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How 100-year-old CPG brands are tackling innovation

With disruption on the horizons of most traditional industries today, it is no surprise that innovation is one thing which is constantly discussed by many consumer packaged goods (CPG) companies today. For companies such as Kimberly Clark and Abbott which have been around for over a century, innovation is more than a necessity – it is part of their DNA.

However, for many CPG companies, innovation has been restricted to mainly production development, said Gaurav Gupta (pictured centre), marketing director, Kimberly Clark Thailand at the recent Adobe Symposium at Marina Bay Sands Singapore. He explained that in the past decade, the changes in the CPG segment were mainly in the consumer journey – propelled by e-commerce.

“It’s no longer just about how products are assembled on the assembly line, but rather how to improve the online experience of the consumer,” Gupta said. That being said, not every industry needs to be at the front and centre of cutting edge of innovation. Instead, there needs to be a focus on being customer-centric first.

“Looking at the CPG industry, we don’t need to compete with the likes of Uber and Grab in terms of the [adoption of] technology and development. But we need to be focused on the kind of experience consumers want,” Gupta explained.

“We just need to be the best in the competitive set [we are in] and I think that is sometimes very liberating for a company which is beginning its transformation journey a little bit later,” he said.

It allows us to focus on being customer-centric as opposed to chasing the latest shiny new thing.

Also weighing in was Davin Lodge (pictured right), regional head of IT, Abbott, who added that in the past couple of years, Abbott had spent around US$6 billion on R&D. This culminated in 65 R&D sites globally across 21 countries.

To drive a culture of innovation in the company, both Gupta and Lodge agreed that it was all about creating a “risk-acceptance” culture which is respectful of failure. For Gupta, this means creating a “safety-net” allows people to take risks, fail and not be berated for their failures.

Funding innovation

Meanwhile, Lodge is of the view that innovation also needs to be rewarded when it happens, and it is also important to create a sense of urgency around consumer needs. “Establish an environment and platforms for innovation, processes and people – and fund it too,” he added.

When asked about tips on getting funding, Lodge explained the need for going on an education campaign involving major executives from different divisions to help them understand how they too can benefit from the funding. Lodge said:

Help them understand where the world is, what the opportunity is and why they need start now.

Once these stakeholders get on board, the value proposition and business cases would be more easily understood as the link between opportunity and requirement is made clearer.

Showing ROI is also key in getting the necessary budget for innovation, Gupta said. In doing so, the right questions need to be asked in order to ensure that the ROI is made visible through data and the success platforms being used by marketers.

Marketers versus technologists: Who ‘owns’ innovation?

For innovation to be effective, both marketing and technology have to work hand in hand, Gupta said. What marketing brings to the table in this case is the understanding of the consumer as well as the consumer experience – as well as how to delight customers. Meanwhile, technology players bring a deeper understanding of the platforms and how to leverage it.

“To be honest, technological developments have reached a point where there are difficulties in keeping up with every intricacy or change which happens,” Gupta explained.

Innovation, Lodge added, should also not just be one person’s job.

Everyone in the organisation should be focusing on innovation, no one person should own it.

“For example, in the backend, one person could be driving innovation on improving efficiency, but it’s important to involve partners as well. Involve your business partners in the chain as well to drive innovation,” Lodge said.

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