Solving FMCG challenges through the power of Open Innovation for Kraft Heinz
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FMCG; a market that is truly fast moving
For the Kraft Heinz Company (KHC), doubling down their efforts in Revenue Growth Management (RGM) is a crucial part of the strategy that will help them keep their position as one of the market leaders of the FMCG industry, Moreover, the KHC is always striving for operational excellence across business units and departments; RGM is not the exception.
Revenue Growth Management is the discipline of driving sustainable, profitable growth from a consumer base through a range of strategies around assortment, promotions, trade management and pricing. It is essential for keeping pace with a changing marketplace. Therefore, the RGM team at Kraft Heinz needs to understand and be up to date with the current (and future) dynamics of the FMCG industry for them to effectively create and adjust their growth strategy according to the market directions. However, the process of retrieving insights from qualitative sources was very inefficient, labor-intensive and there was always the fear of missing out on relevant insights.
A structured funnel to de-risk Corporate-Startup Collaboration
Knowing that plenty of existing technologies are already on the market addressing this specific business challenge, the Innoleaps Group acknowledged that it would be solved faster, cheaper, and more efficiently via Open Innovation rather than internal development. Furthermore, innovation intended to optimize current core capabilities in the short term (as in this case) is addressed more effectively through corporate-startup Collaboration (CSC). Therefore, following our own CSC framework, we were able to de-risk the process of identifying, selecting, and implementing the right technology provider that would eventually become their Market Intelligence partner. The Corporate-Startup Collaboration framework comprises a structured and facilitated process of Scoping, Scouting, Selecting, Proof-of-Concept (PoC), and Piloting.
The first step in this process (Scoping) was to properly understand and delimit the business challenge through an executive session. Using as input both the internal ambitions of their team and an outsider view of the market (our ‘Disruptive Analysis’ of the CPG industry), we defined the scope of the project and the criteria for the startups that would be scouted. Thereafter, the Scouting started. In this stage, our Scouting team, which sees more than 150k early-stage ventures every year, brings the learnings from over 10 years of scouting for our global accelerator programs to identify the best-fit solutions able to solve the business challenge at hand. Our tech scouting platform, FuelUp, and it’s integrated AI capabilities, is leveraged to produce the Long List of ventures. The next phase, Selecting, aims at creating the Shortlist of compliant, innovative, and mature ventures ready to collaborate with Kraft Heinz. This is done based on our Venture Readiness Assessment (VRA), a process used to grade the level of readiness and compliance of a venture. The assessment takes input from over 100 data points and looks at ventures’ ability to perform successful collaborations and the likelihood of creating post-collaboration ROI.
During the last phases of the CSC framework (PoC’s and Pilot), we guided the KHC team to work together with the selected ventures in a structured process of validation: team, culture, technology, and commercialization. The aim of the Proof-of-Concept is to check technical applications in existing business systems. During a PoC sprint (3-days pressure cooker), we mediated the collaboration between the KHC team and the ventures to (de-)verify the application and compliance of the solutions. Last but not least, the Pilot phase had the goal to smoothly implement the chosen solution into the core business of Kraft Heinz by running tests in small samples. During the pilot, we guided the KHC team into scoping the roadmap of implementation, defining goals, evaluating results, and establishing the next steps.
Solving real problems with scalable solutions
We identified 34 startups & scaleups able to solve their problem from six different angles: from text extraction and summarization technologies to semantic solutions and BI platforms. Furthermore, after analyzing the companies with our ‘Venture Readiness Assessment’, 6 of the companies were better suited to the task at hand. All of them developed Proofs-of-Concept for the KHC team.
During the 3-days PoC sprint (which also served as an ideation/inspiration session), the RGM team realized that some of the companies were well-positioned to solve the initial stated problem and much more. Having this in mind, one company (AlphaSense) was selected for the Piloting phase. Thereafter, the FP&A team from Kraft Heinz was onboarded in the project to take part in a Pilot that would address a new, bigger, and more critical business challenge.
For the next three months, the Kraft Heinz Company’s team was guided to effectively integrate the AlphaSense market intelligence platform within their daily operations in a compliant and stable way, while solving a real business case for the FP&A department. The pilot allowed them to seamlessly generate a market overview of the F&B industry between June and July 2021. It included insights from more than 15 different sources of Broker Research (eg. BofA, Bernstein, Jefferies, Credit Suisse, Morgan Stanley) and addressed the most relevant topics for the industry within that period, such as inflation, pricing, margins and the resurge of the on-the-go consumption.
At the end of the pilot, our team performed training sessions to KHC’s team and delivered a user manual for further implementation of AlphaSense within the company. After evaluating the pilot internally, Kraft Heinz decided to extend their partnership with AlphaSense within the Global FP&A team and are currently evaluating the roll-out of the solution across the different local teams.