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The Secret Behind Successful F&B Product Development – The Customer Andrew Spencer, Director Customer Insights DNC Todd Kaplan, Brand Director Mountain Dew
Innovation Overview There are no new ideas… …yet we are living in an era of perpetual innovation
Innovation Overview Why do some succeed? …and others fail?
Innovation Overview We know it isn’t as easy as... HAVING A GREAT TASTING PRODUCT GOING WHERE NOBODY ELSE IS LANDING ON A KEY INSIGHT BEING FIRST GETTING A NEW LOOK LETTING THE PROPOSITION SELL ITSELF
Innovation is HARD We will continue to learn, try new things, and evolve as we go through the innovation process at PepsiCo Looking at products that have done well, the stars have generally been aligned around 5 core elements… KEY CONSUMER INSIGHT PRODUCT DEVELOPMENT PROPOSITION AND IMAGE MARKETING PLAN EXECUTION
1) Unearthing a Key Insight • Key Considerations: • Know the consumer • Understand the true need • Understand the barriers • Recognize the current landscape • Opportunity exists to revive morning occasion at C-Stores • 2nd largest occasion • Trips and $ per trip declining • Millenials not satisfied with current morning offerings • Millenials + Gen X make up more than half of morning occasion • Hot Coffee and Juice account for more than half of occasions • Millenials under-index on hot coffee and juice • CSDs under-index on AM occasion
2) Getting An Optimal Product • Kickstart Formula: • Dew + 5% fruit juice • Caffeine > Dew • Vitamins C & B • Mid-Calorie (80/can) • 2 Flavors: • Orange Citrus • Fruit Punch • Key Considerations: • Taste • Efficacy • Ingredients • Calories • COGS • Testing
3) Nailing the Proposition and Image • Creating a Sub-Brand: • Position around AM occasion • Establish role of name / Dew • Rigorous Consumer Testing • Dew users significantly interested in trying KS • Strong projected repeat • Projected incremental to LRB and CSD category • Key Considerations: • Cannibalization • Occasion • Package Type • Package Size • Brand Hierarchy • Name • Role of Ingredients • Graphics
4) The Marketing Tidal Wave • Integrated Campaign: • TV, OOH, Digital • PR: Over 500MM+ earned media impressions • March Madness Promo with ESPN • Mike & Mike Integration • Over 2MM+ samples • Digital ‘Dawn Patrol’ • Key Considerations: • Awareness • Trial • Creative • Media Mix • Timing • PR
5) Executing with Excellence • Getting it on Shelf: • Line Priced with 20oz • Over 65 ASPs • Multiple IRCs for trial • Meal Deal Partnerships • Right Equipment / Tools • Precise System Communication • Key Considerations: • Distribution • Pricing • Bundling • On Shelf Execution • Equipment • Value • System Focus
The Results • Kickstart is the biggest PepsiCo beverage launch in the last 10 years! • #1 LRB Category Innovation in 2013 • Projected to reach over $180MM in Year 1 • Achieved its distribution targets across all channels in first 2 weeks • In C&G Kickstart dollar sales are bigger than Coke Zero 20oz and 6x bigger than Dr Pepper 10 • Among highest repeat rates of any recent beverage launch – 48% vs. 32% avg • 153 index to LRB, 137 CSD • Highly Incremental: • 85% incremental to TM Dew • 75% incremental to PEP CSDs • 43% incremental to CSDs • 10% incremental to LRB
Where do we go from here? Kickstart your Night… …coming soon in 2014!
DNC Tools for gathering Voice of the Customer data
Delaware North is investing in processes and systems to capture more VOC more efficiently Internal Total Listening™ process provides us with 360⁰ degrees of gathering customer insights Integrating Multiple Sources - Primary Research - Social - POS - Insights and Trends
Delaware North using community panel to talk directly with NHL fans Total Listening™ Community Panel • 652 NHL Panel Members • Understand challenges and problem areas • Understand Site by Sitewhat is missing • Direct Feedback on Concepts, food preferences and local options Fast Flexible Focused
Highly flexible tool to gather insights... What is most inconvenient about ordering or buying food/ beverage at the arena? “Transporting can be tricky, so I take that into consideration when purchasing my food. Food vendors on the first level, while they have a better variety of food, transporting to get the condiments or to find a place to sit can be tricky.” - Nashville Female STH 43% of STH Under Spend Budget
…and create innovative packaging that solves the problem and captures more of the budget
Two Andrew Spencers at DNC Contact: Andrew Spencer (Corp) aspence1@DNCINC.com 716 858 5127 Andrew Spencer (CORP) Andrew Spencer