Brand "soul" key for PepsiCo

27 November 2012
NEW YORK: PepsiCo, the food and beverage giant, is seeking to pursue innovation based on a brand's "soul", moving beyond traditional approaches in order to develop ground-breaking products.

"There's a growing realisation that ... innovation has to come out of the brand soul, if you will," Manoj Fenelon, foresight director at PepsiCo's global beverage group, told Innovation Excellence.

"That's not meant to say that consumer inputs and market research and all of that aren't important. But starting from the brand itself takes you out of a more reactive frame."

Fenelon suggested it was vital that people running a brand shared a "sense of being" with its buyers, so they could form "one big force" sharing the same goal, an area where many business leaders fall short.

"They don't live in neighborhoods that are mixed. They live in a more gated world or community. And they don't have an immediate sense for the broad swathe of people buying sodas and chips."

Another reason the success rate for innovation is roughly 30%, he continued, is that lead times vary between 12 and 24 months, posing a challenge in terms of keeping up with the market.

Creating a "common context" where decisions reflect key trends like urbanisation, ageing socities, the rising social status of women and the challenge of sustainability, is key to overcoming this problem.

Fenelon cited energy drinks and vitamin-enriched water areas where both PepsiCo and Coca-Cola, the category-leading firms, were effectively caught by surprise, when perhaps they should not have been.

"At a big company ... there's a great resistance to reinventing something until it's time to reinvent it, and then of course it's too late," he added. "In reality, change isn't even an option. The right frame, the real choice, is what kind of change."

PepsiCo has allied with Jump Assocations – an agency arguing that innovation needs "seeds", or good ideas, and "soil", or a receptive culture – to foster more of an entrepeneurial air.

"Philosophically, my real challenge is initiating some change across a really big company," said Fenelon. "Real success would be imparting a sense of confidence and unleashing the power of imagination across Pepsi."

As an example, while PepsiCo often calls itself "the world's second largest food and beverage group" – behind Nestlé – this may not be an entirely helpful way of determining what it stands for.

"The future's not something outside of our company, something in the gathering distance that we have to react to," said Fenelon. "Rather, as the world's second largest food and beverage company, we should be actively shaping the future of food and beverages."

Data sourced from Innovation Excellence; additional content by Warc staff
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