For the last two years, Karen Scott has been focusing on what she describes as the "sharper end of innovation.” With almost 20 years of experience working at PepsiCo, she is now spearheading the European Future Brands division, exploring how the company could grow into emerging trend spaces.
“The task really is to map out the future shape of consumer demand as we see it across our key categories, and really try and find new brands to nurture and grow in this space that we believe will be big bets for us going forward,” she explains. “Also, from a capability point of view, we want to try and accelerate new capabilities and faster and stronger ways of getting to new innovation.”
While PepsiCo’s most well-known brands might be Walkers, Quaker Oats and, of course, Pepsi itself, Scott works on the company’s trailblazers, such as KeVita kombucha and the Off the Eaten Path snacking brand, which was co-created with Sainsbury’s.
Significant investment has gone into insights, data and technology to bolster this innovation, in particular the 360 Always On Trend Engine: an analytical tool that can help the Future Brands’ team spot trends earlier.
Here, Scott explains how she is evolving the way prototyping and product testing work at PepsiCo, as well as discussing how changes in diet and attitudes to sustainability have affected development.
The 360 Always On Trend Engine is a tool that our insights team has built that allows us to monitor both traditional and social media, blogs, message boards, restaurant recipes, review sites, and essentially creates some algorithms that allow us to identify what trends are going on in the marketplace and which we believe will be the ones that will sustain. That allows us to test and learn in spaces that we wouldn’t originally play and helps us get to market much faster than we could before.
We’re also changing how we then approach the innovation itself once we’ve got that insight. There’s a couple of things I’d call out. The first is that we are experimenting now with what I call ‘design sprints.’ Traditionally in large companies, the whole innovation process has taken quite a long time – in some cases a number of years. We’re trying to condense that very upfront piece of consumer centricity and creation into a week-long sprint, where we have everybody we need from across a functional point of view, from our insights team and design studio to R&D– we’ve actually got a product development chef as well. We essentially spend the week together embroiled in a problem, creating solutions, creating prototypes as we go, and by the end of the week having a pretty good idea, having had some feedback from consumers, which are the strongest ideas and prototypes we’ve got.
From there, we’ve now got the capability to create what I’m calling ‘minimal viable propositions,’ and go and test those in marketplace. Future Brands has got the capability to do that through two key mechanisms: the first is through access to new lighthouse accounts. We’ve recently been experimenting with kombucha through [KeVita], which was an acquisition over in the States three years ago. We’ve imported that brand over and we’re busy learning around kombucha and how we accelerate into this very interesting trend area in beverages.
The other area is co-creating propositions with some of our customer partners. Over the last two-and-a-half, three years, I’ve been working very intensively with Sainsbury’s to help develop and co-create a brand called Off the Eaten Path… a proposition that we are, in 2020, going to take more nationally across the UK.
[With the new innovation process], we can get to market in 50% less time than we have done on traditional innovation projects. So, for us, a significant improvement.
We’re looking now at leveraging some of the approaches that we’ve taken on these trend areas and tried to apply some of those to our core brands. We’d like to increase that even further and we’re working on ways to do that. But clearly when you’re a big company, we need to make sure we’re going through the right processes and that we’re launching stuff into market that we’re absolutely sure is food safe and complies with all our standards.
What’s incredibly helpful is at the heart of the  tool is this construct that there are seven human drivers that really don’t change over time. What happens is that macroforces – things like macroeconomic circumstances, political situations, wellness, technology – all those things influence manifestations of how those will play out. What we can see over time is that there are some key themes that emerge, but the manifestations of those change over time. For example, an area that evolves all the time is diets.
Paleo 12 months ago was really trending highly. As you look at it this year, the two most interesting diet spaces that are trending very highly are keto – keto has sort of overtaken paleo as its trend value – and plant power.
Veganism has massively increased over the last two, three years in particular. And I think that’s mainly due to the rise of people’s focus on sustainability. Plant power now isn’t just about animal welfare, it’s about sustainability more broadly. What we’ve been able to do in both those spaces is play with both those trends on our Off the Eaten Path brand. Those trends inspired what we did launching pulse and vegetable snacks, but also allowed us to launch a keto version in our nut range. We also launched some high-protein fava bean and corn nut mixes, to play in that trend and experiment really with what’s going on with that and consumers’ understanding.
As well as different diets going on, consumers still want to have enjoyment from their treats; that’s a fundamental need and one of the main reasons that people eat snacks. But we’ve seen over the last five, 10 years, increasingly, more urgently, consumers wanting to have the pleasure without the guilt. And I guess that was the inspiration initially, 10 years ago, when we launched Walkers Oven Baked and Sunbites, and created that segment. But it continues to grow very dramatically, and we’re able to do more and more in that space. This year we launched our vegetable crackers in that space, delivering all the taste of Walkers you know and love, but now with different flavours, enabling you to have that indulgence without the guilt.
We’ve got a number of product development chefs that we work with to allow us to try some of these things live and very early in the process, so we are able to see an experiment with flavour and actually get consumer feedback within the first day or two of having those prototypes.
I think the benefit of having these separate brands and these future brands is we can experiment in a relatively low-key, low-risk way, away from the core brands. Then, once we’ve learnt about something and it’s getting bigger and it’s nearer the tipping point, we can potentially take some of those ideas or flavours or ingredients and put those onto the core brands. And that’s certainly what we’ve done with Oven Baked. Having seen how successful we’ve been with vegetables and pulses on Off the Eaten Path, we’ve then quickly put that onto the Oven Baked brand, and that innovation this year has been going really well.
In innovation, the focus a lot of the time is on the idea itself, the consumer proposition, and not enough people pay attention to the economics and the supply model. I’m fairly obsessive now on this point, having had things fail at a certain point down the road not because the consumer proposition wasn’t great, but because the commercial model was never going to work.
Can we create the proposition that the consumer wants at a price they’re willing to pay, at a price where, frankly, we can still make enough money? Can we see line of sight of this being a sustainable financial and supply proposition in the future?
I think you’ll see us partnering more with customers. The Sainsbury’s experiment has gone brilliantly and we’ve had a lot of interest – and demand, frankly – from some of our other retail partners to go through that same process. We will, I’m sure, collaborate more closely with more customers in different areas, and that will guide I think to some extent the things that we propose.
You should also expect to see us launch innovation in a different way. One of the initiatives we’re introducing as we speak into our innovation work stream is an innovation called Sustainable from the Start. As you’ll know, there’s a huge amount of focus on sustainability, packaging, the ingredients themselves. We are essentially introducing a framework that will help us to assess all the way through the innovation process the impacts that the innovation will have on water, carbon footprint, packaging, sustainability. We will use that to help make sure that the product pipeline we’re launching going forward will be sustainable from the start. That is a big focus of what we’re doing across not just on my Future Brands portfolio, but innovation more broadly at PepsiCo.