How to succeed at Innovation

Prepared for the FDIN Brand Innovation Seminar24th January 2008

Learnings from the Launch & Management of Kellogg’s Nutri-Grain Bars

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Kellogg’s Nutri-Grain developed out of a US product called Smart Start

The concept of a ‘bar to start your day with’ researched extremely well

But it took a long time to get the product right

1. Persistence: If you have a great idea keep working on the product or service until you can deliver the concept

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TOTAL 0yr - 5yr 6yr - 12yr 13yr - 20yr 21yr - 34yr 35yr - 54 yr 55 yr +Age

Per C

apita

Con

sum

ptio

n

1992 2002 Ave.per capita consumption

Per Capita Consumption by Age 1992 and 2002

Kellogg’s took a Consumption problem & turned it into a Strategic Opportunity

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Kellogg’s identified a social issue: Young people were increasingly likely to skip breakfast

Breakfast was still important to them

And they were still hungry without it

But hectic lifestyles meant they simply ran out of time in the morning

They ate on the way to work or at their desks

2. Define a clear Strategic Opportunity: What is the Target + their Problem?What Benefit / Solution do they need?

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For a time though, Kellogg’s were side-tracked on whether to launch Nutri-Grain as simply a tasty, yet healthy snack

But this had 2 disadvantages: Lack of differentiation vs.

other cereal bars Lack of Kellogg’s

credentials in snacking

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Kellogg’s ultimately made the right decision to position Nutri-Grain as ‘The best solution to a missed breakfast’

Relevant & Motivating Differentiated Uniquely deliverable by

Kellogg’s

3. Perfect your Strategy: Make it Relevant, Differentiated, Deliverable

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For Kellogg’s the ‘missed breakfast’ occasion was a way into a far larger prize: the snack category itself

Snacking identified as a key growth opportunity

Kellogg’s formed a Convenience Food division

Nutri-Grain Bars acted as a spearhead

Soon followed by other Kellogg’s cereal bars

4. Entering a new & highly competitive category you must carve out your own niche first to build credentials for later success

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The ‘Missed Breakfast’ strategy also contained an element of ‘Patterning’

With food & drink, patterning or linking to a specific occasion is important

Helps people establish routines

Kellogg’s exploited it again with the launch of Nutri-Grain Elevenses

5. For food & drink build some ‘Patterning’ around an Occasion into your Launch strategy

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Kellogg’s really understood their Target & communicated strongly to them

A morning food survey enabled them to understand the size & nature of the market they were entering

The Target was clearly defined:– 18-34 working adults, in urban areas,

hectic lives & frequent breakfast skippers

And Target insights generated Focused & humorous presentation

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‘Missed breakfast’ insights were the focus of all communications & Kellogg’s spent £8 million in first 2 years

6. Build fresh consumer insights into your communications & make sure theTarget sees them

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Out of home communications were key

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Kellogg’s dominated transport media including Taxis

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And Tubes

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And unusual media were also used

7. Communicate at Point of Need as well as Point of Purchase

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The launch had to deal with the ‘health issue’

The brand needed health credentials But making it sound too healthy would:– Put off the ‘Mainstream’ consumer

– Attract a very health conscious one, who would not appreciate the food

The solution was to use the name ‘Nutri-Grain’ to signal health

But to limit the healthy references elsewhere

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And also the Product perception issue

The soft product made people think it was stale

Foil wrap packaging although more expensive signalled freshness

Now Kellogg’s describe the food as ‘soft bake bars’, dropping the descriptor ‘Morning bars’ in 2005

So the Name was used to solve the ‘health’ issue whilst the Packaging worked to improve product perception

The rest of the elements of the Marketing Mix communicated the main positioning of ‘Best Solution to a Missed breakfast’

8. Give every element of the Marketing Mix a definite role to play

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Kellogg’s used their skills honed in grocery distribution to quickly build distribution in ‘Impulse’

Nutri-Grain had to be available where people were missing breakfast

Nutri-Grain Bars were launched in the Impulse sector in May 1997:– By August they had 74%

distribution here– Within a year they had 15,000

new distribution points

9. With a brand stretch make sure that distribution matches the new proposition

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Constant innovation is needed to maintain Nutri-Grain as a strong brand

After launch Kellogg’s developed the concept of an ‘Innovations Calendar’ – challenging themselves to deliver an innovation every 6 – 8 weeks

These included:– Specific health messages

such as ‘More Calcium than a quarter pint of milk’

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There have been many new variations

New flavours such as ‘Cherry’

New ingredients such as ‘Yoghurt’

New formats such as Nutri-Grain:– Twists– Minis– Chewy Bars– Yoghurty Bars

New occasions such as– Children’s lunchboxes– Elevenses

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And innovation continues today

As well as the original Nutri-Grain (now described as Soft Bake Bars) & Elevenses there are:– Nutri-Grain Oat-baked bars

– In November 2007 Kellogg’s announced new Nutri-Grain Soft Oaties

The positioning has evolved away from ‘Missed breakfast’ to an emphasis on taste backed by healthy ingredients

10. Use an Innovation Calendar for continuous innovation

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Recap of Learnings from the Launch & Management of Kellogg’s Nutri-Grain Bars

1. Persistence: To find a product to match a great idea2. Define a clear Strategic Opportunity3. Perfect your Strategy4. Carve your own niche when entering a new category5. For food & drink launch with some ‘Patterning’6. Communicate strongly with fresh consumer insights7. Communicate at Point of Need as well as POP8. Give everything within the mix a defined role9. With brand stretch get the distribution right10. Use an Innovation Calendar for continuous innovation