As part of the WARC x Ogilvy Image to Impact report, Nick Rich, Vice President, Insights & Analytics at Carlsberg, spoke about consumer centricity, the challenges and opportunities of data, and why a purpose needs to be in a brand’s DNA.
If we look at how marketing has changed over the past 10 years, what are the biggest shifts that you have seen personally in that time?
Three distinct areas come to mind.
Firstly, the continued shift to consumer-centric strategies. Many would argue the consumer has always been front and centre and you don’t succeed as a business if that’s not the case.
This appears more important than ever given the media and communication environment we exist in today. Good long-term strategies that address genuine consumer needs remain vital, That’s always been the case. Many big organisations cannot redirect for every new idea, fad, scandal or u-turn. So, a good strong consumer strategy keeps us from getting distracted.
Second is data. Obviously. The good things it can do, the not so good things it results in, the challenges of making it make sense and the, frankly, amazing learnings it can bring. Harnessing data caused a fundamental shift in the world of insights. ‘Analytics’ has again been added to all our functional titles as proof. While it’s a topic that has been covered in every way possible, I’ve reflected on the fact that, as an industry (Market Research or Insights), we had not realised the value of what we had been collecting these past 80+ years.
We could have done so much more good for society if we’d collaborated on connected macro and meta-data projects back in the 90’s & 00’s when the technology to enable that was becoming available. I’ve also seen a significant rejection of ‘big data’. Or, at least, what everyone thought it might look like when the term first appeared on the scene. The greatest successes appear to have come from a reductive data focus, not expansion or mass, large-scale data consolidation.
The third is marketing philosophies. I've changed categories a number of times in my career, now in FMCG for the first time. But regardless of category, I see everywhere the continued search for meaning through different marketing philosophies. Not necessarily just in the last 10 years but more of a continuation of a behaviour that is all about continuously shifting our thinking.
Marketing & commercial teams do tend to gravitate to models that give meaning and structure to what we do most clearly. And there are plenty to choose from. I think it's very easy to get led down new paths and sometimes we forget what we already know when confronted with a new model.
Whilst it's good having new ideas that are disruptive and make you think again, you always have to make sure you implement them universally, consistently. Like all philosophies, if they are to stick, you need everyone to believe in them. And most times, not everyone does. So you see the cycling onto the next model, and the next one, and the next one.
Over the last 10 years, we've seen some turbulence in what the latest big ideas of marketing are. Mix that with an ‘always on’ social media and you see a lot more tension in competing philosophies than you once did. It gets a bit binary and, truth be told, nothing ever is when it comes to consumer beliefs and behaviour.
When we're thinking of Carlsberg, what is your approach or philosophy when it comes impacting consumers' lives and potential profit?
In the old Carlsberg office, we used to have quotes from the founder JC Jacobsen, who started the business in 1947, line the building's walls. It might sound a bit of a cliché, but Carlsberg genuinely lives by the same principles that ‘J.C’ laid out 175 years ago. I know we hear that from all businesses, but Carlsberg genuinely lives it and it was quite a revelation for me. Some have to dig deep to find their purpose. For us, it has always been there.
It's absolutely embedded.
“The constant pursuit of better” is absolutely fundamental to everything we do, and whilst Jacobsen was using it in the context of brewing, he also thought the role of a business was to contribute to society, not just to the owners. That's why Carlsberg is part foundation-owned and one-third of our dividends go to the Carlsberg Foundation, which invests in arts, culture, science, research and development – not beer-related R&D, but agriculture, medicine and so much more. We uphold those principles and have done so since the business started, so it's quite easy as we've always had a clear purpose and we never forgot what it meant.
Aside from the clear guiding principles of the brand heritage and values, have there been any other trends in society that have affected your approach?
Thinking more about our position in society, our role as an organisation of people …. then yes, of course. Diversity and inclusion is something that is hugely important, and our business is no different to any other on this. Absolutely we had to look at ourselves and ask are we doing all the things we should be? Are we doing the right thing for all of our people and all our stakeholders in this business? I think that that's been an excellent shift because that's made all organisations take stock of who they are, who their people are and what they contribute to wider society. How do we talk about the world and our position in it and again, what is the right definition of success for the future?
Sustainability, and particularly ‘ethics’, is ever more vital. I’d like to see a faster shift away from the singular goal of profit above all else. The very idea of continuous growth is challenged, especially so if that growth is reliant on finite resources in a world that is less stable. Very clearly for Carlsberg, our guiding principles and foundation ownership mean that we have to think about more than growth and profits alone.
We have a way to go before society and businesses work their way through the challenge of what ‘success’ and ‘good performance’ will mean in the next decades however.
How much work do you feel still needs to be done to have that 'authentic connection' all the way from boardroom to customer interaction?
From a workforce and talent perspective, and how we enable and support all of our colleagues and stakeholders to grow in whichever way they may want to, there's always work to do, there's always improvement needed. I think we're probably at about a ‘five’ if I had to give a score today. We would acknowledge that transparently, because we know there are jobs to be done about how we look for talent and the biases we have at play in ways of working. We're a very international business and I like to think it is a hugely cosmopolitan organisation and I love it for that fact, but there's always more we can do. And what you see at Carlsberg, more than I've seen in other businesses, is a really, really active enablement of people to move into new positions, move markets, or move areas of expertise.
If you want to grow and you want to progress in your career at Carlsberg, you don't have to stay in the same role. You don't have to stay in the same business unit. You don't have to stay in the same market. You can move across the group and that's actively encouraged and it's got to the point where the business is so enthused by that, that it has talent pathways and protocols to completely open these opportunities up to colleagues, wherever they are currently. We're very active on that but we know there's always work to do and the boardroom knows that they have some balancing to do and we expect we will begin to see some action on that.
How do you see this drive for creating an impact and purpose for a brand evolving over the next 10 years? If you could paint a picture, what would it look like?
There's an element of semantics because we always talked about our brand's purpose, the reason to believe, the big creative idea and other seminal, defining templates and approaches to marketing and brand planning.
If the discussion of ‘purpose’ has got any role to play at the moment, I think it's helpful for organisations and/or brands to be regularly assessing their role in the market, their impact on consumers but also their contribution to wider society, wherever appropriate to do so.
You made a really good distinction earlier in saying it's not just about impact, it's about contribution. Could you expand on the difference between the two terms?
The debate isn't just about brands, it's about our reason for existence as a business. So, when we talk about contribution, the first thing we had to do was make sure that in everything from supply chains, to our brewing operations, our impact on the environment is measured and responsive activities put in place to ensure impact is minimal.
For example, beer uses a lot of water and for over six years now, we've built on our Together Towards Zero programme, driving our breweries' to recycle all waste water for other uses. That takes a lot of people developing new technologies and engineering solutions but it is an integral part of our business operation to do so. Not an afterthought. Not a side-project. Not an extracurricular activity, but a central focus of our brewing operation.
Further, during the early days of COVID, our breweries adapted to produce CO2 and alcohol for hand sanitizer manufacture.
How has the way you've communicated this to customers changed from a brand point of view?
Our portfolio includes some very established, household names across different markets amongst a total portfolio of over 150 brands sold globally. From Kronenbourg 1664, through Carlsberg, Tuborg, Somersby and Grimbergen, we are very conscious that there's a role for some brands to have a voice and while other brands may not have such a role.
Brooklyn is a great example. It was born in Brooklyn, it's there still and it's always had the connection with its local community, including the Stonewall Inn just around the corner. So, the Brooklyn brand rightly feels it has a voice and a contribution to make around LGBTQ issues and it's entirely valid for it to do so.
It’s that old cliché of having to have credibility and an authentic voice in supporting causes, sharing beliefs and ideals. That's really important for us.
The access to information that consumers have now is extraordinary. Has this sort of access to information about how your group's performing, affected any of your positioning?
People have a lot more understanding and access to knowledge now than they've ever had. Health and wellness is a perfect example where we’re having to adapt to changing consumer behaviours. Many of us are using tailored programmes and access to apps and data that track our every movement. If you're wearing a fitness tracker, it's fascinating to have all that data.
Building on this, we recognise that there’s an increase in numbers of people wishing to control their alcohol intake, health being one driver amongst others. Promoting responsible drinking is one of the most important KPIs we have in Carlsberg. It's a different consumer need that we have responsibility for and so Carlsberg, like all our other category competitors, and players in the alcohol industry, are taking a sensible, proactive view in helping consumers make choices there.
We’re the leader in Alcohol-Free Beer in many of the markets we operate in and it is our fastest growing segment, reflective of a changing consumer who is so much more aware of how they are living their lives.
How easy is it to measure the effectiveness of the 'making a contribution' impact?
We know what our brands need to stand for, we know what their reasons to believe are, we know what their purpose is, and we've always tracked those key elements.
Regarding operational activities that we have put in place to explicitly grow and improve our sustainable contributions, we track them all. The key measures will be KPI’s for the business as important as financial metrics, whether it be eradication of industrial accidents, Together Towards Zero and Beyond goals or Inclusion targets to ensure we remove gender imbalances across senior leadership.
We know that we are improving, and the people who invest and work with us know we are improving as we are very transparent about this. Even for consumers, we are telling this story and have a Carlsberg brand TV ad that's going out shortly which talks about the Foundation ownership and how the business directly contributes to society in many different ways.
So, essentially are we doing better than we were this time last year, for example, and that every year is the new benchmark?
Continuous improvement is necessary. When we talk about Together Towards Zero, it's very clearly a message that is strongest amongst our investors, but also our trade and channel partners because we're all part of the same value chain. With supermarkets, we work on packaging innovations together and we set targets for how we'll deal with plastic waste that any partner can hold us accountable for. Ultimately, however, it’s consumers that need to see the difference, visibly and actively, from all manufacturers.
But very few of our brands are going to start talking about environmental issues. That is a job for Carlsberg as a whole and select flagship brands we have in local markets. Indeed, Carlsberg has been very active in the UK in its partnership with the World Wildlife Fund – again through the Foundation ownership model and the active role it plays in conservation support and investment. So, there are roles for the big established brands to have a voice but we have to be very selective about that.
When you say very selective, you mean about the partners you choose?
Absolutely. It's got to be relevant and credible, and fit with what Carlsberg always set out to do: brew for a better tomorrow.
There's a thought that brands need to be the best at something but is it now more about trying to show how you fit into someone's life, a bit like being a companion?
I think it depends on the product or category. Different consumers want different things, of course. There is no doubt that consumers have rightly raised the level of expectations around quality and expectations of corporate contribution to society over and above wealth and financial returns.
We all know that consumers will favour brands that they trust. They will engage with brands that are purposeful, that have meaning. And increasingly, expectations are that companies and brands must do their business ‘in the right way’. There are all those clichéd terms. We talk about authenticity. We talk about provenance. It's all those things that we've been talking about for the last one or two hundred years. They've always been there but consumers are going to buy into those things if they see you're doing it right and you're doing the right thing by people.
How important is it to know the difference between distinctiveness and difference?
Some marketing philosophies focus heavily on distinction and differentiation. There’s strong arguments for both and there is no doubt that distinctive brand codes, be they semiotics, imagery, tone of voice, logos, fonts, packaging, etc. all help a brand to be visible and available.
It's [about] standing out, having a good reason to exist and a good reason to be there on the shelf, making sure people have heard of you, making sure you're available and that you deliver every time – in the supermarket aisle or at the bar.
Isn't this just common sense? A lot of what we talked about in terms of purpose and ethics, sustainability is just good common sense.
When it comes to creating 'purpose impact' does it help create differentiation? Does it help in the store?
It should just be a basic expectation of why we do what we do. If you're using it as a tool to differentiate, make a commotion or stand out from the crowd, you have to make sure you deliver on those promises. Especially concerning our contribution to society.
As long as you've got a good product and you're doing the right thing by your suppliers, making it the right way, selling at the right price and limiting your negative impacts on the world, then good. But you don’t have to make it a competitive differentiator. You're just doing the right thing. We're not in this for awards.