As the global Covid-19 pandemic continues, it can be tempting for brands to batten down the hatches and forget about bringing new products to market.
That would be the wrong move, says Tata Consumer Products’ head of global innovation Liliana Caimacan, who believes there is no better time for companies to embark on innovation. She urges marketers to consider how they can take their business out of its comfort zone as lockdowns ease and we enter the next phase of the pandemic.
“Now that we are going out of the current context and looking forward to what’s next, we need to develop and evolve. The role of innovation is becoming very important. If you look back a few years and different crisis situations, out of crisis we see a lot of innovation. I would expect the same here,” says Caimacan.
“It’s the ability of companies to see this as an opportunity and take the courage to put investment and effort behind developing innovations and allow the disruptive ones to come to life. Take courage, go beyond and take advantage of this time when we are so constrained. We know limited resources spark creativity.”
Speaking on the latest edition of The Lowdown, a series of webinars being run by Marketing Week’s parent company Xeim, Caimacan admitted it was a challenging start to the year and she can understand why brands have put innovation on hold and focused on core products.
However, it is innovation, she argued, that will help brands look “beyond the narrow future” and capitalise on new trends and behaviours.
“Recession is a reality, but it is an opportunity,” she explained.
“It’s a big challenge for all of us working in the innovation space to see the innovation gaps where we can create something meaningful for people, which will be at the intersection between consumer needs – what do they really need beyond the declarative intention – what are the tech possibilities and how we can quickly connect this with consumer need.”
It’s the ability of companies to see this as an opportunity and take the courage to put investment and effort behind developing innovations.
Liliana Caimacan, Tata Consumer Products
Tata Consumer Products – a global company spanning non-alcoholic beverages and food products, and behind brands including Tetley and Teapigs – was poised to launch herbal tea and kombucha brand Good Earth in the UK prior to the lockdown but had to wait to go live in partnership with Sainsbury’s until May.
Launching a new product during lockdown was challenging on many levels, not least getting all the raw materials together on time, which in many cases were being delivered from China and Africa, as well as contending with the lockdown rules across different countries.
Caimacan admitted the biggest challenge was adapting the launch plans and communication strategy.
“This is a brand rooted in California, it’s very outgoing and addresses millennials, and it is about experience and experimentation. It was about new things and when we talk about tea it’s a social drink. There were trade shows we wanted to attend. None of this happened,” she explained.
“The big challenge was rethinking the launch plans, the campaigns, the activities and adapting to a new way of communicating.”
Sampling, for example, was a big part of the original plan, which took on a different dimension thanks to the lockdown. The team also had to address their tone of voice and be mindful of the situation when it came to engaging with consumers.
The Good Earth brand was already present in the US, a market severely affected by the Covid-19 pandemic. In each market, the team channeled their efforts into the core product at the onset of the crisis, adjusting to different pressures and restrictions.
“We’ve been in countries where you’ve seen a significant impact, such as the UK and US. On the other hand, we have Canada and Australia, which have been in a better place, but still the measures were very strict or even stricter than the US or UK. Then we had India, which had been in a very strict lockdown for three weeks,” Caimacan explained.
“We very clearly defined who was focusing on what. The biggest part of the business, and I’m talking cross-functional teams, had to focus and make sure the core of the business was up and running, while still working with a smaller, agile team using different partners in a smarter way to work on innovation.”
The Tata Consumer Products business had to consider the context in different markets and the evolving trends, as well as the different measures being taken to adapt to the crisis.
“We saw the US evolving differently. Our business in the US is structured differently to other markets. We have a quite big out of home [consumption] business there, which we could expect would be significantly impacted,” she explained.
“In India the business was significantly impacted because you have big out of home [consumption], the factory has been closed, so you need to adjust as a business.”
In the UK, the experience was different. Tata’s tea brands Tetley and Teapigs were in high demand, but the challenge was not having the capability in the factory to experiment on new products. This is why, Caimacan argued, when it comes to devising strategies for different markets during a crisis “one size doesn’t fit all”.
Think ‘future core’
However, when it comes to innovation there is a recipe for success that appears to work.
Caimacan advises brands to adopt a 70/20/10 model. With this approach, 70% of resources and energy are focused on the core of the business and driving consistent growth. Then 20% is used to fuel projects adjacent to the core business or ‘future core’ and 10% of resources are saved for transformational innovation.
She advises brands to think about innovation that will drive business transformation in one, two or five years’ time, and once these innovations become a consistent part of the business they form the “new core”. Caimacan describes it as like the circles that emanate outwards when you throw a stone into water.
“Future core is the closer extension of a portfolio, which enables the business to make a step, not a big one that will leave the core of the business completely uncovered and unsupported,” she explained.
“It’s important to keep the core of the business in a healthy position, do whatever needs to be done to keep it relevant and deliver continuously the benefits people are looking for. Extend the business in closer to home segments, but also target disruptive innovations.”
That being said, Caimacan believes brands need to get into the transformation part of their work faster and have the courage to embed these innovations into their portfolio.
Being ready to embrace and engage with failure is essential to making this a reality.
“I come from a background where failure was not accepted very often and failure means failure for you as a person in most of cases. That’s a big mindset change, which most of us need to embrace,” she stated.
“That was something in many companies some time back that was not acceptable, simply because usually it was failure at a big scale. If you used to fail, you used to fail big.”
Betting big on innovation often means you cannot afford to fail, which curtails experimentation and encourages brands to opt for safer bets. However, this mindset is changing as companies become more open to failure and ready to learn from setbacks.
“Stop, understand what specifically were the main reasons driving that failure, what did you learn? What would you do differently?” she advised.
“The moment you know this, you know how to move forward and that’s exactly what’s happening for startups and that helps some of them to really perform. Start experimenting with these disruptive innovations on a smaller scale, allow them to evolve and grow into this space.”
From a personal perspective, Caimacan is convinced that coming from a marketing background helps her succeed in the innovation space. Prior to joining Tata, she spent 17 years at Unilever working across numerous marketing roles including as global brand development and innovation lead at Dove Skin and marketing strategy director for Europe.
“It’s good to have a marketing background because you can understand the market, you can understand people and drive insights. You also have the other side which is the business side, so you can size the opportunity,” Caimacan added.
“You can define is this something which is worth going further, worth the whole investment, which may be on a longer term.”
This ability to balance creativity with the commercial imperative will be essential if brands are to succeed in the next phase post-lockdown.