Marketing Week: Heinz is planning to double the number of new products and variants they develop over the next two years. Can you explain the reasons behind the move?
Giles Jepson: Innovation is incredibly important to us and I think it will become even more important in the months to come. Our approach is about making sure we’re offering value at all ends of the price ladder, building out category segments and investing in packaging innovation that brings consumer benefits like what we did with Snap Pots. It’s an incredibly challenging environment both internally and externally and what we’re doing is all very much a work in progress.
MW: The company says it has underleveraged its brands in the past. What does this mean and how are trying to change this through NPD?
GJ: The interesting thing about Heinz is we have a number of propositions within this business that have historically been within the single categories such as our Heinz Big range. We’re really looking to see how do we start building out these propositions into platforms that can really give us some strong growth legs. We have incredibly powerful brands that are strong in certain categories but not so in others. There have been big shifts in recent years around modernity and food goodness that we have to build on as a business. Fundamentally, it’s about driving sustainable growth.
This is not about throwing things at the wall. This has to be about how you really use the Heinz brand in the right way. We want to stretch our brands into areas that enable us to get to that sustained level.
MW: Can you give any examples of how this ambition has been realised to date?
GJ: Lol, our soft drink range is a great example of this growing focus on innovation and is interesting because we’re viewing it as a test. It’s a drink targeting 10 to 13 year-olds who are looking for a great tasting soft drink, but mum can feel good about it because it’s one of their five fruit a day. It’s a completely different model for us and is something that sits outside our categories. Lol is an interesting way for us to test what’s out there. We know the drink is a compelling proposition and it’s about experimentation to see where we can go as a business.
Another great example is the company extending its Big range into Ready made meals later this month. Up until now, the Big brand has sat within the soup category but fundamentally that proposition of chunky filling meals targeted at 20 to 30 year old males is as relevant with frozen as it is in soup. It’s these spaces between categories that represent the biggest areas for growth for our business.
MW: How is this innovation drive being supported internally by the company?
GJ: Twelve months ago the Explore Group was set up. The group’s remit was very much about identifying and developing new growth legs behind the UK business outside its current categories. Lol is the first example coming out of that group and there are two or three products that the group will be bringing to market over the next 12 months. People can come into this business and be incredibly entrepreneurial.
As part of capitalising on that culture we’re investing a lot of money in our training and leadership programmes. Two years ago we set up a scheme called ‘Game Changing Leadership’, which is about investing in the top thousand managers in this business and really trying to unlock everybody’s potential to make a difference and feel confident about making a difference. I think within the wider grocery industry its incumbent on companies like Heinz to create inspiring environments where people feel they can make a difference.
MW: What areas for growth have you already identified?
GJ: The really big ideas are the spaces between the categories for us. Also, there is a merging of food and retail service channels that we’re looking at closely. The way that Tesco and Sainsbury’s have their cafes or convenience stores selling hot food on the go is interesting. There’s a blurring of those channels and that provides opportunity for innovation. It’s an area we’re giving a lot of thought to and asking ourselves what can we bring of value to the market in those areas.
MW: Heinz is often referred to as one of the great examples for how to get F-commerce right. Do you see selling on Facebook as a big part of the company’s advertising mix moving forward?
GJ: I think we’ve got to be a bit careful of Facebook. The F-Commerce work we did was never about selling directly to consumers and I can never see it being about this for us. In this industry that’s not what using Facebook should be about. It’s about selling a very small number of products to our biggest fans and using the platform to start generating word of mouth and rewarding our most loyal consumers with added value.
MW: The business has experimented with mobile marketing in the past but are there plans to make it a bigger part of your advertising mix?
GJ: We’re still trying to figure out mobile. Our approach to it so far has almost been about doing small experiments and seeing what works and what doesn’t work on the platform. As it stands to day I don’t think there’s any big, definitive strategic view on mobile in our marketing mix. However, we are looking at all those types of media and are running experiments to see what we can learn quickly as well as fail cheaply if needs be. Arguably, the Facebook work we’ve done has been a great example of that and I think going forward we need to and we will be applying that approach to mobile.
MW: Consumers are attracted to canned foods for a number of reasons but it’s fair to say that health has not traditionally been one of them. How is the business trying to change this?
GJ: I think our ‘One of Five a Day’ campaign from last year was a big step forward for the business and one we’ve followed up with our Five Beanz range as well on soup. Heinz is the original pure food company and there are an awful lot of great stories within our portfolio to tell around health. Going forward, this has to be a major plank of this company because the quality of our products, their taste and their health benefits will play a big part in what we communicate to consumers looking forward.