 to selling the company

in July 2014, “it just never let up,” Friedman recalled

wistfully.

“Three o’clock in the morning, we’d be thinking of things

and texting each other and trying to solve unfamiliar

problems,” Friedman continued. “We were eating, sleeping

and breathing this business nearly 24 × 7 × 365. We didn’t

hire our first employee until September 2012, and we sold

$18 million in that year and were at a much higher run rate

by the time we finally hired some help.”

“It was Andy and I generating sales, making the popcorn,

hand-sealing each bag, making all the supply orders. It was

insane,” Netzky added.


Popcorn is a classic snack that has enjoyed centuries of

popularity—hardly with the makings or markings of a

21st-century superfood. So where did this Breakthrough

barnstormer come from, and how did Netzky and

Friedman make it happen?

“Pam and I met in 2007 and shared a love for popcorn,”

Friedman recalled. “In our hometown of Chicago, Garrett’s

is an institution, and as much as we loved their popcorn—

and the cheese and caramel flavors particularly—we had

this idea that maybe we could make something even

better.”

“No research,” Friedman continued, “just the two of us

trying to make amazing popcorn. Through a ton of trial and

error, we developed some fantastic flavors. Great popcorn

is so simple from an ingredients perspective, but the kernel

and the oil you choose actually make a huge difference. It

took quite a while, but we loved what we’d developed and

decided we’d give it a go.”

“Neither of us had any CPG [consumer packaged goods]

or food experience,” Netzky added. “Andy was a banker,

and I was an entrepreneur—but in the world of salons and

nothing related to this business.”

Before there was SkinnyPop, there was Wells Street

Popcorn. “We opened our first retail store in 2008, and by

the end of 2009, we had three stores in the Chicagoland

area and distribution of bagged popcorn to a handful of

local grocery stores,” said Friedman. “We were doing well,

and customers raved about our flavors. But as much as

folks loved our caramel and cheese varieties, they’d say

things like, ‘This is the best popcorn I’ve ever had. See you

in a month!”

“It wasn’t terribly hard to figure out,” Netzky

acknowledged. “The cheese corn and caramel corn were

amazingly delicious, but they were seriously indulgent and

not something our customers were going to pick up every

couple of days.”

“If this was going to be a bigger business,” Friedman noted

bluntly, “we needed a better business model, and that

would require a new, healthier product.”

“Almost as soon as we started experimenting with better-

for-you options, we realized we couldn’t promote them

through our existing Wells Street stores alongside the

cheese and caramel corns, or people would start asking

about the fat and calories in those products, and they’d

flip,” Netzky said. “So it was a pretty straightforward

decision that we should develop a different name and sell

wholesale rather than retail.”

“We spent about five minutes sitting in a room discussing

names until we had SkinnyPop—and we loved it. We

hired a graphic designer, who developed the logo and bag

design, which is the same one you see today—very clean

and distinctive. We ordered bags and minimal equipment

to get us started, but we had no retail game plan,”

Friedman acknowledged.

“The minimum order was 25,000 bags, and we were like,

‘What are we going to do with all those bags?!’” said

Netzky. “And then the day the bags arrived, it was just the

two of us, so we fired up the poppers and started filling

bags.”

And that’s when the ‘mayhem’ really got rolling . . .

“I remember just running into stores, shoving bags onto

the shelves, and running out and onto the next account,”

Netzky laughed. “We really had no idea what would

happen, but we really believed in the product, and sure

enough, store managers were calling us back the next day

to reorder. We were on to something but had no idea how

WE WERE ON TO SOMETHING BUT HAD NO IDEA HOW TO SCALE THE MANUFACTURING OR

DISTRIBUTION. WE HAD NO SYSTEM.

SPOTLIGHT #11 | SKINNYPOP® POPCORN


to scale the manufacturing or distribution. We had no

system.”

“It’s really pretty funny how little we knew,” Friedman

laughed, “when it came to building retail distribution. Our

strategy was Google. We started googling for distributors

of natural foods and coming up with a list of unfamiliar

names and just calling people. We didn’t get many

returned calls, and those that did said, ‘Sounds great. Call

me back when you get into some stores, and we’ll help

you.’ And we’re thinking, ‘The whole reason we’re calling

you is to get into these stores in the first place!’”

“At the same time, we started going to some open buying

calls where local chains take ‘walk-ins’ pitching new

products, and we were up at Sunset Foods in northern

Chicago suburbs, and the guy in line in front of us is a

regional distributor with some bags of potato chips, so

we start talking to him. He agreed to come by our Oak

Park office, which was a single room behind the original

Wells Street store with one desk that Pam and I shared,”

Friedman continued. “When he arrived, we popped some

corn, and he loved it.”

“He said he thought he could help get us into the 17

Whole Foods outlets in the Chicagoland area,” Netzky

remembered. “Well, for us that was too good to be true, so

we signed up and started popping and praying! Norman

Distributors were true to their word and got us into Whole

Foods and a bunch of other critical early accounts.”

“Things took off,” Friedman summarized. “Early 2010, we

had the idea for a better-for-you popcorn. August 2010, we

sold our first bag of SkinnyPop. In the final months of the

year, we sold about $90,000 and were in 85 stores.”

“We exited the Wells Street retail business as of the end of

2010, which at least allowed us to focus on one brand and

business model,” Friedman noted. “We also outgrew our

limited production capacity almost immediately, and so we

were able to secure contract manufacturing by the end of

2010. This change solved our manufacturing constraint,

but all of the sales, distribution, procurement and financial

challenges were just multiplying.”

The ‘mayhem’ was just gathering steam . . .

“It just kept going,” Friedman continued. “In 2011, we

sold $3.5 million. [In] 2012, we sold $18 million. We were

exploding because we didn’t hire our first employee until

September 2012, so it was literally just Pam and I running

around like maniacs. Even in 2012, we had private-equity

investors calling all the time, offering life-changing deals,

but none of them really valued the growth potential we saw

for the brand, and we didn’t really need the money as much

as we needed distribution help.”

“Another key milestone came in 2013, when we sold a

minority stake to an entrepreneurial investor who brought

a six-person sales team. These guys definitely upgraded

the ‘Pam and Andy Show’ from a sales perspective, but

all the other operational challenges just mushroomed as

sales continued to soar,” Friedman noted. “2013 finished

with $70 million in sales and growing strong. In July 2014,

when we finally did sell the majority of the business to the

private-equity firm T.A. Associates, we were on about a

$150 million run rate. It was almost four years exactly from

the sale of our first bag to the sale of the company, and it

was basically one breathless, amazing ride.”

IT’S THE CLASSIC CASE OF ENTREPRENEURS BREAKING ALL THE ACCEPTED INDUSTRY AND CATEGORY RULES BECAUSE THEY DON’T EVEN KNOW WHAT THE RULES ARE. THEY START WITH AN IDEA AND A FRESH MIND THAT ANYTHING IS POSSIBLE.



“Looking back on it,” Netzky reflected, “I think one

important thing to the SkinnyPop story is the Wells Street

experience, because that’s really where we made most of

our mistakes and learned the hard lessons. It was before

we really started growing, so it was much easier to pivot,

fix and move on. We hadn’t planned it that way, but that

learning phase occurs in any new venture, and far better to

do it before you start investing in scale and growth.”

“They make it sound straightforward,” concluded Tom

Ennis, CEO of Amplify, the newly named entity under

T.A.’s ownership. “The reality is that nothing they did was

easy. For example, while the snacking industry is moving

to bolder, ethnic flavors, one of the keys to SkinnyPop is

that it is lightly seasoned yet delivers great flavor. What

this means is that you don’t get ‘mouth fatigue.’ You want

to eat the whole bag, and you know what? You feel good

physically and emotionally when you do. There is no guilt

associated with SkinnyPop eating.”

“I grew up in ‘big food’ CPG companies,” Ennis continued,

“and when I look at Pam and Andy’s story, it’s the classic

case of entrepreneurs breaking all the accepted industry

and category rules because they don’t even know what the

rules are. They start with an idea and a fresh mind that

anything is possible.

“We’ve really tried to preserve that culture at Amplify

to create a totally different kind of food company. Our

products are different, but that’s just a part of it. Our

employee culture is totally atypical of the CPG industry. We

have terrific benefits, all kinds of extra programs, unlimited

vacation, minimal hierarchy and great pay.”

“Our relationship with our consumers is different, too,”

Ennis continued. “Consumers love our products and

brand and want to share their experiences online and

engage with the brand. We do this in the physical world

as well—attending all sorts of events and festivals around

the country where SkinnyPop enthusiasts convene. This

really works for the brand, because what we’ve learned

about consumption is that consumers use SkinnyPop to

make good times even better: to ‘plus up’ already-positive

experiences. So if we join them in the settings where they

want and expect SkinnyPop to be, it just reinforces the

sense that we get you and want to be part of your life.

“This year, we’re introducing new chocolate and jalapeño

flavors, and we think the future of SkinnyPop and the

future of a totally new kind of food company couldn’t be

brighter. Pam and Andy remain very involved; they’re on

the board of directors and [are] key advisers to the ongoing

business.”

It’s as exciting an entrepreneurial story as any we’ve seen

in the course of the Breakthrough Innovation Project,

and it underscores that outsize success is possible even

for undersize firms. We’ll be looking forward to more

Breakthrough Winners—if not quite so much mayhem—

from Amplify in the years to come. n



Learn more about the Breakthrough Innovation initiative at www.nielsen.com/breakthrough.Explore more content on a variety of innovation topics at www.nielsen.com/innovation.

FOOTNOTES1. At a 1971 meeting at Xerox PARC, Kay said, “The best way to predict the future is to invent it.” Deborah

Wise, “Experts Speculate on Future Electronic Learning Environment,” InfoWorld, April 26, 1982, p. 6.

2. Nielsen data.

3. Christensen, Clayton M. “Assessing Your Organization’s Innovation Capabilities” Leader to Leader. 21

(Summer 2001): 27-37. Harvard professor and innovation authority, Clayton M. Christensen, developed

this capabilities model, initially referring to it as “Resources, Processes, and Values” in 2001. He

has published on this framework multiple times, subsequently revising the wording to “Resources,

Processes, and Priorities” to eliminate potential confusion over the interpretation of the word “values.”

4. For valuable thinking on these topics, see Shunryu Suzuki, Zen Mind, Beginner’s Mind (Boston:

Shambhala, 2011).

5. For more information on the Demand Driven Innovation system, see the 2013 U.S. Breakthrough

Innovation Report.

6. Calpino left Kraft Heinz in Q2 2015 and then consulted until joining Mondelez in Q1 2016.

7. McGauley retired from AB InBev in 2015 but is still actively engaged as a consultant to the company.

8. To read Clayton M. Christensen’s work on the theory of interdependence and modularity, see

claytonchristensen.com for links to various books and articles.

9. Marc de Jong, Nathan Marston and Erik Roth, “The Eight Essentials of Innovation,” McKinsey Quarterly,

April 2015, www.mckinsey.com.

DISCLAIMERThe information contained in this report is based on compilations and/or estimates representing Nielsen’s

opinion based on its analysis of data and other information, including data from sample households

and/or other sources that may not be under Nielsen’s control. Nielsen shall not be liable for any use of or

reliance on the information contained in this report.

ABOUT NIELSENNielsen Holdings plc (NYSE: NLSN) is a global performance management company that provides a

comprehensive understanding of what consumers watch and buy. Nielsen’s Watch segment provides media

and advertising clients with Total Audience measurement services for all devices on which content — video,

audio and text — is consumed. The Buy segment offers consumer packaged goods manufacturers and

retailers the industry’s only global view of retail performance measurement. By integrating information from

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improve performance. Nielsen, an S&P 500 company, has operations in over 100 countries, covering more

than 90% of the world’s population.

For more information, visit www.nielsen.com.

Copyright © 2016 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or

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