Us Breakthrough Innovation Report 2016 Digital PDF

NIELSEN
BREAKTHROUGH
INNOVATION
REPORT
JUNE 2016
2016 U.S. EDITION

WELCOME
2 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

LETTER FROM
THE AUTHORS
WELCOME TO THE 2016 NIELSEN BREAKTHROUGH INNOVATION
Report, and congratulations to our 18 winners! This is our biggest class
of winners ever, and it features two start-up companies—a Breakthrough
first. The report celebrates the high achievements of all of our winners
and shares insights from their extraordinary accomplishments, most
notably in our largest-ever collection of case study Spotlights, which
showcase Breakthrough Innovation in action. TADDY HALL
Principal, The Cambridge Group;
As we reflect on the success drivers of the 92 Breakthrough Winners Leader, Nielsen Breakthrough
across the five years of our study project, leadership has played a Innovation Project; Author
consistent, decisive role. Given its pressing importance, for 2016
we have chosen to elevate and dedicate this report to breakthrough
leadership.
Based on our many client conversations, we are confident that few will
dispute we are managing through an era of unprecedented change and
challenge. There is less room for missteps—and a greater need for
leadership.
The largest consumer packaged goods (CPG) firms control valuable

global capabilities that can catalyze innovation and organizational
transformation. But those very same capabilities can be misdirected
ROB WENGEL
to strategies designed to fight yesterday’s war. Leadership is what will
Principal & Leader, Strategic
make the difference. Leadership is what is necessary to ensure that
Innovation, The Cambridge
today’s flagship brands do not become tomorrow’s ghost ship brands—
Group; Co-Author
drifting relics—from the perspective of consumers, shareholders and
the best talent.
The challenge is, without a doubt, surmountable. We have never had the
benefit of better innovation knowledge or better innovation tools than
we do today, and we need to put them all to work—right now.
Though the challenges of the present are largely artifacts of inheritance,

we are the ones who define the future course. There is a way forward
to a profitable, albeit very different, future. These are exciting times, so
let’s get to it.
EDDIE YOON
Principal, The Cambridge Group;
Co-Author
Copyright ©2016 The Nielsen Company 3

CONGRATULATIONS
NIELSEN
2016
BREAKTHROUGH INNOVATION
WINNERS
SKINNYPOP® BAI CHILI’S® AT HOME

POPCORN PG 44
PG 80
MILK-BONE® NASACORT® CHOBANI FLIPTM

BRUSHING CHEWS® ALLERGY 24HR PG 56
PG 62 PG 67
ARM & HAMMERTM SALLY HANSEN® DOLE®

CLUMP & SEALTM MIRACLE GELTM CHOPPED
PG 40 PG 76 SALAD KITS
PG 59
= SEE WINNER SPOTLIGHTS

CONGRATULATIONS
CHEEZ-IT® BUTTERFINGER® BREYERS® GELATO

GROOVESTM PEANUT BUTTER CUPS INDULGENCESTM
PG 53 PG 48
THE MAKING OF WINNERS:

NIELSEN BREAKTHROUGH
INNOVATION
CRITERIA
OSCAR MAYER GAIN® FLINGS®
P3 DISTINCTIVENESS
PG 71 Deliver a new value proposition to the
market. Ingredient reformulations,
repackaging, size changes, repositioning,
and other minor refinements to existing
brands are excluded.
RELEVANCE
Generate a minimum of $50 million in
NEXIUM® 24HR GIOVANNI RANA U.S. sales during first year of national
distribution.
ENDURANCE
Achieve at least 90% of first year sales
in year two. This measure confirms a
sustained level of consumer demand
while allowing for some drop in revenue
during the transition from trial to
adoption.
GLADE® WAX MELTS BEN & JERRY’S®
AND WARMERS CORES
= SEE WINNER SPOTLIGHTS

Welcome to the 2016 Nielsen Breakthrough Innovation Report and this year’s theme:
BREAKTHROUGH LEADERSHIP
WE MUST BEAR IN MIND, THEN, THAT THERE IS NOTHING MORE

DIFFICULT AND DANGEROUS, OR MORE DOUBTFUL OF SUCCESS,
THAN AN ATTEMPT TO INTRODUCE A NEW ORDER OF THINGS. FOR
THE INNOVATOR HAS FOR ENEMIES ALL THOSE WHO DERIVED
ADVANTAGES FROM THE OLD ORDER OF THINGS, WHILST THOSE
WHO EXPECT TO BE BENEFITED BY THE NEW INSTITUTIONS WILL BE
BUT LUKEWARM DEFENDERS.
— NICCOLÒ MACHIAVELLI, THE PRINCE, 1513
Framing the Challenge: Own Your Future
I n last year’s edition of the Nielsen Breakthrough

Innovation Report, we noted that “much better innovation
outcomes are a matter of choice.” That statement remains
Let’s be honest: the CPG landscape of 2030 will differ
profoundly from the marketplace of 2000. And to
paraphrase tech pioneer Alan Kay, The best way to predict
true, but the stakes have grown higher. the future is to create it.1
Innovation may not feel like an existential mandate today, Nobody is better positioned to create the food and
because of the share of wallet commanded by name-brand nutrition companies of 2030 than today’s leaders, and
products and the comparatively small percentage of sales here’s the choice and challenge, clean and unvarnished:
generated by innovation. But if we fail to remake ourselves
in line with emerging consumer tastes, technological WILL WE LEVERAGE OUR CURRENT CAPABILITIES
realities and business models of the 21st century, we TO CREATE THE FUTURE? OR WILL WE LET
will see growth stall and margins erode, we will lose
OUR ATTACHMENTS TO THE ESTABLISHED
the battle for world-class talent, and our innovation
ORDER IMPEDE OUR ABILITY TO LEAD THE
capability, already fragile, will collapse. Our market
cap will decline until we lose our independence to TRANSFORMATION?
consolidation and industry transformation. We will join
the ranks of the once-great companies that simply failed to This is where we need to hear Machiavelli’s caution and
change fast enough. channel our inner Alan Kay. We can do this.

THE BREAKTHROUGH INNOVATION PROJECT
If you’re new to the Breakthrough community, welcome! This is our As in the past, this year’s winners and their Spotlight case studies
fifth edition of the U.S. report, and while each report celebrates a make up the centerpiece of the report. We now have a published
new class of Breakthrough Winners and shares perspectives on fresh case library of 32 U.S. winner Spotlights and a growing body of
innovation topics, there is continuity to the series. If you find value in international Spotlights as well. For those looking for an immersion
these pages, we encourage you to visit Nielsen.com/Breakthrough, experience in Jobs Theory and Demand Driven Innovation—the how-
where we’ve made available past reports, the Spotlight case study to of Breakthrough Innovation—pick any 10 Spotlights, and you’re off
library, international editions of Breakthrough, discussions of Jobs to a great start. We promise you’ll be surprised by what you learn and
Theory, detail on the Demand Driven Innovation system, and other find valuable application for the insights you create for yourself.
innovation materials and resources.
BREAKTHROUGH IN
PERSPECTIVE
Many successful innovations that do not meet the
Breakthrough criteria nonetheless play a critical role in
A WORD ON STYLE—SUITED
TO ITS SUBJECT
the life and growth of brands. In fact, the vast majority
of innovation activity comprises the closer-in launches
that keep brands fresh, consumers engaged and retail
customers supportive. “Sustaining innovation,” as the We like to think the Breakthrough Innovation Project is something
term itself suggests, is a requirement for survival. You unique. And if form follows function (which we have always believed),
need it every year—year in, year out. we like to think the style of the report is unique, too. That doesn’t
mean we have entirely abandoned Aristotle’s dictum “A whole is what
But as any successful sailor will attest, you never has a beginning and middle and end.” It does, however, mean we
beat the fleet by following it. The difference makers recognize that, as with many subjects, there is more than one way of
are Breakthroughs—products that expand or create looking at things, and more than one way of writing about things.
categories, that over the years add hundreds of millions
of dollars to the bottom line and billions to a company’s Too many business books—you know which they are—argue for “the
market capitalization. Another way of putting it is that three keys,” “the four imperatives,” “the five traits” of whatever it is.
sustaining innovation is fine for achieving year-to-year And each year, a new crop comes along with completely different
performance and to help prevent falling behind the fleet solutions to the same problem, each soberly presented as the answer.
in the short term. But without Breakthroughs, your You may even have noticed, as we have, how strikingly similar their
ability to thrive over the long term will be very much in claims are to breezily aspirational magazine covers.
doubt.
There is rarely just one answer in the analysis of ever-changing
The mark of innovation mastery is a balanced phenomena, although there is often just one problem. So you will find
innovation portfolio. In recognition of this broader here a report of many different sections, with many different ways of
management challenge, we have added a special section attacking our subject. The one problem is achieving Breakthrough
on this topic at the end of this year’s report. Innovation. Different readers will respond differently to the different
pieces of the report—allowing us to hope there is something here for
But Breakthrough is the big one—and the easiest to slip everyone.
out of a company’s portfolio. It is the kind of innovation
most thoroughly at risk, and therefore the kind of
innovation most in need of recognition, of celebration,
of study and support. It is for this reason that the
Breakthrough Innovation Report exists.

N E W G R OW T H O R D E R :
CPG ON THE CUSP OF TRANSFORMATION
OBJECTS IN THE REARVIEW MIRROR ARE FARTHER AWAY THAN THEY APPEAR
In 2015, the top 25 largest food and beverage companies generated LARGE U.S. MANUFACTURERS
45% of category sales in the U.S. but drove only 3% of the total ARE DRIVING SALES, BUT NOT
category growth from 2011 to 2015 (roughly $1 billion in sales out CATEGORY GROWTH
of $35 billion in category growth) and grew at a compound annual
% OF CATEGORY GROWTH
growth rate of 0.1%.2
25 Largest Food
and Beverage
These are striking figures, and the wave of change is far from Manufacturers
cresting.
Our belief is that there will be more change in CPG in the next five
years than there was in the last 50.
This transition is not going to be easy. For many decades, the

CPG world has enjoyed stately product cycles, brand life spans $35B
typically measured in decades, robust barriers to entry, and few
game-changing new entrants. Market share was contested within
well-established category boundaries against a fairly stable set of
rivals. Unlike technology leaders, CPG executives could sleep well
at night—free of worries about becoming the next Blockbuster,
because there was no Netflix ripping around the corner. All Other Manufacturers
& Retailers
While running a CPG company wasn’t easy, the dynamics were familiar:
1. CPG planning cycles were, well, and fall like clockwork. Media plans to media. And e-commerce was a
cyclical. They tended to recur with a were bought and paid for months in minuscule sideshow to the dot-com
reasonable degree of regularity and advance. circus, not the main event.
familiarity. Critical resource allocations 2. Consumer empathy was natural. 4. Data—though always important—
and decision making were akin to Boomer managers could succeed by had the comfort of being “small”
playing chess by mail. Long-range serving Boomer consumers. and generally historical in nature.
plans of three years or more were a 3. Channels—in both media and retail— Amounts increased steadily but not
relevant exercise. Annual operating were few, analog and essentially one- exponentially; furthermore, the sleep-
plans could be developed 12 to 18 way. It wasn’t until the 21st century depriving question of “Am I even
months in advance. Retail resets could that interactive, digital, social, mobile looking at the right data?” still lurked
be done twice a year in the spring and addressable became prefixes in the fairly distant future.
This was the world of the 20th century—the courtly era of CPG. And doesn’t that feel like ancient history now? Not only are the times
a-changin’, but as the aforementioned growth statistics suggest, they are changing faster than we might like to think.

OBJECTS IN THE WINDSHIELD ARE CLOSER THAN THEY APPEAR
So about this growth: Who did drive it if big-CPG didn’t?

Private label drove 23% of the growth ($8 billion) and grew at a 2.6% compound annual growth rate.
Mid-tier companies ranking 26–100 in sales drove 25% of the growth and grew at a compound annual
growth rate of 3.2%.
And in a long and mighty tail, 20,000 companies below the top 100 drove 49% of all category growth
($17 billion), with a compound annual growth rate of 6.3%.
SMALL MANUFACTURERS ARE GROWING CATEGORIES

(AND THEIR OWN BUSINESSES)
SMALL MANUFACTURERS
49% 6%
% Category Growth
Rate of Annual Growth

(TOP 101 & BELOW)
MID-TIER MANUFACTURERS
25% (TOP 26-100)
3%
RETAILERS
23% (VIA PRIVATE LABEL)
3%
LARGE MANUFACTURERS
3% (TOP 1-25)
0%
Seeing the long-tail players driving nearly half of the growth, we explored what they’re doing differently:
1. They play “speed chess” by moving to precision, mitigating the traditional or distribution, so they are able to
much faster than traditional planning scale buying advantages of large firms. operate without the pressure to utilize
cycles. Breakthrough Winner Chobani, Most smaller firms actively embrace or finance fixed assets.
for example, conceived, developed and the cost-effectiveness of digital, 5. They’re “owner-operators” who
shipped a successful new offering in unshackled from the legacy analog immerse themselves in the context
six weeks. Words are revealing as well: traditions and processes. of the consumer rather than rely
Traditional firms speak of planning 3. They’re far more concerned with being on the efficiencies of reports and
“cycles,” connoting continuity. Newer, authentic and relevant than huge. subordinates to filter and organize
smaller firms are much more likely to 4. They disrupt the scale economics of the outside world’s messiness. Like
speak of “iterations,” in which what is large firms’ integrated operations the best restaurateurs, they sweat the
expected is something different. with the lean, flexible economics details that create great experiences.
2. Digital, addressable, fragmented of modular operations. They don’t
media shift the currency from tonnage have the investments in production

THE BIG
SHIFT:
AN OVERARCHING
CHALLENGE FOR
E S TA B L I S H E D F I R M S
T oday, major CPG firms are structured to play defense—with large balance
sheets, extensive distribution networks, extended supply chains and
hierarchical decision-making structures. Fueling much of the resource allocation and
decision making are innovation incentives that encourage quick-hit small ball in support
of large, existing brands and fixed assets. Even the signature job function, brand manager,
suggests stewardship and operational focus, rather than growth and innovation.
Leading 20th-century CPG firms that not only survive but thrive in the balance of the 21st
century will make major reconfigurations to each of the three core components of their
capabilities, shifting their competitive stance to offense, even as they continue to play smart
defense. For each capability component, we highlight three elements that stand out.3 You’ll no doubt
want to construct your own, prioritized list.
CAPABILITIES
RESOURCES PROCESSES PRIORITIES

> RESOURCES
PRIMARILY ASSETS THAT CAN BE BOUGHT, SOLD, HIRED OR FIRED, INCLUDING INTANGIBLES SUCH AS BRANDS
AND INTELLECTUAL PROPERTY
• Leading firms will look less like monolithic fortresses and more like collaborative ecosystems. Value will be more a function of how
they interact with critical partners than a function of what they directly own or control.
• Investments that increase flexibility will be valued equally, if not more than, investments in efficiency. Fixed, nonflexible assets will
be different and almost certainly fewer. Productive assets of the future will be smart, connected and flexible.
• Leadership requirements will shift. In times of rapid change, leaders who are better experimenters, listeners and collaborators
will be more valuable than vision casters or financial engineers. They will return to the entrepreneurial habits that made their
companies great at inception. There was a day when even the largest firm was a scrappy start-up. Just as global experience is a
prerequisite to be CEO, leaders will need bona fide innovation experience to get the top job.
> PROCESSES
THE WAYS IN WHICH AN ENTITY’S RESOURCES INTERACT TO CREATE CUSTOMERS AND SUSTAIN
THE ENTERPRISE
• Firms that want discontinuous, category-creating, breakthrough innovation will build processes dedicated to those outcomes
(offense). They will maintain a separate innovation process for sustaining the current business (defense).
• Firms will innovate around experiences more than products, leading to innovation processes looking very different than they do
today. Bellisio Foods’ director of R&D, Kimberly Mikaliunas, illustrates the point with the Chili’s at Home launch: “This country
recently went through a culinary renaissance—food channels, food magazines, social-media clips. Emphasis shifted from food
to the dining experience. Our winning launch brought new, younger and lapsed users into the frozen category to try the Chili’s
experience. We also offered loyal restaurant patrons a new, at-home way to enjoy the Chili’s experience.”
• Talent recruiting and development processes will evolve to enable firms to compete for the best and brightest minds, because
technology and innovation will be integral to how successful companies operate.
> PRIORITIES
FORMAL AND INFORMAL GUARDRAILS, INCLUDING INCENTIVE STRUCTURES, MARGIN REQUIREMENTS,
RESOURCE ALLOCATION RULES, HIRING AND PROMOTION CRITERIA AND COMMITMENTS TO
SHAREHOLDERS
• Innovation failure will be valued as providing essential learning. Much of what passes for
“embracing risk” today is lip service unsupported by organizational reward structures or
METRICS MATTER:
cultures. Ben & Jerry’s actually launched a version of their Breakthrough-winning “Cores”
Leading firms will measure
ice cream in 2002, but it failed to gain traction. However, the lessons learned and applied
share of growth (offense) in
paved the way for this year’s Breakthrough Winner.
addition to share of market
(defense). They will abandon • Leaders will protect the “explorers” and ensure that the capabilities that sustain the
misguided activity metrics current business don’t kill the projects that will create the future business. This entails
such as “percentage of sales pressing the frontiers of knowledge and embracing the unknown, unfamiliar and
from new products,” which uncertain.
tends to miscategorize (and • Leaders will ensure that balanced innovation portfolios are real—recognizing that absent
reward) waste as if it were senior involvement, efforts steadily shift to the close-in, familiar, quick-hit projects.
innovation.

CHANGING THE WAY WE
THINK
AMONG THE FEW UNDERDISCUSSED TALENTS OF THE LEGENDARY STEVE JOBS
was his ability to be at once passionately persistent and open to changing his mind
almost instantaneously when presented with compelling, alternative arguments. This
quality may well be the one that CPG executives need to channel most as they push
into a future that is far more discontinuous than it is continuous with the familiar
forces and flows of the 20th century.
In the spirit in which many organizations have embraced “zero-based budgeting,”

we believe that the firms that emerge as the leaders of the 21st century will apply
a corresponding blank-sheet approach to business models, organizational structures,
innovation, research, procurement, external collaboration and so on. The “consumer packaged
goods” industry—a moniker that already carries a quaint ring—will grow increasingly anachronistic as it
describes less and less of what industry leaders actually do to serve consumers and generate returns. Successful
firms of the future will master consumer experiences, not just consumer goods.
Seeing a World of Many Possibilities
In moments of discontinuous change, Last year we related the story of experiences. This is thinking like a
the “expert’s mind” can become a the U.S. auto industry executives successful innovator!
liability, because expertise is rooted who rejected and denied Toyota’s
in what worked in the past, which can manufacturing superiority until denial We may be navigating an unfamiliar,
become baggage in the context of led to an existential crisis. It took rapidly changing marketplace, but we
creating the future. The “beginner’s about a decade. CPG leaders might can do so with a robust understanding
mind,” in which there are many have a decade as well. Maybe more or of what causes successful innovation.
possibilities and few certainties, will maybe less, but the clock is ticking. This again, however, requires a
prove to be the smart one. dramatic change of mental models.
The good news that runs throughout
Arguably the biggest obstacles faced this report and fuels the Breakthrough For leaders who view the rapidly
by established CPG companies are findings is Jobs Theory: the reality transforming marketplace as an
legacy assets—yes, the “fixed” ones that innovation is a function neither opportunity rather than a threat, the
for sure, but also the entrenched of genius nor luck. As we discuss future is bright.
beliefs and knowledge assets. It is later in this report (and discussed
this second category of assets that in greater detail in the 2015 The body of this report, as well as the
gives us not only our sense for the Breakthrough Innovation Report), unprecedented collection of 11 world-
businesses we’re in but also our sense Jobs Theory encourages us to think of class Spotlight case studies, provides
of self.4 This, ultimately, is why change consumer products not as a sum of input and ideas for mastering the “big
in business is so hard. attributes but as services that enable shift” posed by the discontinuous 21st
desired progress and create valued century.

LEARNING FROM LEADERS:

rom the first presentation of the Demand Driven Innovation system in 2013,
leadership played an integral role; it was instrumental in every single Breakthrough
success we studied.5 Frankly, we struggled to go deep on the topic—one so vast
that discussions too often devolve into platitudes and inactionable exhortation.
However, that it’s a tough topic to address succinctly is a lousy reason to ignore it,
especially when leadership holds the key to future success.
As noted already, the standout CEOs of the future will chart a dramatically different
course than their predecessors. Stewards need not apply. We are in need of leaders
who have a high level of comfort with upheaval and transformation, and we should
look for that experience in their credentials.
We also need a generation of chief executives willing to roll up their sleeves and
dirty their hands in the hard work of innovation. According to a 2013 PwC survey of
CEOs, 37%—up from only 12% in 2010—saw leading innovation as their personal
responsibility. Admittedly, 37% feels awfully low, but the steep trajectory suggests that
more and more CEOs are waking to the reality that this is not a challenge to delegate.
DEMAND DRIVEN INNOVATION SYSTEM
DEMAND DRIVEN DEMAND DRIVEN DEMAND DRIVEN

INSIGHT DEVELOPMENT ACTIVATION
BREAKTHROUGH
LEADERSHIP
LESSONS LEARNED REAL-TIME PERFORMANCE

AND APPLIED MANAGEMENT

There exists, unofficially, a Breakthrough Innovation Hall of Fame, and its ranks comprise those elite few who
have proven themselves to be not only enduring winners, but true industry leaders as well. They have shared their
successes—and many scars—in the interest of advancing the state of knowledge and practice. To prepare this
year’s central theme, breakthrough leadership, we enlisted a few of these all-stars to help breathe both wisdom and
actionability into our discussion.
Barry Calpino helped SC Johnson Pat McGauley created the first Geoff Tanner took over innovation
launch Ziploc food storage dedicated innovation department at in pet at Del Monte at a time when
containers, Kellogg’s Special K Anheuser-Busch. During his 12 years there was a self-admitted absence of
protein line (which pioneered the of leading the innovation effort, Pat consumer-driven innovation at the
brand’s successful presence in the and his team developed over 150 new company. Geoff led the development
vitamins and supplements aisle), products and packages, including and launch of a 2013 Breakthrough
and Wrigley Extra Dessert Delights Bud Light Platinum, Chelada, Shock Winner, Milo’s Kitchen dog treats,
before becoming the vice president Top and the aluminum bottle along Del Monte’s first new brand in over a
of Breakthrough Innovation at Kraft, with four Breakthrough Winners, century. After the division was spun
where he played an instrumental including the transformational off as independent Big Heart Pet,
role in six Breakthrough Winners. Bud Light Lime and Lime-a-Rita Geoff oversaw the development of
Barry is currently a part-time adjunct family. Pat is now consulting for AB two additional Breakthrough Winners
professor at Kellogg, teaching InBev and a founding partner of (Meow Mix Tender Centers in 2014
innovation, and also holds one of the the innovation consulting firm The and Milk-Bone Brushing Chews
coolest job titles in the industry: vice Startup Within. in 2016) and developed a robust
president, Innovation Hothouse, at Demand Driven Innovation system
Mondelez. at Big Heart (recently acquired by
the J.M. Smucker Company). Geoff is
now senior vice president of growth
and innovation at Smucker.

WHEN WE LOOK ACROSS THESE THREE LEADERS,
A NUMBER OF SIMILARITIES EMERGE. HERE ARE 15:
Promote consumer empathy

• They put consumer demand at the center of their innovation efforts.
• They don’t just champion empathy; they practice it by routinely immersing themselves in the circumstances of
consumers.
• They seek surprises.
• They “benchmark outside of category,” constantly seeking inspiration and opportunity, not only from outside the
company but from outside the CPG industry as well.
Fit the process to the objective

• They apply comprehensive measurement, testing, screening and forecasting protocols in the interest of making
innovations bigger and better.
• They modify stage gate processes as necessary, but they do not compromise proven innovation principles.
• They prototype and experiment with consumers in-market relentlessly.
Fail valuably and learn systematically

• They study past successes and failures rigorously to learn and improve with every initiative.
• They exercise a healthy paranoia, manifest in a “nothing is impossible” attitude toward risks and opportunities.
• They value failure. This is a huge difference from the commonplace and often empty appeals for “risk tolerance” and
“embracing failure.” Breakthrough leaders realize that if you’re not failing, then you’re not trying hard enough nor
learning enough to succeed greatly.
• They persevere, persevere, persevere.
Embrace a culture of transparency, collaboration and humility

• They keep their CEOs actively engaged in—not merely aware of—their innovation activities.
• They think cross-functionally and are relentless integrators and collaborators.
• They display no egos. They own the blame and distribute the glory.
• They have a sense of humor. You can’t be in this game if you can’t laugh easily and often—
especially at yourself.
We are indebted to Barry, Pat and Geoff for their contributions to this report, past reports, numerous Breakthrough Spotlights,
conference presentations, webinars and other special events. We are also grateful for their friendship.

BREAKTHROUGH
Readers will probably read nothing of a “wow, I never would have thought of that!” nature in the pages that follow.
Interpret that as a double-edged sword:
• On the one hand, there is no magic required, no pixie dust to sprinkle, no special software to install, no required
research methodology. That’s good.
• On the other hand, this is bloody hard work. Often unappreciated with few internal allies and many naysayers and
contrarians (remember what Machiavelli said), innovation leaders should not expect to win popularity contests, even
as they oftentimes provide the lifeblood of the company.
As Geoff Tanner notes, “At Big Heart Pet, by far the

majority of our growth is coming from innovation and THE QUESTIONS WE’VE BEEN PURSUING
has been for several years.” Moreover, in the short span ARE FOCUSED: WHAT ARE BREAKTHROUGH
of a couple of years, Geoff and his team transformed LEADERS DOING DIFFERENTLY FROM
innovation at Big Heart from “something that other THEIR PEERS TO ENABLE SUCCESSFUL
companies do” to a core competency and an engine INNOVATION? AND SPECIFICALLY,
for growth. At the same time, Geoff will assure you that
leading this kind of transformation is not for the faint of What are the implications for C-suite executives?
heart.
What are the implications for senior managers with
innovation mandates?
Focusing on leadership in the fifth year of Breakthrough
What needs to change in terms of mental models and
is both fitting and telling: It is fitting to cap five years operational processes in order to make innovation
with such an important theme. It is telling because of the consistently successful?
considerable time it took us to understand, synthesize
and validate exactly what needs to be said—and more
importantly changed—regarding leadership’s role in
driving successful innovation.
The following perspectives from serially successful in the context of innovation has been at arm’s length:
innovators not only reinforce one another, they also align extolling its importance and convening periodic reviews to
powerfully with Nielsen Innovation Practice and Cambridge check status. A much more hands-on role is required. For
Group client engagements across 100+ projects in the past many accomplished leaders, this will feel fundamentally
two years. We encourage folks to give a close read to what unnatural, because they have never actually managed
this power trio has to share, because it offers a prescient an innovation initiative with end-to-end responsibility.
synthesis of a much broader body of client work and Nonetheless, it needs to happen. The stakes are high, and
research. time is short.
As we’ve already noted, Breakthrough Leadership isn’t easy.

For many organizations the historic role of C-suite leaders

BREAKTHROUGH LEADERSHIP:

WITH THOSE ENCOURAGING WORDS, LET’S LEARN FROM A
F E W O F T H E V E R Y B E S T.
LESSON 1: LEADERS ROLL UP THEIR SLEEVES AND GET DIRTY
“In 2008 and again in 2009, we were one of the very worst innovation performers
in the industry,” recalls Barry Calpino, former Kraft vice president of Breakthrough
Innovation.6 “We publicly acknowledged our status as ‘worst’ and simultaneously
committed ourselves to becoming first. President Tony Vernon didn’t just proclaim
and delegate; he showed up, literally. We had quarterly pipeline review meetings,
which were cross-functional leadership jam sessions in which we hashed out issues
related to priority projects. By being there, being engaged and constantly playing the
role of the instigator to think bigger and make ideas sharper, Tony sent a powerful
signal to the organization that innovation mattered, that big bets were important,
that boldness was rewarded and championed.
“I think a lot of people in our industry are accustomed to hearing senior executives
extol the importance of game-changing innovation, but then the incentives a little
lower down in the org are all aligned with getting stuff into market fast and doing
what it takes to hit a quarterly sales number. Honestly, I think many managers are a
bit cynical about C-suite commitment to Breakthrough Innovation, but Tony really
defied any would-be doubters.
“By 2012 we were ranked externally—by retailers and industry analysts—as one of
the very best. We had launched three $100 million platforms, including creating a
new brand and category with MiO water-enhancing drops. We earned Wal-Mart’s
vendor of the year award and numerous other industry accolades, including six
Breakthrough Winners in four years.”
“When I met with client CEOs as a consultant last year,” Calpino emphasized,
“one of my first questions was, What are your top three new product initiatives? If
they didn’t know what they were, why they were important, and the core consumer
demand they addressed, that’s a problem. Most senior execs think it’s sufficient
to articulate priorities, but that turns out to be insufficient. The CEOs need the
initiative-level engagement on the big bets, or else decisions will be made and
resources allocated based on shorter-term incentives of middle managers—and
that’s suicidal for Breakthrough Innovation.”
Leaders who expect transformational innovation outcomes need to show up and

roll up their sleeves. Sustained, profitable growth depends on a robust, consistently
successful innovation capability in which C-suite leaders play an active role.

LESSON 2: PROTECT THE EXPLORERS
“It was shortly after the formation of AB InBev,” recalled Pat McGauley, the company’s
former vice president of innovation.7 “We gathered our top 50 executives for a strategic
planning meeting at Harvard. A central part of the multiday session focused on organizing
ourselves for growth, and we performed a self-assessment exercise concluding that we
were incredibly proficient exploiters of opportunity but not nearly as capable of exploring
for future opportunities.
“I think many executive teams get that far—acknowledging strengths and weaknesses—
but a key contributor to our success was that our zone president, Luiz Edmond, didn’t
just say, ‘OK, you guys go fix that.’ He realized that we had a massive set of processes
and incentives and a deeply rooted culture that would conspire against efforts to allocate
serious resources to exploring and developing radically new growth frontiers. Especially
when you consider the massive scale of our flagship brands, anything truly innovative is
just going to look ridiculously small by comparison, so innovation has built-in opposition.
“A specific example of the impact Luiz had was in how he created his Explore agenda,
where he allocated significant time and regularly met with me and other key stakeholders
to review Explore projects, challenged us to think bigger and drove alignment within the
organization.
“Luiz was also critical in making sure we were working on the right projects. As
with most large organizations, many of the more unusual innovation ideas were
products of senior-leader speculation rather than consumer insight, and we
had to stop that. Big innovations definitely require executive sponsorship, but
we needed the senior executives to champion our process, not pet projects.
While I quickly earned the reputation in the executive
suite as the guy who was constantly saying no, Luiz
absolutely understood how important it was that we BIG INNOVATIONS
protect a disciplined process rather than executive DEFINITELY REQUIRE EXECUTIVE
privilege. Luiz played an essential role, especially in
SPONSORSHIP, BUT WE NEEDED
the days before we had a track record.”
THE SENIOR EXECUTIVES TO
Geoff Tanner reported a similar experience. “[The] CHAMPION OUR PROCESS, NOT
CEO for Big Heart Pet Brands, Dave West, regularly PET PROJECTS.
—PAT MCGAULEY
asked us, ‘What do you need me to do?’ He stayed
very close to major initiatives and instituted full
C-suite participation in regular, informal, hands-on ‘pictures and prototype’ sessions with
the Innovation Team. Dave understood full well that blockbusters need senior support
because these initiatives run contrary to every entrenched discipline and cultural norm
and short-term economic incentive of the organization. CEOs who assume they can just
declare the need for innovation and leave it to their subordinates to follow through will be
sorely and systematically disappointed. For better or worse, Breakthrough Innovation has
to be a hands-on executive activity.”

LESSON 3: BECOME THE VOICE OF “YES”
As discussed earlier and noted by Machiavelli 500 years ago, innovation has
entrenched forces opposed against it and plenty of eager naysayers. When
C-suite leaders become the voice of “no,” innovation withers. By contrast,
good things happen when CEOs systematically ask these questions:
• What can I do to help?
• How do we make this even bigger?
• What barriers are in your way?
Actions in the C-suite reverberate powerfully, and if managers anticipate a senior champion,
they’re motivated to strive greatly and do their very best work. Conversely, when the C-suite
is perceived to be a risk-averse firing squad, the flicker of early innovation dies a predictable
and quiet death. There is symbolic value in the ratty pair of Nike sneakers that Jeff Bezos
hands out with tremendous fanfare to the Amazonian who “just does it” and brings a great
idea to life. There is practical value in the way that Intuit permits managers to conduct
small in-market experiments without any internal approval requirements. A CEO who
wants innovation should work hard to be known as the leader who asks, “What if . . . ?”
This is an unnatural act for executives trained to act decisively, know the answer and drive
the quarterly number. The perception is that such leadership demonstrations inspire
confidence, and in certain instances, this may be true. However, successful leaders of
systematically successful innovation organizations loosen their grip on certainty and find
comfort in the honesty of not knowing. The certainty that managers need from CEOs flows
from the conviction that the future needs to be created and that past practices and present
profit engines will not be allowed to impede the vital work of the innovator. Furthermore,
as managers chart new territories, they need to believe their CEO will be there, breaking
trail and covering their backs.
LESSON 4: BALANCE THE INNOVATION PORTFOLIO
“Well before President Tony Vernon engaged in our quarterly innovation pipeline meetings
at Kraft, we had a three-tier system for organizing our initiatives,” Calpino explained. “The
reality, however, was that virtually all of our initiatives were tier-three incremental
improvements with only the occasional tier-two category-expanding idea. Tier
one was basically a null set unless we fudged and bumped things in there for the
optics rather than the substance.
“When Tony showed up, all he wanted to hear about was the tier ones,
and he wanted the substance, not the spin. Unsurprisingly, the forces
that continuously conspire to make big ideas conform to established
processes and production lines and ways of working were offset by Tony’s
insistence that we invest in true breakthrough work. When you know the
president is going to ask you about the progress on your tier-one initiatives, well,
that’s definitely what you put your time and money against.”

Virtually every company we assist has some form of tiered portfolio system, but a client’s
newly installed chief growth officer concluded a self-assessment that applies to many: “For
us, the set of top-tier or transformational innovations is basically empty, and much of the
so-called incremental stuff is unlikely to prove incremental at all. Our teams are running
like crazy, but we’re not going anywhere.”
SUCCESSFUL CEOS WILL OWN THE TOP INNOVATION TIER.

THEY SHOULD HAVE FAMILIARITY WITH THOSE INITIATIVES
AND PROTECT THEM FROM ENTRENCHED FORCES THAT
WORK TO CO-OPT AND UNDERMINE THEM.
LESSON 5: LEARN METHODICALLY TO IMPROVE CONTINUOUSLY
“Early in my career, I was an innovation leader at SC Johnson when Fisk Johnson was relatively
new at the helm and the legend of Sam Johnson loomed large,” Calpino recalled. “Fisk had
inherited and shared his father’s deep and real commitment to innovation. The family’s
intense commitment ran strongly through the company’s senior leadership, including CEO
Bill Perez. Bill’s leadership was hands-on and open-minded. He not only wanted to lead,
he wanted to learn and improve. One of the projects Bill devised was to divide marketing
and R&D managers and senior execs into three cross-functional teams to analyze decision
making, resource allocation, team composition, insight generation and other key variables
related to three discrete sample sets. One team focused on our most successful launches. A
second team—the one nobody wanted and I was on—analyzed our unsuccessful launches.
The third team looked at some of the best innovation organizations in the world across a
variety of industries.
“So what did we learn from our study project at SCJ? Every success we found had an active
senior-executive champion. This was someone in the C-suite or divisional president with
[profit-and-loss] authority. There were no exceptions to this finding across all three of the
study sets. By contrast, among our failed launches at SCJ, none of them had that level of
senior leadership. The initiatives failed primarily because of cuts and compromises, not
because the core ideas were bad.”
The study conducted at SC Johnson illustrates something underscored by McGauley and

Tanner as well. Successful innovators study their own launches, study competitive launches
and benchmark outside the category—learning lessons from as many places as possible in
the interest of continuous improvement.

LESSON 6: CULTIVATE CREATIVITY AND KEEP INSIGHTS INTACT
The most valuable innovation ideas are ideas that open new categories or expand existing
ones. Generally they break accepted category definitions and, consequently, tend to challenge
internal organizational processes, incentives and mental models. Big ideas cross disciplines
and integrate seemingly disparate fields—product science, manufacturing technology, pricing,
packaging, finance, media and retail activation, to name a few domains. It’s almost a certainty
that the more unexpected the idea, the more natural enemies the idea will find internally. It’s
not personal; it’s a reflection of incentives and established priorities.
If senior leaders expect their organizations to seek, develop and commercialize deeply
creative ideas that challenge the status quo, then these same senior leaders need to be
at the forefront of pushing boundaries, bringing outside perspectives into the
company, challenging assumptions and cultivating a playfulness that fuels
imagination. Successful innovation executives publicly recognize and reward
lateral thinking and managers who keep fragile insights whole rather than
dilute or distort them in the interest of complying with established beliefs and
practices. And yes, sometimes cherished timelines need to be adjusted in the
interest of getting it right.
Many readers may push back, saying, “In our company, timelines are
nonnegotiable.” That’s exactly the point: C-level involvement is required to
ensure that ideas aren’t sacrificed in the interest of timelines. The launch of
Butterfinger Peanut Butter Cups was delayed eight months in order to get
every detail right, for example. As L’Oreal’s Said Dabbagh said regarding the
CEO support for 2015 Breakthrough Winner Advanced Haircare, “There was
always a sense of urgency, but it was urgency in getting it perfect.” That’s senior
leadership that fuels Breakthrough success.
LESSON 7: REMEMBER, INNOVATION IS HIGH MAINTENANCE
One of the points that Calpino, McGauley and Tanner each emphasize is that a
robust innovation capability is like physical fitness; without systematic discipline,
it’s easy to lapse into bad habits, and you can lose it much faster than you attain it.
Institutionalized capabilities quickly atrophy when senior leaders divert attention or
allow short-term expediencies to trump category-creating exploration.
Calpino offered a cautionary tale: “Throughout my career and during my time at Kraft,
I’ve seen the engagement and commitment of senior leadership ebb and flow—even the
best ones. There are so many other ‘more urgent’ and burning issues, and therein lies
a huge challenge, because Breakthrough Innovation just never becomes routine. It is
always, always hard work requiring senior engagement and commitment. It is so easy to
slip, and the next thing you know, the tier-three list is huge again, and it’s back to ‘Where
are the tier ones?’ The truth is that I’ve learned—by my own mistakes—that you have to
be relentlessly vigilant, or hard-earned capabilities will quickly atrophy, and bad habits will
reassert themselves.”

JOBS THEORY
REFRESHER
WHAT’S A JOB?
• A “job” is the progress that an individual seeks in a given circumstance.
• The job to be done generates the energy required for someone to take an action, such as pull a
brand into his or her life or develop a compensating routine.
• While many of the jobs in our lives have adequate solutions, successful innovations resolve
circumstances of struggle and fulfill unmet aspirations: they perform jobs that formerly had only
inadequate or nonexistent solutions.
• Because jobs occur in the flow of daily life, the circumstance is the essential unit of innovation
work—not customer characteristics, product attributes, new technology, or trends.
DIRECTLY VERIFIABLE ELEMENTS INCLUDE:
CIRCUMSTANCE STRUGGLING MOMENTS
And they barely The value-sized bags are impossible...

fill the box!
$
$$ 40
LBS
Smells like the cat box needs These small bags are
changing... ugh! Out of litter, again. such a waste of money. Back to the store... again... [sigh] I can’t even lift them.
Who, when, where Complication, compromise, trade-off, or struggle

Desired progress, 1. Buying and using a product that imperfectly performs the job
outcome, experience 2. Cobbling together a workaround solution involving multiple products
or solution
3. Nonconsuming compensatory behavior
Remember: Sometimes the struggle is discernable and quite clear; other times, especially when
consumers have developed compensating routines, the struggle is far less obvious.
WHAT DOES A JOB LOOK LIKE?

YOU CAN VISUALIZE A CIRCUMSTANCE IN WHICH A JOB ARISES AS A SHORT STORYBOARD
CAPTURING ESSENTIAL ELEMENTS. SOME OF THESE ELEMENTS CAN BE DIRECTLY VERIFIED,
AND OTHERS NEED TO BE INFERRED AND VALIDATED.

WHY ARE JOBS SO IMPORTANT?
• Understanding the job reveals why (the cause) people purchase and use products and services, as well as
why they sometimes behave in ways that involve no purchase at all (nonconsumption).
• Innovation initiatives that are organized to resolve well-defined yet poorly performed jobs proceed with
purpose and efficiency. Conversely, initiatives untethered to specific jobs lack meaning and proceed
haphazardly, if at all.
• Viewing the marketplace through the lens of consumers’ jobs to be done redefines categories (typically far
larger than conventionally envisioned) and reframes competitors (typically more numerous and diverse than
conventionally considered).
• Jobs Theory focuses the insight process on the search for circumstances of struggle, unmet aspirations, and
pools of nonconsumption. Demand Driven Insights identify poorly performed jobs.
• Jobs Theory creates a shared purpose and common language that facilitates communication and integration
across diverse functional areas. A well-defined job enables efficient development as well as in-market success.
ELEMENTS THAT NEED TO BE INFERRED INCLUDE:
CRITERIA SOLUTION
Lighter
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50HTER
purr...
weight? purr
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ter AY LIG
cri ALW ance
t 0HT%
are ums 5 ER
LIG
c
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sp TT
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LI
Wow! It’s like they’ve
been reading my mind. All the strength, half the weight.
The criteria that people apply The functional, emotional Breakthrough Winners nail poorly performed jobs:
in evaluating “job candidates” and social dimensions of All the strength, half the weight.
(i.e., potential solutions). benefit that collectively
constitute the ideal solution
Understanding the job for the job: the “job spec,”
dramatically reconfigures or blueprint for successful
category structure and innovation.
competitors. For a given job,
consumers regularly consider
an array of solutions that
extends well beyond a given
store aisle—and often beyond
the store as well.
Remember: criteria are always
circumstance specific.

SUCCESSFUL INNOVATIONS
RESOLVE CONSUMER
CIRCUMSTANCES OF STRUGGLE —
AND YOUR CONCEPT SHOULD TOO
Creating an appealing product concept is an important innovation milestone.
A concept conveys the promise that the product will fulfill.
MOST CONCEPTS INCLUDE:*
95%
NAME
PRODUCT NAME
BENEFIT
70% NAME
NAME
NAME
80% REASON TO
BELIEVE
CONSUMER
INSIGHT
HOWEVER, ONLY 1/3

SUCCEED IN PRE-MARKET WHY? OF CONCEPTS FULLY
DESCRIBE THE CONSUMER’S
ONLY CIRCUMSTANCE OF
TESTING.
STRUGGLE:
The situation in which the innovation

could help solve a problem or fulfill an
aspiration. As a result, consumers fail to
= 2,000 concepts tested annually connect with the product idea.†

CONCEPTS THAT CLEARLY EXPRESS A CIRCUMSTANCE OF
STRUGGLE PERFORM 58% BETTER‡
These concepts help to sharpen the

connection between the “job to be done”
in consumers’ lives and the product’s key
messages and benefits. As a result, consumers
are more likely to “hire” these products.
Consumers perceive concepts with a complete circumstance of struggle to:
BE MORE BE MORE HAVE AN ADVANTAGE OVER BE A BETTER

INNOVATIVE RELEVANT SIMILAR PRODUCTS VALUE
A COMPLETE CIRCUMSTANCE OF STRUGGLE EXPLAINS:
WHO IS WHEN THEY ARE WHERE THEY ARE

STRUGGLING STRUGGLING STRUGGLING
*
Based on an analysis of more than 600 concepts from 40 clients across 30 countries and 60 categories. Concepts were coded by a panel of experts.
†
Many factors have been shown to contribute to concept success, including: collaborative ideation, testing a wide range of ideas with consumers, and conveying key messages in a
clear, focused way.
‡
Data based on Nielsen’s Factors for Success concept testing framework, which is highly predictive of in-market success.

ORGANIZING FOR
I N N O VAT I O N S U C C E S S :

ne of the most frequently asked > THINK ORGANIZATIONAL INTEGRATION,
questions of the Breakthrough NOT ORGANIZATIONAL HIERARCHY
Team, Nielsen’s innovation
business partners and Cambridge What Jobs Theory compels us to do is shift our angle of analysis
Group principals is how best to organize from the vertical silo to the horizontal alignment with the desired
the innovation function. Should it be progress of the end customer. In other words, the key organizing
within the business unit or stand as an question is this: How do we best integrate across functions
independent corporate function? Should such that the end-to-end internal process is perfectly configured
we create a “blue sky” or “breakthrough” to perform the customer’s job to be done? Kellogg’s found
group separate from our existing Breakthrough success with Cheez-It Grooves, for example, by
operations? Should innovation report up tightly integrating the brand, innovation, R&D and supply chain
through marketing or R&D, and where teams, rather than working sequentially and independently.
should consumer insights live? Should we
create an innovation “center of excellence” A “REORG” IDEA WORTH USING? INTEGRATE YOUR
or a chief innovation officer role to ensure ORGANIZATIONAL RESOURCES INTO PROCESSES THAT PERFECTLY
best practices are shared company-wide? FULFILL THE CUSTOMER’S JOB TO BE DONE.
The list goes on and on, and you’ve
probably wrestled with these important Our working hypothesis for why so many corporate
questions inside your company as well. reorganizations fail to deliver desired results is that they merely
shift from one form of vertical organizational structure to another
Given the frequency of the form of vertical organization. Reporting lines for innovation might
reorganizations, the diversity of shift from marketing to R&D or reassign P&L responsibility to
approaches applied and the variability of the region rather than the business unit and reorganize country
results, there’s actually a very rich sample managers into regional zones, but
for researching the question of how best NEW PRODUCTS all of these common types of moves
to organize. However, our extensive client are just so much shuffling of the
SUCCEED BY
experiences reveal few patterns or credible deck chairs. One order might prove
clues. In fact, the lack of patterns poses
ENABLING marginally better than another, but
a more fundamental challenge: Are we DESIRED our belief for why so few of these
asking the right questions? Are we even PROGRESS, efforts pay out is that precious few
adjusting the right variables or pulling the are guided by the end customer’s job
FULFILLING to be done. Consequently, they apply
relevant control levers?
UNMET the wrong lens—hierarchical vertical
Jobs Theory can help us. It turns out that ASPIRATIONS organization, rather than the job-
aligned horizontal integration.
most companies are framing the “How AND CREATING
should we structure ourselves?” question
in a fundamentally unhelpful way. Typically,
DESIRED Remember what Jobs Theory teaches
leadership focuses on “organizing” into EXPERIENCES. us: new products succeed because
some ideal vertical structure based on customers hire them to perform
function or geography or business unit or important jobs in their lives. Consumers pull products into the
technology or customer segment or brand flow and fabric of their daily lives in order to resolve struggling
or industry category. Regardless, the angle moments and trade-offs. New products succeed by enabling
of analysis is fundamentally vertical: who desired progress, fulfilling unmet aspirations and creating desired
reports to whom, which budgets sit where, experiences.
who is responsible for what, where the
P&L sits and the like. When managers focus on perfectly fulfilling the customer’s job to
be done, they ask themselves the right question: How should we

integrate across functions in order to nail the customer’s In our experience, nobody owns responsibility for the end
job? Notice the shift. The relevant axis for orienting our customer’s job, and in the organizational conversations
organizational-structuring effort is not the vertical function, that proceed, the job has no voice. When we’re asking the
but the horizontal process for fulfilling the job. wrong questions and framing the issue incorrectly, it’s
unsurprising that so few reorganizations deliver desired
WHO IN YOUR ORGANIZATION OWNS THE CUSTOMER’S results.
JOB? WHO IS RESPONSIBLE FOR ITS PERFECT
FULFILLMENT? DO THESE PEOPLE HAVE THE DECISION
RIGHTS TO ALLOCATE RESOURCES AND ESTABLISH
OPERATIONAL PRIORITIES TO NAIL THE CUSTOMER’S
JOB SPEC?
> THINK INTERFACES, NOT BOXES OR NODES

You don’t have to sit through too many board meetings, very little to say about the vertical organization of these
strategic-planning sessions or acquisition integration nodes on the org chart. Instead, Jobs Theory compels
meetings to determine that the essential unit of most managers to think less about the nodes and far more about
organizational structuring efforts is a “box.” A box generally the interfaces: How do the nodes across functional silos
signifies a person in a defined role with lines identifying interact so as to perform the customer’s job to be done?
associated reporting relationships. But Jobs Theory has
> STAGE GATES: THINK HOW—NOT WHEN—PROCESS STEPS

CONNECT, AND NEVER FORGET THE WHY
Most stage gates are constructed as how discontinuous initiatives should in pursuit of Breakthrough Innovation,
a series of if-then checkpoints: If you be passed along among functional and here is why: process interfaces
meet the established requirements, areas so the essential elements of the are modular (subject to a clear spec)
then you may proceed. There are all offering that are critical to performing under normal business conditions
kinds of good reasons—reasons that the customer’s job-to-be-done endure. but interdependent when it comes
go all the way back to Adam Smith The challenge of the development to discontinuous, transformational
and the pin factory—for why process process is to add all of the dimensions innovation.8 Consequently, managers
structure is important. Processes work of benefit that enable the customer’s actually must work cross-functionally
as long as inputs are consistent and desired progress and experiences to manage the interdependent
a standard set of rules can effectively yet add nothing else that would only functional interfaces; otherwise,
govern how items move through a increase cost or distract or confuse essential meaning will be lost. If this
process and what happens along the the customer. Rigid stage gates do not sounds inefficient, in a way it is, but
journey. do this. They do the opposite. Rather the alternative is to be extremely
than adapt the process to ensure efficient at doing the wrong
Innovations, especially the perfect fulfillment of the job, they things. Unfortunately, too many
breakthrough variety, do not come force the initiative to conform to the organizations actually reward doing
with an attached set of instructions strictures of the stage gate mandates. the wrong thing fast and penalize
for how they should be developed. doing the right thing in the time
Specifically, there is no standardized We and many others have made much and fashion required for in-market
set of rules that can effectively govern of the need for cross-functional teams success. Not good.

It’s actually shocking—and we use of Transformation” section, the were designed with transformational
that word advisedly—but we have successful innovation processes of intentions, and they required distinct
seen great managers in world-class the very near future will be adaptable. development processes.”
organizations essentially being taken For each initiative, there is an ideal
captive by their governing stage gate process that should leverage all Finally, in organizations in which a
process. In other words, the timelines relevant experience and should be machine-like process trumps all else,
they follow, the decision-making both better than and different from the creative spark required to create
protocols they apply and the resource prior efforts. In short, the innovation a future different from the past has
allocation criteria they employ are process should be mindful of the no chance of catching flame. Said
dictated not by the consumer’s job nuances of the specific initiative as differently, folks won’t even bother
to be done or even by the long-term well as consistent with the ultimate trying, because honestly, what’s the
(two to three years, rather than two purpose of the innovation effort. point? Either transformational ideas
to three months) financial interests When this is not the case—when will be killed because they don’t
of the enterprise, but by what is best innovation activities are merely slavish conform to established processes
described as a “machine.” responses to an inanimate, inflexible and rules, or they will be so badly
stage gate machine—innovation distorted in order to conform that
Chobani Flip, Cheez-It Grooves and outcomes will suffer. their inherent difference and value will
Butterfinger Peanut Butter Cups are be engineered out of them.
not the first Breakthrough winners to As Geoff Tanner noted, “If we had
highlight the importance of delaying subjected our three Breakthrough Dysfunctional and fundamentally
launch dates in order to nail the job Winners to the constraints of flawed innovation stage gate
and perfect the offering. our stage gate process with the processes are a major reason why the
same requirements as sustaining industry is enduring an innovation
As we called out in the “New innovations, none of them would have crisis. Only breakthrough leadership
Growth Order: CPG on the Cusp made it through. These initiatives will address this urgent reality.
PRIORITIES DETERMINE BEHAVIORS, WHICH DRIVE OUTCOMES

REPETITION OVER TIME SHAPES CULTURE
HIGH
Economic Value
BREAKTHROUGH LEADERSHIP
Cultures that focus A culture of

CALENDAR MANAGEMENT
myopically on breakthrough
efficiency metrics leadership places
Learning Value
Learning Value
and quarterly results

One-offs Home Runs high value on both
HIGH
LOW
tend to generate economic and

considerable learning outcomes.
innovation waste at
worst—and “one-off ”
successes at best.
Waste Proprietary Knowledge
LOW
Economic Value
Use this framework to map actual innovation initiatives. What questions, insights or opportunities for improvement emerge?

A SPECIAL FEATURE
B A L A N C I N G T H E I N N O VAT I O N P O R T F O L I O
ven as we strive for and celebrate blockbuster reframe and refresh, to name a few. Three-bucket
innovation success, not all innovations can be segmentations are the most popular, though we work
“breakthrough,” nor should they be, as we noted with clients who reduce to two and others who expand to
at the beginning of this report. Innovation portfolios four. Whatever we call it and however we slice it, we need
must balance the need to keep existing brands fresh—to to “future-proof” and better align our portfolios to meet
drive growth today—with the very different challenge of current, latent and emerging demand of an ever-changing
redefining the marketplace with products that drive growth set of consumers and their needs.
tomorrow.
TIER 1 – CATEGORY CREATION & TRANSFORMATION
Reflecting this reality, most companies categorize new
TIER 2 – BRAND EXTENSION & EXPANSION
product initiatives using segmentations such as tiers one,
TIER 3 – REFRESHES
two and three; gold, silver and bronze; or breakthrough,
PORTFOLIO PROBLEMS
CPG new-product activity is very high, but less than 20% of initiatives generate greater than $10 million in year-one retail
sales, and 54% produce $3 million or less. Given the urgency to grow and the considerable expense associated with every
innovation initiative, these results are alarming.
FEWER THAN 20% OF CPG INNOVATIONS GENERATE MORE

THAN $10 MILLION IN SALES IN THEIR FIRST YEAR
$10M+ <$1M
$3-10M $1-3M

Leaders are hungry to find growth and operational progress, and the launches rarely exceed the sales of
efficiency, and most are finding that the high level of what the new products replaced.
activity is producing neither. They lean too heavily on small, • They talk the talk of “fewer, bigger, better” while
inconsequential new products and pack changes that offer walking a different path.
very limited consumer appeal. Leaders believe tier-two • Few leaders have a holistic view of how their
and -three projects are low risk, when in fact, the results innovation activities fit together to deliver the required
produce limited growth and high waste, thus compounding financial and share-growth goals.
risk. There is too much thrown against the wall, absent a
purpose and consumer job, perpetuating a costly, broken Despite this common awareness, when it comes to
system. resource allocations, innovation portfolios are anything but
balanced. We find that innovation activity and investment
In our interviews, most leaders are surprisingly aware of concentrate overwhelmingly in the sustaining tiers.
the systematic waste: Independent McKinsey research finds the same: “Most
established companies err on the side of overloading their
• They describe the high level of activity as “churn,” even innovation pipelines with relatively safe, short-term, and
deriding the practice as “SKUs for news.” incremental projects that have little chance of reaching
• Multiple executives acknowledge that their innovation their growth targets.”9
“funnels” operate as “tunnels” through which
initiatives pass via stage gates that never seem to LEADERS BELIEVE TIER-TWO AND
close. -THREE PROJECTS ARE LOW RISK,
• We encounter widespread recognition that the plethora WHEN IN FACT, THE RESULTS PRODUCE
of “tier-two” and “tier-three” projects justified by LIMITED GROWTH AND HIGH WASTE,
“needing to stay fresh” simply mislabel motion as THUS COMPOUNDING RISK.
AMBIDEXTROUS INNOVATION MANAGEMENT:

MAKING THE BALANCE HAPPEN
A balanced innovation portfolio the murky middle tier and speak only that earn a premium. At the same
requires more than a tiered naming of “sustaining” and “discontinuous” time, sustaining innovation should
convention and good intentions; innovations. We generally encourage complement this work, leveraging
it requires leaders to manage the leaders to tilt their portfolio balance existing brands and assets to stay
landscape of resources, processes, toward more focus on discontinuous relevant, sustain distribution and
and priorities in a holistic manner projects. Growth demands that maintain price.
to deliver the desired growth and we create and expand markets,
operational efficiency. Ultimately, categories and brands by prioritizing To be successful, each project should
leaders ensure teams are doing the underserved consumers and poorly serve a clear and additive purpose,
right projects (strategic alignment) addressed circumstances. Search with the organization aligned in
and doing those projects right for opportunities to attract new understanding the project’s role in the
(Demand Driven Innovation). users, increase day parts and usage innovation strategy. All innovations,
In the interest of clarity, we eliminate occasions, and create benefit bundles no matter how near in or far out,

A SPECIAL FEATURE
B A L A N C I N G T H E I N N O VAT I O N P O R T F O L I O
should enable a desired experience for consumers. Each Discontinuous innovations, by contrast, tend to create
tier demands a distinct process by which it proceeds from unfamiliar challenges for existing processes and expertise.
idea to launch. Additionally, organizational incentives and resource
allocation rules are specifically designed to discourage
IN TERMS OF ALIGNING INITIATIVES WITH investments in activities that do not improve operating
APPROPRIATE DEVELOPMENT PROCESSES, THERE IS A efficiencies by leveraging existing capabilities. Discontinuous
BASIC LITMUS TEST MANAGERS CAN APPLY: CAN WE innovation is the work of explorers, not exploiters, to borrow
TRUST THE EXISTING PROCESSES AND INCENTIVES the AB InBev terminology. Managers need a distinct mind-
TO DEVELOP THIS INITIATIVE FAITHFULLY AND FULLY, set, asking questions such as: How big can we make this?
OR WILL THE ESTABLISHED STRUCTURES BEND THE What needs to be true in order for this to succeed?
INITIATIVE INTO CONFORMITY?
Capital expenditures, longer development horizons and
The sustaining innovations that keep our current business sustained marketing support should be expected. Category
strong typically align with the processes and priorities of expansion, sustained growth and follow-on platform
our established businesses. These projects will leverage extensions also should be expected. To expect all of these
existing assets and know-how, require relatively little changes to flow from the same processes and incentives—
investment, demand little explanation to our retail and managers—that drive sustaining improvements and
partners, and provide a return measured in months, not this quarter’s number is foolhardy, yet this is too often the
years. As noted previously, because too many initiatives industry reality.
are being ushered through the stage gates with inadequate
consumer validation, the process even for the lower-tier THE RESULT OF A ONE-SIZE-FITS-ALL APPROACH
sustaining innovations is not performing as it must. Once TO INNOVATION DEVELOPMENT IS TREMENDOUS
we scrub our pipelines of these “innovations without a AND SYSTEMATIC WASTE—AS WELL AS THE
cause” (to borrow language from the 1955 James Dean COMPOUNDED OPPORTUNITY COST. WHEN SENIOR
classic), these initiatives should accelerate through LEADERS WRING THEIR HANDS OVER THE THREATS
the development and assessment stages expeditiously, OF NIMBLE UPSTARTS, THEY GENERALLY DO SO
supported by efficient use of innovation science and WHILE NEGLECTING THE EXPONENTIALLY MORE
predictive analytics. DESTRUCTIVE FORCES DESIGNED RIGHT INTO THEIR
OWN PROCESSES.
A BALANCED-PORTFOLIO DIAGNOSTIC
All initiatives, sustaining and discontinuous, should have a areas in which conscious effort and concrete steps need
clear purpose answering these basic tests: to be taken in order to make the promise of a balanced
innovation portfolio a reality. Is this a comprehensive
• Does this offering enable desired progress in my checklist ensuring success? By no means. But if you get
customer’s life? these items right, you’ll be thinking and acting like a
• Does it resolve a struggling circumstance? balanced-portfolio innovator.
• Does it do a job better than what consumers hire
today? You’ll want to devise the list that’s right for your
organization, but these are some of the major elements
Beyond these common core values, we’ve identified seven requiring differential management:

SUSTAINING DISCONTINUOUS
LOCUS OF Be impatient for hitting timelines, Be impatient for perfection. Nail the job. Make
IMPATIENCE budgets and forecasts. no compromise to the demand-driven insight
in the faithful, painstaking development and
activation of your commercial offering.
ROLE OF Keep the trains on time and on budget while Design the gates and action standards that
STAGE GATES ensuring initiatives are additive to consumers are appropriate for each individual initiative.
and the full portfolio, never assuming that At each step of development, ask: Are we
“close-in” means low risk. Use predictive staying true to the insight? How can we
analytics to guide decisions. make this initiative even bigger, even better?
SENIOR Senior leaders can safely delegate decisions These initiatives fail without a senior
SPONSORSHIP to the team and process, applying established champion and protector.
priorities and resource allocation rules.
TEAM Modular handoffs from function to function Functional interfaces are interdependent and
STRUCTURE maximize efficiency with no loss of fidelity to require integrated, cross-functional teams
the core idea. collaborating from inception throughout
development and launch.
INCENTIVES Established incentives align for Consciously liberate managers from the
effective development. strictures of short-term mandates. Proper
incentives need to be custom-crafted for
discontinuous innovations to flourish.
METRICS Assess potential using the natural metrics for Nothing—repeat, nothing—systematically kills
sales and margin that organizations have in discontinuous innovations like return on assets
place for ongoing operations. Adhere to them. and similar efficiency metrics. Discontinuous
efforts should deliver strategic (as well as
economic) benefits. Share of growth is typically a
more relevant measure than share of market.
IN-MARKET Provide sufficient execution support to Commit to best-in-class support and execution
SUPPORT achieve goals, while leveraging proven and to drive Reach, Resonance and Reaction to
cost-effective sales and marketing elements. make the launch as big as it can be and sustain
HORIZON
into years two, three and beyond.
Until senior leaders begin to finance, staff, develop and evaluate fundamentally different types of innovation in appropriately
differentiated ways, balanced, high-performance innovation portfolios will prove elusive and mythical. A culture of innovation
success requires leaders to push their organizations to think differently and act differently. It’s the only way to perform differently.

e are extremely bullish on the opportunity for Breakthrough Innovation—
and high-performance, balanced innovation portfolios—in the CPG
industry. As we noted at the outset, the marketplace of 2030 will look
wildly different than the marketplace of today:
• The products will be different. • Collaboration spanning multiple firms

and industries will be widespread.
• Many brands will be new.
• There will be a new age of R&D
• Shopping habits will evolve.
focused less on product benefit and
• Traditional “category” definitions will food science and more on leveraging
lose utility and meaning. digital, mobile and social technologies
• Consumers will become increasingly to enable desired consumer
diverse in their tastes and priorities. experiences.
• New online-enabled channels will • Innovation will also address the

emerge. need—and the opportunity—of
feeding and caring for a global
• There will be a proliferation of new
population of 10 billion people.
business models.
• Food, nutrition and health care will
• Innovation will be far less product-
become more intertwined.
centric.
• Sustainability will move from
• Smart technologies will continue
buzzword to table stakes. Successful
to transform how consumers
companies will make the planet a
shop and use, while also affording
better place for all forms of life.
manufacturers new opportunities for
innovation.
This is not to play soothsayer or futurist but to underscore that the future will be
created by those who harness the energy of the entrepreneur and the power of
innovation. We look forward to assisting those who want to lead.
The 2016 Breakthrough Winner Spotlights provide real-world case studies of

what transformational innovation looks like and how to achieve it. Remember,
much better innovation outcomes are absolutely a matter of choice. Innovation
is far more science that happenstance or luck. Jobs Theory provides us with
an understanding of the causal mechanism for consumer purchase and use.
The Demand Driven Innovation system gives us the framework for converting
opportunity into outcomes.
There is little doubt that the accelerating pace of change will have leaders and
laggards. Laggards will find little margin and tight windows to regain footing
before they tilt toward irrelevance and extinction. Leaders will create a future in
which opportunities abound, if only because of the creative opportunities afforded
by the relentless advance of technology and the inherent creativity of the human
spirit. Organizations that can harness and nurture both—the technology and the
creativity—will define the future, and we are confident that it will be a remarkable,
exciting place.

WE EXTEND SPECIAL THANKS TO THIS YEAR’S WINNERS, WHO HAVE NOT
ONLY SHOWN THE WAY THROUGH THEIR ACTIONS BUT SHARE THEIR
STORIES, BRINGING BREAKTHROUGH INNOVATION TO LIFE. THIS MAY
JUST BE OUR BEST, AS WELL AS OUR BIGGEST, SPOTLIGHT COLLECTION
EVER. SO BUCKLE IN FOR SOME RIVETING READS THAT OFFER PLENTY OF
TRANSFERABLE WISDOM.
A final thought to consider as you read the following stories: If we were to add a subtitle
to the Spotlight section, it would be “Breakthrough Data.”
Confusing? Crazy?
The point is that the insights powering Breakthrough Innovation are stories, not
statistics. Stories are data.
Stories not only captivate Spotlight readers but also align teams and propel
development processes that retain fidelity to the insight. As Kraft Heinz’s senior director
of marketing, Geoff Feil, said in the context of 2015 Winner Lunchables Uploaded,
“It’s amazing how many meetings we didn’t have to have.” The data that provides the
aligning clarity is a simple, compelling story of a consumer struggling to make progress
in a specific circumstance—and every Breakthrough Winner has such a story at its core.
So enjoy this year’s amazing class of Spotlights. We hope that as you finish the report,
you will feel inspired to seek out compelling moments of struggle in your customers’
lives. That’s how you’ll begin your own breakthrough journey.
2016 BREAKTHROUGH INNOVATION REPORT PROJECT LEADERS
KRISTIN BEHRMANN KELSEY THORTSEN
This report is the product of a great team, working together, against deadlines, with
impossible authors—while never missing a beat in their day jobs.
The indefatigable 2016 Breakthrough crew:

Genevieve Aronson, Mike Black, Anqi Chen, Daisy Dimov, Kim Gaskins, Courtney Gaynier,
Katie Gottron, Kayla Grayson, Aritra Kanjilal, Lisa Karigan, Nicholas Kaufman, Micah Kim,
John Lavelle, Al Lemieux, Jen Loukes, Steve Luebkeman, Regine Mechulan, Emily Mescher,
Lauren Minton, Kevin Nielsen, Andrew Oberright, Courtney Ramirez, Saul Rosenberg,
Craig Smith.
Thank you!

WINNER
SPOTLIGHTS
SPOTLIGHT #1
ARM & HAMMERTM CLUMP & SEALTM
SPOTLIGHT #2
BAI
SPOTLIGHT #3
BREYERS® GELATO INDULGENCESTM
SPOTLIGHT #4
BUTTERFINGER® PEANUT BUTTER CUPS
SPOTLIGHT #5
CHOBANI FLIPTM
SPOTLIGHT #6
DOLE® CHOPPED SALAD KITS
SPOTLIGHT #7
MILK-BONE® BRUSHING CHEWS®
SPOTLIGHT #8
NASACORT® ALLERGY 24HR
SPOTLIGHT #9
OSCAR MAYER P3
SPOTLIGHT #10
SALLY HANSEN® MIRACLE GELTM
SPOTLIGHT #11
SKINNYPOP® POPCORN

SPOTLIGHT #1
ARM & HAMMER™

CLUMP & SEAL™
AN “IMPOSSIBLE” QUESTION UNLEASHES AN UNREAL OUTCOME
SOMETIMES IT TAKES AN “IMPOSSIBLE” QUESTION “Litter odor creates a ‘glass ceiling’ of consumer
to spark a Breakthrough win, and certainly we have seen satisfaction,” added Bryan Harpine, director of global new
this before. For Church & Dwight’s Arm & Hammer products. “Across all manufacturers, nobody was doing
cat litter team, the question was this: If price were no better than 75% satisfaction, which is a pretty low ceiling.
issue, could we make litter box odor completely disappear? This dissatisfaction led to numerous undesirable quality-of-
Despite decades of cat litter improvements, odor was life consequences, from the functional:
still the dominant complaint among cat owners. As Barry
Goldblatt, the company’s vice president of market research, “Cleaning the litter box is the worst job in the house . . .
noted, “We constantly measure ‘consumer need gaps,’ and worse than cleaning the toilets.”
there was always a persistent gap relating to odor.”
. . . to the emotional:

SPOTLIGHT #1 | ARM & HAMMER™ CLUMP & SEAL™
“I just feel like a bad homemaker if my house smells.” ranks together in pursuit of this goal, and we were really
motivated both by the prospect of industry transformation
. . . to the social: as well as by the opportunity to make substantial quality-of-
life improvements to our customers’ lives. In the context of
“Sometimes I feel embarrassed when I have guests over.” cat litter, this was one of the most remarkable missions we
ever took on.”
“Consumers were passionate in their dissatisfaction and
said so,” Harpine continued. “This sentiment prompted “The thing that happens when you ask a huge question,”
70% of cat owners to use odor-mitigating accessories. Harpine described, “is it unleashes creativity: You’re out
They bought sprays or air fresheners, or sprinkled baking of the sandbox, and now you have the whole playground.
soda on the litter. The dissatisfaction also explained Suddenly you are open to ideas that you never would have
why consumers were loath to pay premiums; even the considered previously. One of the first consequences of
best litters didn’t live up to expectations. And here’s an our expanded ambition was to engage a team of experts
interesting paradox: While it had been difficult historically to perform a global technology search for substrates that
to raise prices even 3% to 4% with a new product, the could lock in odors. We didn’t even ask them to focus
category showed tremendous price elasticity for this on litter, because we didn’t want to constrain thinking or
THE THING THAT HAPPENS WHEN YOU ASK A HUGE

QUESTION IS IT UNLEASHES CREATIVIT Y: YOU’RE OUT OF THE
SANDBOX, AND NOW YOU HAVE THE WHOLE PL AYGROUND.
new extraordinary benefit. In other words, consumers searching. They returned with 145 candidates, which we
would happily pay more, but only for a litter that actually evaluated and reduced to a short list of 10. Among these,
performed against total odor removal. Across the there was one with demonstrated ability to seal in odor
Breakthrough Innovation Project, we have seen this such that there was, literally, zero detectable smell.
consistently: Products that nail jobs command price
premiums.” “It was one thing to have a promising substrate; it was
another to have a commercial product that we could
produce at scale and, eventually, sell at a price consumers
Premium pricing is an innovation consequence,
were willing to pay. We spent four years getting the
not an innovation input. The sequence matters.
substrate right and formulating the necessary blend of
additives as well as developing the coating technology
“And this is where we set our sights,” Harpine to get to an effective product. And by effective, we were
underscored. “Replace the ‘glass ceiling’ with the ‘gold very clear on the claim we needed to make: a ‘seven-
standard.’ And the gold standard is to have guests over and day odor-free home.’ This would be unprecedented, and
have them ‘not even know I have a cat!’” nonetheless, on this point, there was complete team
commitment.
“Just contemplating this notion had a profoundly
motivating effect on the company,” Harpine recalled. “Notably, producing this new litter required $10 million
“Church & Dwight has been extremely cost conscious in capital expenditures, and it was as much the prospect
long before the recent industry cost-cutting movement, of revolutionizing the industry as any business case that
and here we were, asking a revolutionary question: Could motivated our management to approve the investment.
we transform the industry if cost were no issue? It was a This was a cause we believed in, and we were determined,
challenge that brought cross-functional leaders and the organizationally, to succeed.”

“Once we had the product ready,” recalled Melissa Martin,

the marketing vice president, “there was no doubt. We
contracted a national consumer research firm, and they OUR SOLUTION:
substantiated the ‘seven-day odor-free home’ claim via CLUMP & SEAL NEW &
double-blind in-home testing. That result was confirmed DIFFERENT TECHNOLOGY
in a subsequent market simulator test, where the product
Transformational
far exceeded expectations and previous experiences with Innovation
marketed litters. From a product perspective, we had done

the impossible, and now we had to take it to market.” BREAK THROUGH
ODOR “GLASS
CEILING”
“We did a number of things very differently on this
initiative,” Harpine reflected. “For starters, we began
collaborating with our national retail accounts two years
ahead of the launch. There were three pillars to our case
for why they should get behind this product in a major
way:
Current Litter on
100% Satisfaction the Market
• “First, the consumer benefit goal of a seven-day odor- “Odor Free Home”
free home was demonstrably powerful.” 50% – 75% Odor Control Satisfaction
• “Second [was] the strategic appeal of “breaking the
glass ceiling” of consumer satisfaction.”
• “Third [was] the business case for a premium-priced and it is believably premium. Importantly, we knew we had
litter, based on the transformational benefit this litter premium benefits, not just premium packaging.”
would deliver for the consumer.”
“Another critical element we tested was price point,”
“We shared our research with the retailers as well as our Harpine explained. “Remember, this is a category in which
insights on price elasticity—that consumers were more a 5% price increase is a very tough sell, and we were
than willing to pay more for a litter that truly did the experimenting with 30%, even 50%, price premiums. It
job. This advance groundwork with retailers generated turned out that 50% was simply too much, but 30% was
tremendous pull for the product, enabling us to accelerate acceptable and offered the best business case, so that’s
distribution and gain prominent shelf space in the store what we went with.”
once we launched.”
“Getting the consumer to actually try the product was the
“We did something else to win at the shelf which was key, though,” Martin elaborated. “We couldn’t afford to
huge,” Harpine continued. “The orange package is an scare consumers away at shelf with sticker shock, so we
iconic part of our Arm & Hammer brand identity. It links implemented a range of trial sizes and coupons to lower
to our essential equities rooted in our century-old baking the barrier to trial. We also headlined a 100% satisfaction
soda franchise. However, we were about to introduce a guarantee: ‘Any odor smell, return it for a full refund.’ We
truly revolutionary product. Internally, we were challenging were that confident. But once consumers experienced the
and questioning every conceivable assumption and benefit of an odor-free home, they loved the product. It
established belief, so it was only natural that we started was like we were giving them their house back—and the
rethinking the color scheme of the pack. We tested confidence and peace of mind and joy that went with it.
various ideas just as we had through the process and the Clump & Seal also relieved the stress of hosting guests: no
black box really popped. It signaled three things to the more shame, embarrassment, candle lightings and litter
consumer which were exactly the messages we wanted hidings.” Martin shared some customers’ testimonials:
conveyed: this litter is powerful, it is, truly differentiated,

• “It controlled the odor so well that my mother-in-law thought we no longer

had a cat!”
WHEN
• “It was like the cat was just gone!” INNOVATION
• “I’d pay extra for it.”
BECOMES A
“Consumers were thrilled with the product,” Martin continued. “Our retailers COMPANY-
were ecstatic to see new life and profit in this category. We supported the launch
with effective media that really brought the insight to life. In one early TV ad, WIDE MISSION,
a woman pulls the litter box from under her coffee table, and her friend sitting
next to her says, ‘Oh, I didn’t know you had a cat.’” Martin added that this “very
THE POWER
simple” message “connects perfectly to the emotion and anxiety that we knew TO CREATE
we could resolve.”
AND REALIZE IS
“The launch was a tremendous success, with first-year retail sales approaching EXPONENTIALLY
$100 million and better than 50% growth in year two. What we’ve been looking
for since the launch,” Harpine noted, “has been ways to extend the runway for GREATER
this terrific brand by identifying targeted customer need gaps. For example, we THAN WHEN
have launched a lightweight version as well as a bacterial-odor-control product
for consumers more conscious about bacterial odors. So we continue to extend INNOVATION
and leverage the platform.”
HAPPENS IN
“Reflecting on this launch,” Harpine summarized, “not only did we achieve a FUNCTIONAL
lot, we learned some important things. First, once you’ve done transformation
the first time, you are much more open to seeing it and doing it again. It’s
SILOS.
as if the blinders come off, and this ties directly to a second lesson: the
value of asking ‘impossible questions.’ This all began with this seemingly
impossible notion of ‘If cost were no issue, could we create a litter that would
actually eliminate odor completely?’ If we don’t ask that question, none of
this success happens. Third [is] the power of a compelling story. We are very
much a financially driven company with a strong performance record with our
investors, but sometimes you can get so focused on the numbers that you
lose sight of what drives the long-term game, and a hugely compelling story of
transformation has the effect of elevating everyone’s performance and engaging
with the potent consumer struggles that offer the real growth opportunities.
Fourth, when innovation becomes a company-wide mission, the power to create
and realize is exponentially greater than when innovation happens in functional
silos. It’s when you align diverse skill sets at all levels with a huge goal that you
create a powerful catalytic effect that lifts everyone’s game. Everyone wins—the
retailer, the manufacturer and the consumer.”
Breakthrough Innovation doesn’t just deliver great products; it also makes a

difference in consumers’ lives, inspires teams, unifies organizations and builds
better companies. In showcasing all of these qualities, Clump & Seal sealed the
deal on a category-transforming Breakthrough win. n

SPOTLIGHT #2
BAI
F I N D I N G A S U P E R F R U I T I N A WA S T E S T R E A M —
AND TURNING IT INTO A BREAKTHROUGH WINNER
“I NEEDED A SALES GUY, AND MY DAD NEEDED A It turned out that the shoppers loved the product, too, and
job,” Bai founder and CEO Ben Weiss recalled, “so that’s from those humble beginnings in 2009, a Breakthrough
how we started selling. My dad and I took the first bottles Winner was born.
of Bai to local retailers we knew in Princeton, N.J., and
made the sales one-by-one, door-to-door. The retailers may The story begins years earlier, with Weiss graduating from
have just been being nice at first—giving some local guys college with a strong entrepreneurial streak and a passion
a shot. But we really believed in our product, so we made for coffee. Spend time talking with him, and you realize he
the most of these initial opportunities—giving away a ton loves everything about coffee—the plant, the farms, the
of samples and telling people about the drink and why we history, the community, the roasting, the retailing, the café
loved it.” culture and the product innovation. And despite his years
in the broadly defined coffee industry, one thing he couldn’t

SPOTLIGHT #2 | BAI
make sense of was why the coffee fruit, the actual “cherry” that surrounds the
coveted bean, was systematically discarded as a waste product. As Weiss first BUILDING
learned from Indonesian farmers, the cherry is rich in antioxidants and enjoys
many nutritional and medicinal uses in the traditional practices of coffee-
DISTRIBUTION,
growing societies. “It’s a legitimate superfruit,” Weiss noted, “but in First World CULTIVATING
markets, it’s used in a few nutraceuticals but generally just thrown away.”
RETAILER
Weiss determined to turn this fruit into a drink that consumers would love, and
he was convinced there was an opportunity.
RELATIONSHIPS,
WORKING
HARD ON
“To use your language of Jobs Theory,” Weiss reflected, “there have been a ton
of layoffs in the ‘sugary beverage’ industry. The decline of carbonated soft drinks
is old news, but there’s a broader trend with diverse drivers that are particularly THE IN-STORE
pronounced among Millennials and younger.” Weiss quickly rattled off the
following list: EXECUTION—
• “They’re trying to make healthier choices.”
THIS IS
• “They want calories that will work for them, as opposed to empty calories.” MUNDANE
• “[There is] resistance to drinking calories, especially among women.”
• “‘Diet’ products are seen as outdated and offering undesirable trade-offs.” STUFF, BUT IT’S
• “[They have] interest in antioxidants and natural foods that keep you at your
best.”
THE BONES AND
• “[There is] unwillingness to compromise on flavor or taste.” FLESH OF GREAT
• “Younger consumers, particularly, are looking for new, exciting experiences
and brands. This is true in food and beverage, but it’s a generalizable CONSUMER
•
phenomenon.”
“Authenticity matters, which is why you see the boom in craft beers,
PRODUCTS
farmers’ markets, boutique hotels and so many other businesses and BUSINESSES.
brands.”
“The initial products that my dad and I were delivering in 2009 were midcalorie,
and then in 2010, we introduced Bai 5, and it just took off. We had the black-cap
midcalorie and the red-cap five-calorie, and even though we had some super-
popular black-cap flavors, the weight of the consumer demand was all on the
Bai 5 red cap. To focus our resources and energy and expansion strategy, we
shut down the black cap and doubled down on Bai 5—ultimately just dropping
the 5 and calling it Bai.”
“I think we did a number of things that were unusual for a start-up,” Weiss
explained. “One, we did a lot of consumer research early, and two, we focused
on building ‘distribution equity’ as much as brand equity. In my estimation, too
many CPG start-ups focus mostly on the product and the brand, figuring that
they’ll just pay the slotting fees or get it into stores one way or another. They
don’t prioritize distribution as a strategic pillar. We did. Building distribution,
cultivating retailer relationships, working hard on the in-store execution—this
is mundane stuff, but it’s the bones and flesh of great consumer products

SPOTLIGHT #2 | BAI
businesses. We didn’t allow the growth to get ahead of our distribution

capability. As a result, we’ve been able to grow at triple-digit rates for five years,
ONCE YOU SEE
maintain operational and quality control, and feel confident that we’ll sustain THE BEVERAGE
LANDSCAPE AS
our growth rate for the next five years.
“We were growing fast, but we really built the business in a very deliberate way. CONSUMERS
We built our own ‘direct store delivery’ capability, and we focused on our in-store
real estate strategy: How do we connect with consumers in-store, and how do EXPERIENCE IT,
we make this a huge win for our retail customers? Entrepreneurs overlook this
unsexy, block-and-tackle grunt work at their peril.
THE IDEA OF A
‘BEVERAGE WITH
“Costco in the Northeast was our first big account, and they’ve been a great
partner. We did a bunch of four-day road shows (imagine a sampling and
NO BARRIERS’ IS A
shopper-engagement marathon) in their stores. These events were promoted BIG IDEA.
by Costco and invaluable in generating tons of consumer awareness and trial
while also proving ourselves to a huge channel partner. Our Costco success
also provided visibility to other chains, so we quickly began receiving calls from
grocery chains and mass discounters. Target also came onboard early and has
really helped us develop the brand in a fantastic way.”
“In many ways, we inverted the traditional model” by starting to offer the
product in warehouse clubs and getting into convenience stores later, explained
Weiss. Noting that convenience stores (C-stores) provide a chance to get many
consumer trials, he added that this channel is “appealing on that front, but
we felt strongly that if we invested in our distribution equity and built strong
partnerships with some key retail customers first, that we’d then be in a much
stronger position to manage the fragmentation and complexity of the C-store
universe later on.”
“I don’t emphasize the channel strategy and distribution elements because

they’re somehow more important than the consumer story,” Weiss explained.
“They’re not, but they are often overlooked, and they’re critical to success. The
whole time we’re building out our infrastructure and retailer relationships, we
are engaging with consumers every day in a very systematic way. Our ‘Bai-ology’
tasting sessions were structured to learn not only what consumers preferred but
why and what they were switching from. Again, using a ‘jobs’ frame: in order to
get hired, it really helps to understand what will get fired and why.
“If you look at our product line and also our source-of-volume data, there’s
structure and symmetry. There are products that pull, variously, from sodas,
juices, waters and teas. We’ve identified trade-offs associated with each of these
alternative beverage categories and offered options—in the form of enhanced
waters in a variety of flavors, both carbonated and flat—that are beverages with
no barriers. To me, and I think to many of our consumers, the magic of Bai is
that all of their other beverage options have some sort of trade-off, whether it’s
too much sugar, or not enough taste, or artificial additives or too much caffeine.

SPOTLIGHT #2 | BAI
Once you see the beverage landscape as consumers And Bai has taken flight in the marketplace as well. After
experience it, the idea of a ‘beverage with no barriers’ is signing a distribution deal with Dr Pepper Snapple in 2014,
a big idea. You also see that what is often described in Bai has gone national in its distribution while unleashing
blanket terms as a ‘mature market’ is actually an extremely its first major marketing campaign in an effort to drive
diverse and dynamic landscape, rich in opportunity.” awareness. “For all of our success,” Weiss noted, “as of
May 2015, we had only 7% unaided brand awareness,
“We live in a society in which many people are looking which we like to see as a huge opportunity.”
to make healthier choices in their lives, and it turns out
that one of the very first things people change is what To bring their expansionary ambitions to life, Weiss and
they drink. It may be hard to give up pizza or burgers or his team took time to gather their fact base and build the
chocolate, but when people look for low-hanging healthy necessary, supporting infrastructure before hitting the
alternatives, high-sugar
and high-calorie beverages
[are] the first place many
people go.”
“All of this helps explain,”

Weiss continued, “why
we have such high repeat
rates. On Amazon,
for example, our high
percentage of sales coming
from subscription helped
us win their Vendor of the
Year Award in grocery.
Bai offers a solution for
many people in frequently
occurring circumstances,
and it breaks all the historic
trade-offs and overcomes
historic barriers.”
accelerator. But once ready, Bai unleashed a national ad
“Consistent with all of the decisions and priorities I’ve campaign and celebrated Super Bowl ad, fueling another
described,” Weiss explained, “we have built a great brand wave of explosive growth. It has been a remarkable
that connects with those whom we call the ‘conscious transformation since Weiss and his dad embarked on
authentic.’ As the name suggests, they’re concerned with their first delivery run and handed out the early samples in
their health, the environment and their communities. neighborhood New Jersey stores. Breakthrough comes in
These conscious authentics live active, socially engaged many forms, and none more inspiring than the amazing
lives, and they embrace products that enable and reinforce ascent of Bai. n
their priorities and values. Every Bai flavor honors a
different coffee-growing region of the world, and this
connection to places remote and exotic enables some story
building that enhances the Bai experience for consumers.
Every Bai takes them on a little flight of fantasy. Just an
aside, the word bai actually means ‘pure’ in Mandarin.”

SPOTLIGHT #3
BREYERS® GELATO
INDULGENCES™
E X PA N D A C AT E G O R Y, R E-E N E R G I Z E A B R A N D,
IGNITE GROWTH = A SWEET BREAKTHROUGH WIN
“IN THE MANY CONSUMER INTERVIEWS WE creation of Breyers Gelato.”

conducted, every single woman shared a rich end-of-the-
day story,” recalled Laraine Miller, the brand development A thinking process such as this holds a useful lesson
director for Breyers. “We were primarily looking at a very because it illustrates a simple, shared feature of many
specific moment in which there’s a married mom, kids Breakthrough Winners: They start with a question rather
have been put to bed after an active day, and then there’s than a statement. Questions open minds to discoveries,
this moment to unwind, connect with her spouse and enjoy seek surprises, embrace unknowns and loosen the grip on
a little reward. How can we make that moment special for certainty. Questions are rooted in a basic humility of not
her? What sort of experience is she trying to create? These knowing, and it is by actively not knowing yet seeking to
were the motivating questions that led, ultimately to the know that many innovators end up finding the insights that

SPOTLIGHT #3 | BREYERS® GELATO INDULGENCES™
B:8.5”
T:7.875”
S:7”
lead to Breakthrough successes.
Of course, posing questions is just the YOUR GELATO MOMENT HAS ARRIVED
beginning. “The path was not a simple
or easy one,” Miller continued. “Breyers
was suffering along with the rest of
the mainstream ice-cream industry.
The superpremium segment was the
only growth tier, and even there, many
brands had attempted, and failed, to
gain traction.”
“Despite challenges, there were a couple

of forces aligned behind us in the
revitalization of the full Breyers brand,”
B:11.25”
S:9.875”
T:10.5”
explained Nick Soukas, brand-building
director for Unilever Ice Cream. “In our
favor was a trend toward simple, real
ingredients, which aligned well with
core Breyers equity, and there was this
exciting growth in the superpremium
tier of the marketplace. But as Laraine A delicious trio of textures.
Creamy gelato, luscious sauces and gourmet toppings.
noted, premium ice cream was not
IT’S WAY BEYOND ICE CREAM.
growing, and Breyers had never broken
into the superpremium tier.”
“We had a clear business challenge—to TM
VANILLA CARAMEL RASPBERRY CHEESECAKE CHOCOLATE SALTED
revive profitable growth—and we had FUDGE TRUFFLE CARAMEL TRUFFLE
an idea about connecting with this © 2016 Unilever logo must always appear on black
special end-of-the-day moment, but

there’s a big difference between an
idea and an insight,” Miller continued. their wardrobe, social activities or home life. They found
“Our explorations drew on our success in Europe with 715799-1
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Unilever things their own—adding personal accents
J. Tucker
the Carte d’Or brand and focused on a defined consumer To Contact Us regarding
this Job, Scan this QR
Code. For best results,
UBYIBRP-52296
to places
Breyers Gelato
and
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moments
7.875” x 10.5”
of daily
J. DiSalvo
life. And each night, after
please have the
Spoon art 7” x 9.875”
and circumstance, so we formed some initial hypotheses Job Number and/or

Project Manager name
available.
J. DiSalvo
they put the kids to bed, they had an almost sacred time
around how we might create a product that would be to unwind and connect with their husband or friend or
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None relaxing and unwinding and rewarding. And these women

“Our target married moms were active, accomplished were quite certain that they had earned these rewards; they
and confident. They were happy in their lives, and despite expressed no doubts, guilt or ambiguity in their determined
all they did for kids and community, they still prized their desires!
sense of ‘me.’ They didn’t want to be defined simply as
a mom or a wife. You’d notice that these women were “Importantly, we took a very broad view of what the
constantly adding little extras to their lives—whether in ‘category’ was, because for her, it clearly included a glass

of wine or some chocolate or just putting her feet up and He went on to list three essential discoveries that the
watching some can’t-miss TV. So if we were going to do team made during early prototyping, which, he said,
something successful, it had to be relevant to this moment “sharpened our brief.”
and the desired experience, not simply differentiated from
other ice creams. So, while ice cream was not the frame “Our target consumers wanted decadent, indulgent flavors
of reference, the contextual importance of indulging and but also familiar ones. Additionally, the ideal product
connecting and relaxing fueled our confidence that we delivered across multiple benefits in addition to great
could do something special that could enhance the desired taste: rich, creamy texture; luscious sauce; and a gourmet
experiences.” topping. Finally, the visual matters. When consumers
could see the product, they had a very strong, positive
“Gelato sales were small from a category standpoint,” reaction.”
Miller continued, “but they were growing. Also, in our
consumer work, we found that the idea of gelato triggered “Each of these elements of the brief provided critical
associations that were exotic yet approachable, adult but focus and also challenges,” Miller noted. “On the product
seriously delicious—which fit well with the end-of-day formulation side, we had to identify, evaluate and secure
story that we were looking to enhance. We also found that an array of new suppliers and then figure out how to
IN TAKING THIS PRODUCT TO MARKET, WE BROKE

EVERY CATEGORY CONVENTION IN THE PRICING
AND PROMOTION BOOK.
the word gelato triggered images and internal narratives produce a sophisticated, premium experience at scale. To
among our consumer group. Gelato activates associations deliver on the three product benefits was no small feat and
with gourmet meals and memories of traveling abroad. It required investment in new technology to stream the sauce
has an accessibly elegant air to it. Gelato is a very effective all the way through the gelato rather than deposit as a layer
trigger that worked for us both as a product and an on top. The toppings provided another challenge: to find
emotive activator. a way to incorporate what was visually striking as well as
deeply satisfying to eat. Finally, we packaged the product in
“By contrast, and especially in the U.S., ice cream has a transparent container—which we had done successfully
very much of a ‘family and kids’ set of associations. One with Carte d’Or in Europe but was new for us in the U.S.—
of the critical discoveries of our consumer work was this and this made the product really pop at shelf.
revelation of how gelato works very differently in the minds
of consumers—much more adult, exotic and indulgent “Not only did our procurement, food scientists and
than ice cream. These findings helped us realize that engineers collaborate to do an amazing job, but we found
gelato wasn’t just an extension of ice cream but actually a vital champion in CFO Henry Schirmer. We presented
addressed a very different set of consumer circumstances the business case for the investment, and Henry not only
and desires.” endorsed the financial merits, but he completely believed
that if we fulfilled the promise of the initiative, we could
“We used our validated insights to develop and optimize reenergize the parent Breyers brand and bring excitement
a concept that tested well, and this energized our to the category.”
product developers to create a world-class gelato that
was relevantly differentiated. Fortunately, we had a Quick editorial aside: CFOs have a most undeserved
tremendous cross-functional team that worked incredibly bad rap when it comes to innovation. In our five years
hard on the development challenge,” Miller underscored. of Breakthrough research, we have seen many senior

finance leaders play instrumental roles in supporting bold that superpremium gelato buyers trade down. Our price
investments in growth. tests showed an optimized business case at a 1.7 times
index to ice cream, so this is what we went with, and the
“Finally, in taking this product to market, we broke in-market results validated our strategy, as we dramatically
every category convention in the pricing and promotion grew the gelato category and the total superpremium
book,” Soukas reflected. “Ice cream is a highly promoted segment.”
category, but we knew that our focus on quality, indulgent
ingredients and the product appearance would command “A critical aspect of our category development strategy
a considerably higher price than premium ice creams and involved asking the retailers to give us a full, incremental
also avoid the rampant cycle of promotion.” shelf of space,” Soukas explained. “We wanted to
command shoppers’ eyes with facings of all four launch
“The story we took to our retail partners was not an easy SKUs. Also, we wanted to shelve with other gelatos, not
one to sell, but we made the case with four core elements,” with the Breyers parent brand. This was important to signal
said Soukas, detailing each one: to consumers that this was truly new, not just a variation
on a familiar theme.”
• “A data-rich map showing that gelato penetration
was concentrated in coastal, urban pockets, revealing “So with our product set and retailers onboard, we geared
broad opportunities for geographical expansion.” up for a big launch campaign that would connect this
very novel product to this very specific circumstance in
• “The core insight around the end-of-day experience— a way that reached, engaged and motivated our target
and that this was a pervasive experience, not just one consumer,” Miller recounted. “We partnered closely with
that existed in more cosmopolitan zip codes.” our agency, DDB, both on some terrific TV and also online
video. Our launch TV creative we called ‘The Interruption,’
• “A category development business case: Most stores and it really brought the insight to life in a powerful,
had only a few, unfamiliar, expensive brands of gelato effective, funny way. Kids were in bed, and parents were
on offer. We were able to show retailers our research settling into a very relaxing, shared moment—enjoying
that while many consumers experienced this desire a delicious scoop of gelato. And then in comes their
for an emotionally satisfying, indulgent end-of-day pajama-clad son, asking, ‘Hey, is that ice cream?’ ‘No,’
experience, part of what they wanted was comfort Mom responds, not quite licking away a smile, ‘it’s gelato.’
and familiarity, and they rejected unfamiliar brands The playful ad underscores that this is not kiddie ice
and excessively exotic flavors in these circumstances. cream. It is indulgent, sophisticated-yet-accessible adult
Hence the case for Breyers.” deliciousness.
• “We always brought the product with us. The “Online, we used targeted Facebook videos that generated
strategy of “democratizing gelato” was engaging, a tremendous amount of sharing, conversation, awareness
and the business case for category development was and interest. The video showed a couple dancing and
compelling, but the product sealed the deal. The celebrating at home—again in a way that many of our
dramatic visual—with the clear container—and the target consumers connected with. The story line resonated
spectacular taste convinced our partners that we could precisely with what we’d heard from women in our initial
deliver on our transformational ambitions.” qualitative research, and it really clicked. There were posts
like ‘Were you filming me?!’ and ‘Got my plan for tonight!’”
“Retailers also embraced our pricing strategy,” Soukas
continued. “Superpremium gelatos were selling at about Results? Sweet. Year-one sales were $62 million, and
a 2.5 times price premium over the premium tier of ice sustained media support and an additional four SKUs
creams, and this gap was only expanding. Our goal was to propelled year-two sales growth of 30%. Better yet, many
pull non–gelato consumers into the category, not suggest of the buyers were new to the brand, and all of them

were paying premium prices for a brand that had historically been tethered
to mainstream pricing. “Our strategy really played out,” Soukas summarized.
FOCUS ON
“When we first started speaking with retailers about gelato, it was a growing A CATEGORY-
niche category of maybe $150 million. Now it is nearly three times as large and
growing strong.” EXPANDING
“I think there are two important lessons our organization has taken from this
STRATEGY,
success,” concluded Soukas: RATHER THAN A
• “Focus on a category-expanding strategy, rather than a share-shifting
approach. The road might be tougher, but the rewards are much greater. We SHARE-SHIFTING
are into our third year and have yet to be challenged by another mainstream
APPROACH. THE
brand. That tells you something about how you create enduring competitive
advantage.” ROAD MIGHT BE
• “Simply put, it is possible to transform well-established, mature categories
like ice cream.” TOUGHER, BUT
THE REWARDS ARE
“It is too easy and too common to think that neither of these are possible—that
it’s all a battle for share of an existing market or that a category is ‘too mature’ MUCH GREATER.
for transformation,” said Soukas. “If you believe these things, uninspiring
innovation follows.”
But thinking differently is what leads to Breakthrough success.
Gelato Indulgences’ success accompanied renewed support for the base Breyers
brand, resulting in 7% core brand growth—3X the rest of the category. In 2015,
the Breyers Gelato Indulgences team won a Renaissance Effie in recognition
of a new-product launch that revitalized a mature brand. All in all, it was a
remarkable achievement, proving yet again that when conventional wisdom
suggests a category is “closed to growth,” innovators can find opportunity,
profit, category expansion and enduring competitive advantage. It’s amazing
what can happen when you expand the world of possibilities by asking a simple
question. n

SPOTLIGHT #4
BUTTERFINGER®
PEANUT BUTTER CUPS
N O B O D Y L AY A F I N G E R O N T H I S S W E E T B R E A K T H R O U G H !
IN 2011, NESTLÉ USA’S BUTTERFINGER BASE BUSINESS did was step back and look at past insight work. When we
was growing at 10%, the classic “Nobody’s gonna lay dusted off nearly a decade of past consumer research, we
a finger on my Butterfinger” tagline was back, and uncovered an important clue to the opportunity. We found
Butterfinger’s marketing team was pushing the frontier a concept for Butterfinger Cups from 2004 that consumers
of digital marketing. “The base business was healthy,” had loved.”
recalled Jeremy Vandervoet, the marketing director, strategy
and innovation for Confections & Snacks. “But there wasn’t “There was clearly an opportunity here,” Vandervoet noted.
any innovation.” “In addition to the prior concept testing phenomenally
well, several other factors stood out:
“At the time, we were doing research to understand what
fuels the Butterfinger brand,” added Natasha Madan, • “Reese’s was the only peanut butter cup business in
marketing director, Confections & Snacks. “A key finding town; there was no challenger brand. While we had no
was that Butterfinger was beloved yet polarizing. Its interest in doing a me-too product, it was striking that
distinct taste and texture weren’t for everyone or all Reese’s owned the format outright. This was striking
occasions, and we challenged ourselves to leverage the because there are always multiple brands in formats,
love to fuel innovation.” and this is well over a billion-dollar brand.”
• “On Pinterest we found hundreds of recipes with
“We knew that we needed to focus on innovation and do Butterfinger. I remember being struck by that and
it right,” Vandervoet continued, “so the first thing that we thinking, ‘This brand has a lot of legs beyond the bar

SPOTLIGHT #4 | BUTTERFINGER® PEANUT BUTTER CUPS
format.’ Looking back, we were very biased internally, 20/20, and it wasn’t until Vandervoet spent time away from
thinking that Butterfinger is a candy bar alone. the project at leadership training when he had clarity. “We
Consumers clearly saw it as an ingredient.” had to get up in front of the class and discuss our biggest
• “And finally, across the market, the Butterfinger brand brand challenge,” Vandervoet continued. “And mine was
and peanut butter cups generated enthusiasm and this: We were sitting on a failed concept, Butterfinger
consumption.” Crave, and we didn’t know what to do. I distinctly
remember presenting it, and I kept describing it like a
Carlos Velasco, the current president of Nestlé Confections Reese’s Peanut Butter Cup or Snickers Squared. There was
& Snacks, reflected on the keys to innovation success. almost a ‘duh’ comment—‘Why don’t you just call it a cup?
“In order for innovation to be bigger, bolder and better, It looks like a cup, it sounds like a cup’—it was my big aha
you have to have robust consumer insights. One of the moment. Were we overthinking this?”
things that stand out with Butterfinger Cups is the clarity
that the team uncovered around the desired experiences “But then calling it ‘cups’ brought up all of the politics and
that consumers were seeking—in other words, a clear, other questions. Could we go up against the number one?”
actionable consumer insight.” Vandervoet explained. “Initially, there was a lot of pushback
“At the time, however,” related Bianca Suchter, then

marketing associate on Butterfinger and currently ‘WHY DON’T YOU JUST
marketing manager on Stouffers, “we were already down
the road developing and testing a double-decker bar for
CALL IT A CUP? IT LOOKS
Butterfinger. We tried manufacturing the bar twice, and we LIKE A CUP, IT SOUNDS
failed twice. At that point, realizing that this wasn’t working
LIKE A CUP’—IT WAS MY BIG
as a double-decker bar, we had to make the hard decision
to step away and look for something else.” AHA MOMENT. WERE WE
OVERTHINKING THIS?
While Vandervoet and Suchter dove into the Butterfinger
Cups opportunity, the “minis” format was taking off within
the confection industry, and Nestlé capitalized on this. With across the board. Even in my own mind, I wasn’t sure. But
the launch of Butterfinger Bites, there was no doubt that the more that I spoke with people outside of Nestlé and
Butterfinger was meant to be expanded. Madan noted, “We the project, the clearer it became.”
launched Butterfinger Bites and saw it just take off,” growing
from an initial $5 million in sales to $30 million today. Suchter and Vandervoet engaged their advertising
team, simplified the message and got to work with the
With Butterfinger Bites on its way to success, Vandervoet tremendous group of food scientists at Nestlé, including
and Suchter began their research on Butterfinger Cups. Andy Zamorski, who Suchter calls “the father of the
“Initially, we were not all convinced that we should call it Butterfinger Peanut Butter Cup.” Suchter reflected, “We
cups,” Vandervoet noted. “Snickers Peanut Butter Squared must have had 100 different recipes. We tested every level
was just launching, and we were unsure about aligning of inclusion; we tested every type of chocolate, just to get
our product with Reese’s, a billion-dollar brand already the to this final profile.”
leader in market. So we decided to test it with consumers
in our Nielsen research as ‘Butterfinger Crave,’ but “That process and that level of detail [were] the key to
consumers didn’t know what ‘crave’ meant, and the testing success,” said Vandervoet, referencing the tremendous
struggled.” number of forms, flavors and iterations tested to get to the
product available today. “So much strategy falls through the
“Looking back, this is a situation where we should have cracks in terms of execution, and it is really had to nail this
kept it simple,” Vandervoet reflected. But hindsight is design element, to know which levers to pull and what to do.”

SPOTLIGHT #4 | BUTTERFINGER® PEANUT BUTTER CUPS
“There had never been more research or thought put into a large financial investment in the launch. Part of this was
launch; from start to launch, we spent three years. Did we the Super Bowl ad. I remember when Jeremy just casually
do too much? You could make the argument that we did,” one day said, ‘What if we went to the Super Bowl?’ We both
Suchter laughed. “But we built a sustainable three-year laughed—what a ridiculous idea! But then he would bring
support plan and crafted packaging and product design, it up again, and again and again. I think that Jeremy just
with everything consumer tested and clearly thought out.” wore Doreen out with bringing it up so much, but then he
provided the strategy behind it and rationale as to what we
Now, as we’ve seen time and again, to launch true would do. So we tested out the plan with Nielsen.”
innovation, you need both the idea—tirelessly researched
and developed by the Butterfinger team—and the support Velasco noted, “We have great brands, but historically we
and shared vision from leadership. So Suchter and do not participate in the Super Bowl, and we didn’t know
Vandervoet asked their leadership team—Doreen Ida, vice if we could capitalize. Our brands are strong but so well
president of marketing during the launch; Robert Kilmer, established that we wondered whether we would get the
president of Confections & Snacks during the launch, and incremental sales to justify such an expensive 30 seconds.
Paul Grimwood, CEO of Nestlé USA—for three things But here we had a great product with great awareness—
to make sure that Butterfinger Cups’ potential became a before, during and after the Super Bowl—paired with
reality. strong execution, we had a winning product.”
Suchter recalled, “Looking back, we really credit our “After all of this,” Suchter continued, “I remember getting
leadership team to getting this right. It was mid-2012, and the updated results from Nielsen assuming a launch
we were supposed to launch in early 2013. We knew that we with the Super Bowl ad. They were nearly three times our
were on to something but had not cracked the code. original estimate. When I saw the results, I screamed and
started running down the hallway. Doreen came out and
“We could make it bigger, but we needed more time to get wondered what was going on.
the insight and product shape right. We had a phenomenal
product, but the communication wasn’t fully resonating “With all of this—the messaging, the phenomenal product
with consumers, and further, when looking at the product, and the launch plan—we saw that this could be larger
consumers were disappointed in the size. And, remember, than anything we had ever done with Butterfinger and
it wasn’t as simple as pushing a date out; Doreen and more sustainable—a big win for a brand with a history of
the team were counting on the year-one volume for in-and-out innovation. Doreen was sold, too, and helped us
Butterfinger Cups in 2013, but in a huge vote of confidence, gain buy-in from everyone else. And that was it. We got the
they allowed us to delay and moved mountains to find the money, and we launched!”
sales from other brands.
Butterfinger Peanut Butter Cups is a case that illuminates
“To go right after the opportunity, we needed internal how doing right by the research and the consumer
support to call it Butterfinger Cups and not worry about unequivocally pays off. In this case, it grew a strong idea
aligning our product with competitors like Reese’s or feel to one with more than 350% greater sales than initially
like we were going to be called a copycat. Everything that projected. Nestlé was also right that there was room in
Butterfinger does is different, so we knew that it would be the peanut butter cup category for Butterfinger; both
original.” Butterfinger and Reese’s grew at the same time.
“And, finally,” said Suchter, they needed “a huge financial We’re excited to see where else “a dose of Butterfinger”
investment to launch the product correctly.” pops up in the future, but its debut was clearly Super
Bowl worthy, and there’s nothing polarizing about a
Suchter continued, “Now that we had the product figured Breakthrough win! n
out, Jeremy went to leadership to ask them to make a very

SPOTLIGHT #5
CHOBANI FLIP™
“ C R AV E T H E G O O D ”: R E D E F I N I N G T H E Y O G U R T E AT I N G
E X P E R I E N C E—A N D T H E C AT E G O R Y
“WE SEE CHOBANI AS MORE THAN A YOGURT “We’re still very much an entrepreneurial company—and
company. We’re a natural-food company, on a mission that’s a word that gets thrown around a lot and is almost
to make better food for more people,” said Chobani’s said in an aspirational way. For us, it’s real, and it’s
chief marketing and brand officer Peter McGuinness. important. Hamdi, our CEO and founder, is the central
“Our mission is central to Chobani, and we believe it’s component to product and business decisions. He gives
the future of food. We’re driven by a very strict food the company a distinct personality and reinforces a
philosophy that we call our DNNA: delicious, nutritious, meaningful, authentic brand that resonates with customers
natural and affordable. If you look around the supermarket, and consumers.”
you’ll find plenty of products with two or three of these
characteristics, but very few nail all four. That’s always been “Historically in the U.S., yogurt has been a breakfast snack
the specialness of this brand and the food we make.” and something Americans often feel they should have but

SPOTLIGHT #5 | CHOBANI FLIP™
COST COMES IN
rarely crave. We want to change these perceptions and
redefine the role that yogurt, and specifically Chobani, plays
in consumers’ lives,” explained Senior Brand Director Scott
Bacco. “When it comes to new products like Chobani Flip, VERY LATE IN OUR
we take our inspiration from the broader world of culinary
trends.” PROCESS. WE DON’T
“We always look to more developed yogurt markets, such EDIT OURSELVES
as Canada and Europe, where yogurt is used in more
diverse ways and across a broader range of dayparts.” AT THE BEGINNING,
McGuinness added. “Through this lens, we saw a growing
presence of add-ins that were addressing consumer desires SAYING, ‘WE’D BETTER
for varied textures and taste experiences, as well as making
yogurt eating a more meal-like experience. Hamdi knew
this trend was coming to the U.S., and he wanted Chobani
NOT USE THAT DARK
to be the first and to do it right.”
CHOCOLATE BECAUSE
“The way we practice R&D [research and development] is
completely different from other food companies,” explained
IT’S EXPENSIVE.
Kai Sacher, vice president of global R&D. “I have been
in the industry for decades with a number of companies that functions as a real-world laboratory for us. We can
and across a range of countries, and the difference with constantly try new creations, interact with people and
Chobani is that we are focused on creating amazing food. get real-time feedback. This translates into the products
We have a culinary—not a yogurt—orientation. That that we create and ultimately the experiences that our
translates into having an executive chef on our team and consumers enjoy,” McGuinness illustrated. “Flip is a great
working with a diverse array of ingredients and immersing example. Is it the first yogurt with ‘sidecar’ mix-ins? No.
ourselves in the food service world for inspiration and They’ve been important in Europe for years, and there are
ideas. We also look at rituals and traditions and draw a couple versions here in the U.S., but it’s generally yogurt
inspiration for how we can incorporate them into the food and a scoop of cereal. And that’s the eating experience as
we make. We keep a close eye on restaurant and food well: yogurt and some cereal. Compare that with Flip: a
service trends in ‘high-food-IQ markets,’ looking for new totally unique food form and eating experience. Almond
approaches to recipes and dining experiences that might Coco Loco is a low-fat coconut Greek yogurt with dark
inspire us or signal an opportunity for innovation that we chocolate and honey-roasted almonds. It provides an
wouldn’t have otherwise identified. For example, the trend elevated, highly curated eating experience that is nothing
toward deconstructed desserts popping up on menus in like anything else in the category. Generally, Americans
many popular restaurants influenced the development of don’t crave yogurt, but we’re changing that with Flip.
our Flip Key Lime Crumble. Nostalgic snacks and treats Consumers crave these tastes and textures.”
such as pies and chocolate candies translated into our
PB&J, Chocolate Haze Craze, Pumpkin Harvest Crisp, and “At our Twin Falls, Idaho, R&D facility, we have a
Peppermint Perfection Flip varieties. Growth of bolder, ‘Flip room,’ which is just walls of ingredients, and we
ethnic flavors inspired our Sriracha Mango and Chipotle experiment constantly. We really focus on making great
Pineapple spicy Flips. These flavor combinations excite our food. We have a 25-person team representing eight
consumers and help take Chobani outside of breakfast in a different countries of origin, so we bring diverse palates,
very natural way.” cultures and traditions into our work, which is a powerful
source of inspiration.” Sacher continued, “It’s worth noting
“We also have our Chobani SoHo Café in New York City that R&D reports to Hamdi and not up through marketing.

SPOTLIGHT #5 | CHOBANI FLIP™
Hamdi really pushes us to make spectacular food, and shopping trips. Additionally, we are still growing at better
when we have it, he says, ‘And now we have to make this than 100% with very little cannibalization of our core line
affordable.’ But cost comes in very late in our process. We of Chobani Greek yogurt products; this is an additional
don’t edit ourselves at the beginning, saying, ‘We’d better purchase or a new consumer. All of this is obviously terrific
not use that dark chocolate because it’s expensive,’ or, for Chobani as well as our retail customers.”
‘Let’s use a crunch rather than a nut to cut costs.’ We just
don’t think or operate that way.” “After our initial launch of Chobani’s original cup in 2007,
it’s been important for us to prove that Chobani is not a
“Kai and his team developed some amazing products one-trick pony,” McGuinness declared, “and generating
with Chobani Flip, but we definitely had some challenges. our second Breakthrough Winner is a huge affirmation of
As Kai alluded, the magic is creating amazing foods that what we’ve built. We never want to lose our entrepreneurial
also deliver great nutrition at an affordable price. We are spark and agility, and we want to compete and win against
cross-functionally integrated, aligned in our values and much larger competitors. We’ll do that by continuing to
priorities, and incredibly agile even as we have grown to a redefine the marketplace and innovating in ways that
billion-dollar company. These qualities are core to Chobani address what consumers want—and we’ve got a strong
and obviously instrumental in the success of the Flip line,” pipeline of big initiatives in coming years.”
Bacco summarized.
“We redefined the yogurt industry over the past nine years,
“What’s particularly exciting about Flip isn’t just that we’re and we just recently launched our new line of Chobani
succeeding, but how we’re succeeding,” said McGuinness. Meze dips that deliver an unbelievable food experience
“Flip is bringing new consumers to the Greek yogurt with 80 percent less fat and 65 percent fewer calories than
category: 46% incremental purchasers. Flip is encouraging the leading hummus,” McGuinness noted. “Chobani is a
folks who perhaps rejected Greek yogurt initially to try the company that will continuously seek to reimagine—and
category, and once they do, we’re actually seeing very high, then redefine—the culinary landscape in order to create
50%, repeat rates and buy rates are increasing over time. delicious, nutritious, natural and affordable foods that
In other words, people try it and like it and then discover consumers love. There is tremendous change in the
additional circumstances in which they’d like to have one, industry right now, and we see a world of opportunity.” n
and so they’re purchasing more units on subsequent

SPOTLIGHT #6
DOLE® CHOPPED
SALAD KITS
TRANSFORMING BAGGED SAL AD INTO A
“ C R AV E A B L E ” E X P E R I E N C E
“CHOPPED SALADS HAVE BEEN AROUND SINCE THE “These people weren’t eating salads because they were on
1930s without receiving much attention from consumers a diet or because they felt they had to,” Arias continued.
or inspiration from chefs,” said Dole’s vice president of “Salads were the star of the mealtime show for many
marketing, CarrieAnn Arias. “Something changed, though, consumers, and this was a valuable discovery for us.
in the early 2000s in the world of restaurant chopped
salads. Recipes evolved, ingredient variety soared, menu “Fueling this trend, at least in part, was the creativity
offerings increased and new dressings proliferated. and innovation that restaurants were bringing to their
salad offerings. You could see why consumers ordered
“Not only were popular mainstream restaurants such as these at restaurants and how hard these recipes would
California Pizza Kitchen and Cheesecake Factory putting be to recreate at home: shopping for a long list of
more creativity into their salads, but consumers were fresh ingredients and then a considerable amount of
gushing about the experiences. One of the things that washing, peeling, chopping and cleanup. If you wanted a
struck us in our conversations with consumers was how phenomenal chopped salad without major planning and
much they loved chopped salads.” prep production, there was ample incentive to go to a
restaurant.”

SPOTLIGHT #6 | DOLE® CHOPPED SALAD KITS
“The net result was a widening gap between the chopped “Third, in discovering the visceral enthusiasm that
salads that consumers ordered and loved at restaurants consumers felt for their favorite restaurant salads, we made
and comparable offerings that were available at retail to a subtle, important pivot in our frame of reference. Instead
prepare in their own homes,” Arias explained. “One of of coming at the opportunity from the perspective of the
our practices at Dole is to keep a pulse on food service produce section or bagged salads, we approached the
trends as a source of advance intelligence and inspiration challenge as one of enabling a restaurant-quality experience
for the types of products and experiences that consumers at home. This shift set us apart from competitors and fueled
might want to create at home. The surge in chopped our success. Remember, we were not the first with bagged
salad demand and the gap between home and restaurant chopped salads in the grocery store, but the offerings that
offerings framed an opportunity for our innovation team.” preceded us were clearly derivative of the manufacturers’
bagged greens and vegetable legacy business.
“So we had this working hypothesis,” Arias reflected, “that
a restaurant-quality chopped salad experience available “As a consequence, many early prototypes were rejected
at home held promise, but we needed more detail. What as ‘not memorable.’ They were good, but they weren’t
exactly were the defining elements of the ideal consumer ‘craveable.’ We were experimenting with 50 to 60 different
experience? We dug in, literally. We ate hundreds of ingredients and an even greater variety of dressings, so
salads at any number of restaurants. We probably went to you can imagine how complex this product development
California Pizza Kitchen—which was a chain very much on process was.”
the vanguard of the movement 10 years ago—20 times or
more. And we spoke with dozens and dozens of chopped “There was clearly a precise target to aim for: a salad
salad aficionados.” experience that was indulgent (and consumers actually used
that word to describe their salads) but not unhealthy. There
“You know,” Arias continued, “I don’t know if we realized has been plenty of media coverage,” Arias cautioned, “about
at the time how valuable this immersion work was, but salads with more fat and calories than fast-food burgers, and
in retrospect, it was absolutely indispensable, and I think that is not where we ever wanted the Dole brand to live, and
it’s one of the huge lessons from this launch. If we had that’s not what our consumers wanted either. So yes, it was a
skipped this messy, unstructured, costly, time-consuming, ‘craveable,’ indulgent salad, but it was healthy and made you
uncertain work, we would have missed seemingly small yet feel good emotionally as well as physically.
essential details.
“Once we settled on our final ingredient formulations, it’s
“For one, we learned how truly craveable a great chopped one thing to produce something in a test kitchen, but it’s
salad could be, and it gave us a very high standard for our another challenge entirely to do it at scale. This where all
product development work. If we were going to offer the the devilish details that consumers only notice if you get
promise of a restaurant-quality experience at home, it had them wrong start cropping up like weeds. For example, one
to be ‘craveable,’ not just good. of the signature elements of a chopped salad is that every
bite offers complexity and balance in tastes, textures and
“Second was to focus on the consumer experience, not crunch. Interesting aside: Paul Newman, who played a role
the ingredient combinations, as the essential unit of in reviving the chopped salad in his iconic Westport, Conn.,
our innovation effort. Again, a seemingly small shift in Dressing Room restaurant, pronounced that a proper
perspective, but one that created a much more expansive chopped salad should be consumable with a spoon. You
view of the consumer’s end-to-end experience: capturing shouldn’t have to wrestle with a knife and fork, and you
the way that the planning, shopping, prep, eating and could never get perfect bites that way. A central idea of the
cleanup tasks all enter the flow of consumers’ lives. If you chopped salad is that every bite is perfect.
strip away all the context and flow of daily life, you really
lose the critical context in which your—or any—product “Well, all of this presents sourcing and supply chain
lives. challenges. There are then increased production costs

SPOTLIGHT #6 | DOLE® CHOPPED SALAD KITS
associated with the finer dice. And when all the ingredients sales organization to develop plans for individual stores that
are smaller piece sizes, they aggregate more densely in were both grassroots and high tech.”
a bag, so the standard pillow bag really didn’t look good,
and the visual is a huge part of the salad purchasing and “For example,” continued Arias, “we did a huge amount
eating experience. It turned out that a narrower bag worked of targeted couponing using Catalina and other retailer
to keep the ingredients better distributed vertically, making platforms so that we could convert trial into repeat and we
for a much better at-shelf visual. But these are the details could identify lookalikes at the individual store level based
that can either make you crazy but you get them right, or on loyalty card data and/or basket contents to generate
they make you crazy and you cut corners, and that leads to targeted offers. We also did co-branded advertisements
failure in the marketplace. We knew we had to deliver fully in the printed circulars and digital platforms of our retail
and perfectly on the experience. account partners. The point is that we jointly invested,
jointly created and jointly benefited in the Dole Chopped
“One other challenge is that there are ingredients, such Salads success.”
as a fresh diced tomato, that
you simply cannot do in a “This is another huge piece of learning
bagged salad. And yet that’s from this launch,” Arias concluded.
the experience that consumers “There is enormous potential to be
want. Well, it turns out that much more targeted than in the past,
with creative dressing work, and there are also great opportunities
you can create the experience to partner with retailers who have
in a different way. This is huge motivation to generate additional
another example of focusing traffic, sales and profit. When you bring
on a restaurant-quality profile, them a great story, business case and
to deliver a one-of-a-kind product, as well as a willingness
consumer experience.” to partner and co-create,
we learned that our key
“Ultimately, we developed a set accounts can be invaluable
of outstanding products that collaborators in creating
we could cost-effectively source breakthrough success.
and assemble that were ready to
go to market,” Arias described. “Now, “We have now created a runaway success that is
it’s essential to note that we began the retail transforming the produce section—selling over $100 million
customer conversations more than a year before we had in its second year and growing strong at more than 115% in
products ready to ship. And we rolled out our chopped the past year. One of our biggest challenges is to keep up
salads in a way that was unprecedented for Dole. with growth, not run out of kale (no joke!), and continue to
innovate to address consumers’ increasing demand for more
“Historically, we have done national, blanket launches, but and different ‘craveable’ salads. We will continue to stay
in this case, we went customer by customer at the store close with our consumers, who are extremely active on social
level, providing customized campaigns developed jointly media, collaborate with our retail partners, and monitor
with each customer. First, we shared our research with them evolving trends in the restaurant scene.”
and showed them the nature and size of the opportunity. We
also shared our business case analyses, which showed that The satisfaction of a perfect salad, like the taste of a
we could price at a considerable premium to the existing, breakthrough win, has a way of fueling the hunger for
widespread Caesar salad kits and bagged greens. Third, we more. That’s where the Dole innovation team is setting
invested in their stores and social media outlets in addition their sights: on the lookout for a healthy shot at the next
to the national campaigns. We leveraged our extensive field transformation. n

SPOTLIGHT #7
MILK-BONE®
BRUSHING CHEWS®
C AT E G O R Y C R E AT I O N P O W E R S B R E A K T H R O U G H I N N O VAT I O N
“IF OUR DOGS ARE PART OF THE FAMILY, HOW COME around oral care generally, but it was this pivotal question
we don’t take care of their teeth like we do for the rest of the that really focused our efforts.”
family?”
“A great question reframes how you see the market and
When I think back on our successes,” reflected Geoff the opportunity,” Tanner explained. “In this case, we
Tanner, senior vice president of growth and innovation quickly realized that the $400 million that Americans were
for the J.M. Smucker Company (which acquired Big Heart spending on dog oral care represented only a fraction of
Pet Brands in March 2015), “every one of them had this the potential market, if we could get pet parents to apply a
very specific ‘epiphany moment’—and I can remember similar mind-set and a routine that they have for their own
them—when someone on the team framed a question in a oral care to their four-legged family members.”
way that just made the room stop. It was this instant sense
of ‘That’s so obvious, but we’ve never quite framed it that “For the innovation team,” added Sarah Miller, director
way.’ of strategy and insights, “The consumer tension to solve
was very clear: ‘I love my dog, and to care for my dog’s
“In the case of Brushing Chews, we had worked to develop teeth, I’m supposed to brush them daily, but that’s just not
a robust demand landscape that revealed the opportunity realistic.’ The questions we challenged ourselves with were

SPOTLIGHT #7 | MILK-BONE® BRUSHING CHEWS®
WE QUICKLY REALIZED THAT THE $400 MILLION

THAT AMERICANS WERE SPENDING ON DOG ORAL
CARE REPRESENTED ONLY A FRACTION OF THE
POTENTIAL MARKET, IF WE COULD GET PET PARENTS
TO APPLY A SIMILAR MIND-SET AND A ROUTINE THAT
THEY HAVE FOR THEIR OWN ORAL CARE TO THEIR
FOUR-LEGGED FAMILY MEMBERS.
clear: How might we make brushing a treat? Can we make “This was not going to be easy,” said Bautista. “For
a dental chew that’s as effective as brushing?” starters, it turned out that while the VOHC recommended
daily brushing, there was no benchmark for what that
R&D director Steve Bautista, noting that the Veterinary standard was. In other words, if we wanted to develop
Oral Health Council (VOHC) recommends daily brushing, a product that was ‘as effective as brushing,’ we had to
stated, “Fewer than 5% of owners brush their dog’s teeth establish how effective brushing was first and do it with
regularly, let alone daily. Consequently, over 80% of dogs clinical validity.”
suffer from periodontal disease by the age of 3. It is the
No. 1 health-care issue for dogs. People love their pets “I need to underscore that what happened next would have
like never before, but few of them do anything about their been impossible in our company five years ago. We simply
dogs’ need for brushing.” would never have taken on such a mammoth challenge,”
Tanner emphasized. “Five years ago, we set out to build
“The facts posed a perplexing riddle,” added Nicole a world-class innovation capability. Milk-Bone Brushing
Massey, director of pet snacks innovation. “Dogs need Chews demonstrated the power of that integrated, cross-
oral care, and owners genuinely want to do what is best functional approach. Every function played a critical role to
for their dogs’ health. Yet few dog parents are addressing shape the final proposition.”
oral-health needs proactively; instead, most are relying on
costly veterinary solutions after their dogs are suffering. Bautista explained, “In order to establish the baseline
There were a few preventive products on the market, but efficacy of daily brushing, we fielded a clinical study where
adoption was low, and there was latent demand for a great we had clinicians brushing a very large number of dogs’
product at an accessible price.” teeth daily for weeks, even though we had no idea if it
was even remotely possible to meet the standard with a
“We confronted two big challenges,” Tanner reflected, nonbrushing alternative that dogs and dog owners would
“one technical and the other a commercial-positioning accept. These are the things that only happen when you
challenge. The technical challenge was to meet the claim have a company with proven innovation ability, a culture
that whatever new product we developed would be as geared for transformation, and total C-suite support,”
effective as brushing. The positioning challenge was to Tanner added.
reframe dog oral care in a human context. If we could do
both of these things, we saw the chance to transform the “Given that we needed the dogs to buy into this as well
marketplace.” as pet parents, we focused on the idea of a chew as the

vehicle for the brushing-like experience,” Bautista continued. “Once we had

our target set in terms of daily brushing effectiveness, we set out to develop INNOVATION
IS A JOURNEY
a ‘brushing chew’—an idea that didn’t exist in the minds of dog parents. This
took several years and a deep understanding of dog ‘ergonomics’ to get right.”
“This time-consuming, difficult work is hugely important context,” Tanner

OF DISCOVERY
underscored, “particularly when you recognize that this was uncertain work: We
didn’t know what we’d discover or if we could ever develop a viable commercial
AS MUCH AS OF
product. An essential lesson from Milk-Bone Brushing Chews’ experience is that CREATION, AND
we failed many, many times before we ultimately succeeded.”
BEFORE YOU
“Something we have learned from our Silicon Valley neighbors is to embrace
failure as not simply acceptable but essential. If you’re not failing, you’re not FIND THE WAY
learning, nor are you trying hard enough to create something thoroughly new
and transformational,” Tanner continued. “We did not have that culture five
THAT WORKS,
years ago. It was extremely hard to develop and will always be challenging to YOU NEED TO
sustain.”
EMBRACE THE
DISCOVERY OF
Miller elaborated, “In order to keep the momentum going month after month
and keep a team energized and motivated, you need to reframe failure as
progress. Innovation is a journey of discovery as much as of creation, and
before you find the way that works, you need to embrace the discovery of many,
MANY, MANY
many ways that do not work.”
WAYS THAT DO
Thanks to some incredible technical persistence and ingenuity—such NOT WORK.
as building a 75-degree twist into the chew so it would move around the
dog’s mouth and mimic the effect of actually brushing the teeth—Massey
summarized, “we had a product that met the claim ‘as effective as brushing.’
We then faced the marketing challenge of framing a dog-oral-care concept in a
human context, so it was intuitive and compelling to dog owners that pet family
members deserved preventive oral care, just like the rest of the family.”
Critical to the success of Milk-Bone Brushing Chews was strong CEO and
board support. As Tanner noted, “From the very start, the proposition was a
top priority for the company, not just the innovation or brand teams, and the
necessary resources were committed across the company. Further, the executive
team stayed very close to the project and helped clear a path through the
inevitable obstacles and constraints.”
“Commercial success required far more than solving the technical problem,”
explained Covahne Michaels, who headed the marketing efforts. “We had to
create a category that basically did not exist in the minds of many dog parents
and to develop a brand and messaging that brought the core insight to life. We
wanted consumers to experience our brand the same way we experienced the
‘epiphany moment’: My dog needs this!”

“Some of the main things we focused on in this phase interest and purchase.”
were package, brand and messaging,” Michaels continued.
“We looked at the heuristics of the human oral-care “On the retail side,” noted Todd Nettleton, who
category—from color to packaging shapes to symbols to at the time had been vice president of the market
understand the ‘language’ of human oral care. What we development organization, “we’d been through these
learned through our research in this phase was important: category transformation conversations before, both
The pack should evoke a high-quality, human toothpaste with Milo’s Kitchen (2013 Breakthrough Winner and
box.” featured Spotlight), which created a category of dog
treats with human-quality ingredients, and with Meow
“This would be significantly more expensive than typical Mix Tender Centers (2014 Breakthrough Winner and
pet packaging, and there were certainly pressures to featured Spotlight), which resolved the historic trade-off
economize,” Michaels observed, “but this just illustrates of wet versus dry cat food. With Milo’s, we had to send a
one of the many opportunities that always arise to cut number of senior executives to key accounts and convince
a corner when you can’t. False economies—save now, customers that our company, with no innovation history,
pay much, much more later—doom many innovation could actually deliver a new-to-the-world brand and
initiatives. In any event, what you can see today on the dramatic category expansion. This time around, we still
shelf is a pack that looks nothing like anything else in had to make a compelling business case, but it was much
the pet aisle and more like an item from the neighboring easier to get buyers to take the meeting.”
human-oral-care aisle.”
“None of this happened overnight,” added Nettleton.
“As far as the brand,” Michaels noted, “we believed “We sent full cross-functional teams to begin these
that our strong Milk-Bone equities would resonate with conversations with retailers two years before we actually
consumers, given its level of trust, quality and oral- launched, because we knew this was an idea that would
health orientation. Research validated this belief, and the take time to sell through. This was a totally new category
Brushing Chews launch leveraged these elements while and concept, but we had the research and fact base to
also extending and strengthening the Milk-Bone brand.”
“Our consumer work,” Michaels explained, “confirmed

our ingoing hypothesis that the right tone was to
emphasize the emotional connection between
dog and owner and not to make too much of the
technical aspect. The job of clinical efficacy could
be done at shelf and with the simple claim ‘as
effective as brushing.’
“In short, less was more on the technical

side when it came to advertising voice.
We led with a very effective TV
ad that just showed a guy, Ted,
with his dog, Rudy, in a simple
segment that underscored their
connection that laddered up
to the ultimate benefit of the
product. This was something
every dog parent related to, and
it worked to drive awareness,

make a convincing case for the incrementality of our that dramatically reduced waste, on the one hand, while
offering and to ensure we had the optimal retailer support also accepting the uncertainties and risks inherent to
programs in place to launch the idea.” innovation.”
“One of the biggest differences between this launch and The second mistake, Tanner said, is “believing that
our prior launches—and this is as much a comment on innovation somehow gets easier over time. It does not.
the state of technology as it is about our company— You may have a great system, but innovation is never
was the precision and data-driven intelligence of automatic. It’s not something you can allow to run on
our commercialization strategy,” Michaels reflected. autopilot, because the forces of conformity will always work
“Marketing communications have historically involved a to bend the ‘new’ to adjust to the ‘old.’
fair degree of guesstimating and accepted uncertainty, and
while it’s hardly a perfect science, I marvel at how much “We have to stay vigilant and stay hungry, because
we knew versus how much we believed in terms of our innovation strength is fragile and under constant pressure
allocations and decision making. to do the easy thing or the quick thing. But ‘quick and easy’
isn’t how you win, and we aim to keep winning.” n
“Having a unified data and analytics system enables us
to integrate addressable in-store couponing with targeted
digital advertising, for example. This was not possible a few
years ago—certainly not with the scale and seamlessness
that is possible today. We were not only able to target
certain consumers in-store, but we learned that buyers of
Milk-Bone Brushing Chews were generally heavy buyers of
human-oral-care products—an actionable insight for us
and our retail partners.”
“Looking back,” Tanner reflected, “five years ago we had

zero innovation capability and no successful track record.
As a smaller player in the industry, we knew we would
never be able to outspend the big guys, and we committed
to winning with innovation. Over this time frame, we have
built a robust innovation capability that has generated the
majority of our growth and three Breakthrough Winners. As
important, we have cultivated a culture from the top down
that embraces Demand Driven Innovation as a cornerstone
of who we are and how we operate.”
“I think there are two things that I see many organizations

get wrong or underestimate,” continued Tanner. “The first
is that an innovation system is synonymous with a stage
gate process or having a bunch of tools or analytics in
place. Strong and weak innovation performers alike all
have many of these same tools and analytics. If I look at
what changed the most at Big Heart Pet, the difference
maker was cultivating a culture—from the CEO down—
that embraced both the art and science of Innovation.
That culture translated into more rigor and precision

SPOTLIGHT #8
NASACORT®
ALLERGY 24HR
P R O V I N G T H AT A “ C R O W D E D C AT E G O R Y ” C A N S O M E T I M E S
OBSCURE A HUGE OPPORTUNITY
CONTRARY TO A COMMON ASSUMPTION, SWITCHES • Undesirable form (pervasive consumer dislike of nasal
from prescription to over-the-counter (Rx-to-OTC) are no sprays)
sure thing. There are far more failures than successes,
and the laws of Demand Driven Innovation still apply. At Nonetheless, mastering the challenges of Rx-to-OTC was
the outset, the initial indicators for Nasacort indicated an one of the main motivators behind Sanofi’s acquisition of
uphill struggle: Chattem, so the team had expectations to fulfill.
• Crowded OTC allergy-relief category across all price This would not be the first time Chattem embarked on a
points Breakthrough mission into a market crowded with large,
• Low brand awareness for Nasacort well-known brands. Allegra Allergy earned the honor in
• Low number of prescriptions at the time of the switch 2013 by resolving the symptom-relief trifecta of efficacy, fast

SPOTLIGHT #8 | NASACORT® ALLERGY 24HR
action and non–drowsiness, enabling many sufferers to “live in the moment”

with allergy relief within an hour, without the side effect of drowsiness. OUR LAUNCH
While Nasacort also plays in the allergy category, it fulfills a different “job MESSAGING
spec”—one focused on the struggles of more-severe-allergy sufferers.
These people not only endure more debilitating symptoms but also tend to
ACHIEVED THAT
experience them throughout the year, not just in typical “allergy seasons.” ‘YOU GET ME’
“If we were going to succeed,” began Shermon McMillan, director of RESONANCE A
marketing, “we would need a deep understanding of the struggles consumers
were facing with current options and what would motivate consumers to use WELL-CRAFTED
a nasal spray. Engaging with relevant consumers, we found that nasal-spray
users were overwhelmingly those suffering from moderate to severe allergies. BRAND MESSAGE
For them, antihistamines provided only inconsistent and incomplete relief.
It was these severe sufferers who needed more than what an antihistamine
CAN STIR
provided. Both the science behind allergies and physicians supported nasal WITHIN TARGET
allergy sprays as the most effective medicine one could get.”
CONSUMERS.
“While allergies are almost always bothersome for any sufferer, they can be
debilitating for the moderate-to-severe sufferer,” McMillan elaborated. “We
found that consumers were going to great lengths to combat their symptoms:
ripping up carpets to rid pollen and allergens, vacuuming pets, avoiding
outdoors in the springtime and generally withdrawing from desired activities.
In short, severe allergy symptoms exact a significant quality-of-life toll from
their victims.”
“Our consumer research identified a clear gap in the market, as well as an

understanding of why this gap existed and what the solution would deliver in
terms of a user experience,” McMillan continued.
“This is where our knowledge of the science intersected with our understanding
of the consumer.”
• The science: “Antihistamines only address one of the chemical responses

that can cause allergy symptoms, while Nasacort addresses more.”
• The consumer insight: “These moderate-to-heavy symptom-sufferers are
extremely engaged with category. They research the underlying drivers of
symptoms as well as the efficacy of varying remedies. Generally speaking,
our target customers are information hungry.”
“In short,” said McMillan, “Nasacort ‘stops more of what makes you
miserable.’ This simple phrase constitutes a fact, an insight and our tagline
all in one simple set of words. Putting the pieces together produced this
aha moment among our team, when we all were like, ‘That’s it!’ The product
truly spoke for itself, and it became immediately clear to these consumers

why their antihistamines worked only some of the time “Since awareness for Nasacort was nearly nonexistent,
and that Nasacort could offer them an improved quality we knew we needed more than just ads to educate and
of life.” drive awareness; in-store execution was fundamental
to success,” Sisson continued. “In addition to having
“The challenge,” McMillan explained, “was, given the low displays, we also created an in-store video. We partnered
equity and awareness of Nasacort, how to nail the message with retailers to secure placement of video boxes next to
and connect with consumers right from the start. our product. Consumers could press play and watch a
60-second video on how Nasacort works, how it is different
“We partnered with our Nielsen Innovation colleagues and how it stops more of the chemical responses to
to determine the best way to communicate. While most allergens that can make you feel bad. We also had a strong
positionings we came up with tested well, our winning partnership with pharmacists. Since Nasacort was the
message relied on more science than we would normally first of its kind, we knew consumers would have questions
reference in a marketing campaign. We framed the and rely on their pharmacists for answers. We equipped
underlying science, delivered by Nasacort, as the enabler of the pharmacists with talking points and coupons, so they
a better quality of life.” could help consumers make their choice and choose
Nasacort.”
“Sharing the science behind allergies gained credibility,
and showing how the science enabled desired life “Getting retailers on board was not an easy task,”
experiences created the emotional connection with McMillan reflected. “They were wary of dedicating space to
severe-allergy-symptom sufferers.
Our launch messaging achieved that
‘you get me’ resonance a well-crafted
brand message can stir within target
consumers,” McMillan affirmed.
“Our tagline, ‘Stops more of what

makes you miserable,’ was brought
to life in our TV spots,” said Holly
Sisson, senior marketing manager.
“The creative featured a spokesperson
interacting with actual physical
renderings of the words identifying the
causes of allergies. Needless to say,
these are unfamiliar words, but the
effect was to humanize the science in
a way that made the how of Nasacort’s
effectiveness clear: Nasacort addresses
a much broader array of the chemical
responses that can cause allergy
symptoms than antihistamines. Our
positioning was ‘approachable science,’
and it worked. We saw some of our
best-ever testing scores for the ad,
which also helped establish equity for
the Nasacort brand.”

an unknown brand and a ‘less-preferred’ product format. It helped that we were

coming off of the successful Allegra launch, but we still needed to work closely IT WAS RARE
THAT WE HEARD
with retailers to show them the strong potential of Nasacort. When presented
with supporting data and BASES forecast numbers, retailers bought in; we had
cleared another hurdle on the pathway to success.”
‘NO’; INSTEAD,
“To bolster awareness, Nasacort also had to pop at shelf,” McMillan noted, THERE WAS A
“not an easy task for a new brand in a small, skinny box. This hadn’t been a
concern when Nasacort was available as a prescription but proved to be both SPIRIT OF ‘HOW
a marketing and engineering challenge when launching over-the-counter. We
had to strike the right balance between creating a package that had strong shelf CAN WE MAKE
impact yet wasn’t wasteful and bulky. In finalizing the design, we worked very
closely with the engineers and the product supply team, who were responsible THIS HAPPEN?’
for producing the product and packaging. The packaging changes combined
with the dramatically increased production volumes required strong teamwork,
OR ‘HOW CAN
communication and collaboration to surmount. WE MAKE THIS
“First year out of the gate, our focus was on maximizing household penetration. AS BIG AS IT CAN
We ramped up distribution quickly, didn’t waste any time turning on media,
and offered incentives for consumers to buy Nasacort instead of or in addition BE?’
to what they were currently using. We knew the product was outstanding and
lived up to the claims we were making; once consumers tried Nasacort, we were
confident they’d be back. And our research and forecasts proved correct: very
strong trial and repeat rates in-market.”
“It’s important to underscore,” McMillan emphasized, “that the success of

Nasacort could not have been achieved without absolute commitment from
management. Leadership asked us the right questions and gave pushback
when necessary. Everyone had a can-do attitude. It was rare that we heard ‘no’;
instead, there was a spirit of ‘How can we make this happen?’ or ‘How can we
make this as big as it can be?’ We had to demonstrate to management that we
were on the right path, but we definitely had a supportive audience. This senior-
level engagement—not just permission, but active engagement—emboldened
us to go out with an advertising approach that was nontraditional for both the
industry and Chattem, resulting in an exceptionally strong launch.”
All the time and energy paid off with first-year sales of $136 million and growth
in year two. Despite competitive entrants, Nasacort continues to thrive—
reaffirming that “crowded categories” can be fertile innovation grounds when
the current options to fulfill the underlying consumer needs provide only
imperfect, inadequate and incomplete solutions. n

SPOTLIGHT #9
OSCAR MAYER P3
S E R I O U S E N E R G Y F U E L I N G B R E A K T H R O U G H R E S U LT S
“P3 NEEDS TO BE EVALUATED FROM THREE ANGLES,” more on-the-go snacking, and this posed a challenge to
began Joe Fragnito, who oversaw the development and refrigerated-meat categories—one that we wanted to frame
launch of P3 as vice president of marketing for Oscar as an opportunity,” continued Geoffrey Feil, senior director
Mayer. “First, its success as a stand-alone innovation of marketing, Lunchables, P3 & Claussen. “Back in 2010
initiative. Second, its capacity to be an extendable platform and even earlier, we were seeing a number of mutually
for protein snacking. Third, its ability to strengthen the reinforcing macro forces in the context of young adults’
relevance of the Oscar Mayer brand to young adults. The snacking habits”:
reason this is such a great story at Kraft Heinz is that it
performed on all three of these ambitious objectives. The • “As noted, snacking was increasingly displacing
team that led this did a phenomenal job from insight to traditional meal occasions.”
launch and beyond.” • “Natural, ‘better for you’ snacks with simple
ingredients were all on the upswing.”
“Habits were changing, with fewer sit-down meals and far • “[There was] growing interest in the quality of calories

SPOTLIGHT #9 | OSCAR MAYER P3
and the idea of ‘calories that work for me.’” “Trends and macro info are great,” Gunay explained,
• “Protein, as a source of sustained energy, was “but they’re too broad-brush to reveal idiosyncrasies and
pervasively relevant to consumers.” surprises. Also, you can be sure with trend research that
• “Greek yogurt’s explosive growth was kind of the every competitor is seeing the exact same thing. The one-
metaphor of the day.” on-one conversations provide an essential complement to
the more general information.”
“One of the interesting paradoxes we uncovered was
that if you asked consumers for foods high in protein, “Several years before launching P3,” Gunay continued,
you’d consistently hear about meat, but in the context of “we’d been spending more and more time with Millennials,
protein snacking, the refrigerated meat case was rarely because we recognized the opportunity for the Oscar
mentioned. Meat was an outsider at the protein snacking Mayer brand to endear itself to this important cohort.
party, but there was a potential ticket to entry for a brand We wanted to understand their priorities and, in parallel,
that brought together the three ‘original’ proteins while identify a growth pathway for the brand. Importantly, we
having the credibility as a trusted brand of meat. This was kept a broad aperture for our discovery. This perspective
a job that Oscar Mayer could uniquely do, given its equity allowed us to make some encouraging discoveries that
as the trusted brand for meat coupled with its access to the we would have missed had we framed the marketplace
HABITS WERE CHANGING, WITH FEWER SIT-DOWN MEALS

AND FAR MORE ON-THE-GO SNACKING, AND THIS POSED
A CHALLENGE TO REFRIGERATED-MEAT CATEGORIES—ONE
THAT WE WANTED TO FRAME AS AN OPPORTUNITY.
robust product portfolios of its sister brands, Kraft [cheese] through a narrow lens such as ‘meat’ or ‘protein’ or
and Planters [nuts].” ‘refrigerated.’”
“Our Breakthrough win with Lunchables Uploaded last Feil said, “One behavior we frequently witnessed was
year strengthened our use of Jobs Theory and grounded the extent to which many consumers were mixing and
us in deeply understanding the desired progress that combining ingredients to create snacks that met their
consumers are trying to make in given circumstances,” requirements. An individual might put a handful of nuts
Feil continued. “Jobs [Theory] has helped us focus on in a plastic baggie, some pieces of cheese in another and
specific circumstances of struggle, apply a very wide frame pack a piece of fruit, for example. This behavior suggested
for category definition, and address emotional and social that there really wasn’t a perfect solution for the many
requirements in addition to the functional aspects.” snacking occasions of the millennial consumer.
“To help identify potential opportunities,” detailed Kaz “Not only is there a hassle factor associated with this DIY
Gunay, the head of consumer insights and strategy, “we [do-it-yourself ], multiproduct behavior, but we saw how
maintain continuous conversations with consumers in key it frequently led to suboptimal, frustrating outcomes. ‘I
groups. To underscore Geoff ’s point, these conversations forgot to cut up cheese this morning, and we didn’t have
reveal nuances that might not emerge from more general any fresh fruit in the fridge, so I ended up eating a whole
trends research. They allow us to explore the edges of can of nuts,’ or ‘I’m bored eating the same better-for-
consumer preferences and behavior, as well as to form you snack every day, so I’ll have a bag of chips just this
hypotheses for further consumer validation.” one time’—these are less than ideal trade-offs from a
consumer point of view.”

“Through additional qualitative work, we

discovered the multifaceted consumer
THE UNPRETENTIOUS
criteria that made sense of the cobbling PROTEIN
and dabbling behaviors,” Fragnito When you’re the real deal, you
added. “From a functional dimension, don’t need artificial hype. You
have real workouts, because
consumers were looking for energy—but they keep you on track and
energy that sustained them, not the type moving forward. You don’t go
of jolt they’d find in an energy drink or to the gym to tweet about it.
And you’re not looking for some
candy bar. There was a marked preference magic elixir.
for real, whole foods, and this is where
P3 IS AN ORIGINAL PROTEIN.
most of the bars fell short: They were too No pretense, no overpromise
processed, engineered, and performance- and certainly no science project.
oriented for people who wanted whole Just meat, cheese and nuts.
That’s 13 grams of protein
foods. And while there were certainly from a source you actually
some consumers who required organic recognize—food.
and perceived superfoods, this was not
P3 delivers serious protein...
a mainstream requirement. We found a without taking itself too
broad spectrum between candy bars and seriously.
wheatgrass smoothies, and that’s where
we zeroed in.”
“Consumers were also looking for a degree of satiety that would power them
through but not fill them up,” Feil said. “Great taste was nonnegotiable, of
course, and texture variety was a game changer. An important detail here is that
the consumers we engaged liked having a variety of food forms in their snack
because of the enhanced taste and textural experience—making the snack
more fulfilling. A combination of meat, cheese and nuts has an advantage over
bananas and yogurt in this aspect, because it delivers a multisensory experience
(taste, texture, bite) that better emulates a (more substantial) meal-like
experience.”
“The challenge,” Feil continued, “was to deliver the multiple real, simple foods
in a portable format that enabled quick consumption with no cleanup.”
“Our experience in lunch and snack kits with our Lunchables brand provided
valuable expertise in the complexity of multiform assembly,” Gunay added,
“so we began to experiment with combinations that would resolve the current,
pervasive practice of cobbled-together solutions. We were optimistic that if
we could integrate all of the ideal protein-bearing foods into a single pack—
delivering the taste, texture and performance that consumers wanted—that
we could help consumers perform the job with far greater convenience and
satisfaction.”
“As we worked to refine the components of our snack kits, we faced some pretty
major operational hurdles,” Gunay elaborated. “These are the challenges that
no consumer would ever see but that you have to resolve. For example, bringing

I THINK YOU NEED BOTH SOPHISTICATED

OPTIMIZATION TOOLS AS WELL AS A BIT OF
ENTREPRENEURIAL GRIT. […] I BELIEVE IN GETTING OUT
INTO THE FIELD AND SEEING WHAT REALLY WORKS—AND
WHAT DOESN’T—WITH YOUR OWN EYES.
an allergen, such as nuts, into an otherwise nut-free facility should we launch with a mixed-SKU multipack? You really
creates challenges. We worked with the USDA to create a need to get a ton of things right, and I think it’s easy to
‘plant within a plant’ that would be the first USDA-certified overlook these details.
facility that handled nuts, cheese and meat all under one
roof. Investing in the ‘nut house,’ as we call it, reflected a “Second, and this may sound contradictory, but you can’t
major vote of confidence on the part of senior leadership run the business from a spreadsheet. One of the things
and was essential to our success.” I encouraged the team to do was get out in the field and
work with retailers and watch consumers. There’s a small
“Once you start changing supply chains and making big store near one of our plants where we’re friendly with the
capital investments and developing a new brand and owner, for example, and we’d literally take a bunch of test
working with a new pack form, it’s easy to let cost get the product over to the store and start trying stuff—with the
better of you and wind up with a product that flies off the retailer and the consumer. It may seem crazy, but I think
shelves but is ultimately bad for the business,” cautioned you need both—sophisticated optimization tools as well
Fragnito, who is now the president of Beverage and Snack as . . . a bit of entrepreneurial grit. Maybe it’s my military
Nuts. “Breakthrough Innovation poses a challenge that background, but I believe in getting out into the field and
requires a balancing between taking a long-term view of seeing what really works—and what doesn’t—with your
the business case and also being really smart about costs. own eyes. You experience something, and you remember
We had a great cross-functional team and were able to get it, but it is easy to forget the conclusion shown in a chart
this right, producing a highly incremental product from a or a spreadsheet.”
business perspective that also tested fantastically well with
consumers.” “There are challenges that, at some level, all new products
face,” Gunay added, “but given the novelty of this item,
“However, all of this upfront work still left a myriad there were few reference points to navigate or benchmark.
of decisions and challenges to address in taking this Knowing all of this, it was important to prototype and
innovative product to market,” Fragnito continued. “I can experiment, as Joe said. For similar reasons, we engaged
think of at least 10 initiatives I’ve been involved with over our creative and design agency partners early in the
the years where there was a great insight and a seemingly process, so that we would have maximum degrees of
terrific product, but somehow we tripped up in taking it to freedom for change, and we iterated our ideas to get all
market. Many of the missteps are explained by two causes. pack elements and price aligned and optimized.”
“First, there are so many seemingly small details that need “We knew we needed to work very closely with our retail
to be right: Where should we be in the store? What’s the customers,” Fragnito recalled, “to explain the product
right pack form? What’s the right pack copy? Do shoppers strategy and to make the launch successful.” He pointed to
need to be able to see the actual food elements? Does a two specific challenges:
glossy pack finish attract eyeballs or create a glare? Do we
have the right shelf set? Knowing that variety is important, 1. “Consumers were not in the habit of shopping for

snacks in the refrigerated meat section.” just beginning.

2. “It’s a small pack, and we needed it to pop visually. “And as with any launch, we’ve been learning and
How do you command shoppers’ eyes with an item optimizing as we go. Even with the most successful launch,
that is much smaller than neighboring SKUs?” we know that we have some things right, some things to fix
and plenty more to do. In year three, we are working with
“This required a combination of patience, good our retail partners to ‘mainstream’ the category; we are
communication with our retail customers, bold pack adding new combinations, expanding into new channels,
design, and strong media support. We knew we had a great further optimizing graphics and adjusting where and how
product that really fit the circumstances and requirements we communicate.”
of our target consumer.”
With over $75 million in retail sales and a 65% growth rate,
Gunay continued, “Print, TV and online advertising played P3 is off to an energetic start, and the team is fueling up
huge roles in introducing P3, giving meaning to the brand for sustained, successful growth. P3 illustrates how a new
and linking it to the target job. Our creative executions all subbrand can energize a trusted, established parent while
featured the pack, the P3 brand and the punchy messaging. connecting with younger consumers and expanding an
We contrasted P3 to lab-generated, engineered snacks that important retailer category—a Breakthrough Winner all the
many consumers were abandoning. Featuring the clear way around. n
pack with simple, whole ingredients informed consumers
of what to look for and why P3 was the ideal snacking
solution. Messaging was direct, witty and edgy: ‘Serious
protein that doesn’t take itself too seriously.’ P3 is real,
good food, and it is also good fun. ‘Unpretentious protein’
really fits the brand.”
“We launched with four SKUs and have continued to

support and expand, so that now we are up to 12 SKUs,”
Fragnito summarized. ”This is not just variety for variety’s
sake. The variety allows us to fill a broader portfolio of
consumer jobs but all within the brand’s range of protein
snacking.”
Feil reflected, “At the outset of the innovation journey, we

had a clear sense of the consumer’s ‘job spec,’ and then
we set to work to build the product ‘résumé’ in the hopes
of getting hired. When we found that things really were
playing out as hoped, it fueled our energies to double
down on P3. You could see this affirmation in the source-
of-volume data. The consumption was very incremental
to the refrigerated-meat section: P3 was getting hired over
imperfect and partial solutions.
“This business is on trend, and it is nailing an important

consumer job. We’re working with retailers to build a
snacking category in the refrigerated-meat case. P3 is
playing a valuable strategic role, and we’re really looking to
support its continued growth. It is a great start, but we’re

SPOTLIGHT #10
SALLY HANSEN®
MIRACLE GEL™
D E M O C R AT I Z I N G S A L O N-Q U A L I T Y N A I L S
“STRATEGIC CONTEXT IS IMPORTANT,” SAID JEREMY • “What makes our brand tick?”
Lowenstein, vice president of global marketing. “One of • “What are the experiences and outcomes that women
the reasons Coty bought Sally Hansen in 2008 was the are struggling to achieve as it relates to their nails?”
opportunity to take a great, trusted technology brand,
infuse it with more emotion and expand it on a global level. “The first question had a ready answer—albeit a less
than totally satisfying one. Sally Hansen was a well-
“The . . . acquisition was well timed because the recession established brand with a trusted reputation for products
actually drove a steady stream of downshifting from salon that work, based on leading technology and robust science.
manicures to DIY [do-it-yourself ], fueling steady growth Consumers trust that Sally Hansen brands will deliver
2009 to 2011. Things plateaued in 2012, and it was clear on claims, which is worth a lot in the cosmetics industry.
that we would need innovation rather than external macro Consumers are often skeptical about the relationship
forces to drive growth. We launched into this with two between price and quality and the credibility of claims.”
simple organizing questions:

SPOTLIGHT #10 | SALLY HANSEN® MIRACLE GEL™
THE
“On the one hand, this trust is a great base for innovation,” Lowenstein
reflected, “but it’s just a base. We saw an opportunity to engage at an emotional
FOCAL POINT
level and to create experiences, not just deliver cosmetic utilities. This is where
our thinking dovetailed with the second question about circumstances of
FOR OUR
struggle: What were the desirable feelings and experiences we could create,
taking inspiration from consumer insights?
“Market trends presented some clues. Just as the retail nail business plateaued INNOVATION
EFFORT WAS
in 2012, UV/LED-curable gels began to grow significantly in nail salons. Gels
offer the advantage of a more durable and longer-lasting application, but
NOT THE
they have some significant downsides, which we found to be keeping many
women on the sidelines. It wasn’t hard to see why: Curable gels required a
TECHNOLOGY
time-consuming five-or-more-step process and cost around $35. Furthermore,
when you wanted to remove the gel, you had to soak your nails in acetone for 15
OR THE
minutes and then scrape off the residue. In short, the finished look of gels was
great, but the application, removal and expense added up to major barriers for
PRODUCT.
many women.”
IT WAS THE
“The opportunity to ‘democratize’ gels was not hard to spot,” Lowenstein said.
“There was clearly a major opportunity to expand the category by addressing
EXPERIENCES
the big market of non-consumers and intermittent consumers. That said, the
barriers that depressed demand existed for a very simple reason: There was no
WE COULD
alternative technology available.”
ENABLE
“Sally Hansen’s scientists and product engineers are the best in the industry
and embraced the challenge,” Lowenstein added.
“But for us, this was always about more than a technical challenge and FOR THE
WOMEN WHO
a commercial opportunity. The reason most of us are in this business is
because, when we create great products, they enable great experiences for our
BUY SALLY
customers. At our best, we help women feel special every day. When women
pull our products into their lives because it makes them feel special, that
HANSEN.
translates into strong commercial performance, and it’s also what makes our
work so rewarding.”
“We set out to develop a revolutionary new technology and introduce an

amazing product,” Lowenstein reflected, “but the focal point for our innovation
effort was not the technology or the product. It was the experiences we could
enable for the women who buy Sally Hansen.
“We had our innovation brief: salon-quality performance, hassle-free application

and removal, and price-accessible to mainstream women.”
“But first we had to solve the technical challenge, and that really was a
challenge,” Lowenstein acknowledged.

“A great part of Coty is that we work cross-functionally reason, as I‘ve said before, goes back to our acquisition
all the time. It’s not like the R&D team do their thing and rationale and our ambition at the outset of this initiative,
flip it over the wall to marketing, who try to put a story which was to bring life, emotion, storytelling and great
to it and then ask the sales force to get the product on experiences to nail care. So how to do that?
shelves and into consumers’ hands. I think this company
decided a long time ago that we had no interest in being a “In tandem with Miracle Gel, we launched Miracle Match
commodity cosmetics company. We want to win in all four online. The idea was not only to help women find the right
segments of color cosmetics with great products, but our color for them, but to bring each color to life through the
enduring success is a function of enabling experiences that stories and personalities of seven different personas. In
make women feel special. That’s the secret to customer print, we developed nine ad units to introduce the models
loyalty and competitive advantage, and core to those and the collection along with the breakthrough technology.
outcomes is an organization that is all aligned with the Through the Sally Hansen website, women could take a
same goals and integrated across functions to deliver. All quiz that would help find the right match and introduce
of our functions integrate around the same thing: enabling the seven women who personified our initial colors. Also
customer experiences that make them feel special. online, each of our seven ‘color girls’ had 15- to 30-second
vignettes that surrounded the products with stories and
“Once we cleared the high hurdles, what we really wanted personalities.”
to do was bring nail color and care to life—infuse joy and
positive energy into a segment of color cosmetics that was “All of this enabled customers to make the experience more
experienced as more ‘chore’ than ‘fun’ by many women. their own,” Lowenstein noted, “and to express themselves
When you see how we ultimately brought Miracle Gel to on their social platforms and have some fun with the
market, you see how serious we were about bringing the amazing colors and the stories and the quizzes that, in
product to life, not just to market. total, brought a huge amount of energy to a category that
had been more hassle than fun historically.
“What our R&D team was able to achieve is right there in
bold on our home page”: “And we really made a splash at retail. We had a great
consumer story for them. We had a great product story for
• 2 steps—rather than 5—color and topcoat them. And we had a great brand story for them. We spent
• No UV light required (as is used in the salon) a lot of time with our key retail partners, and they really
• Up to 14 days of color and shine bought into the vision: why this would bring incremental
• Easy removal traffic and margin into their stores, why this was such a
powerful product, and how it would energize the biggest
“This was a transformational product,” Lowenstein brand in nail care with an unprecedented emotional energy.
underscored, “enabling millions of women to access the
same quality of nail treatment historically reserved for “Typically, new products are launched during the end-of-
the salon and with far greater convenience, ease of use year holidays, but both because of our desire to get to
and lower price. In order to match every moment and market as fast as possible and also to avoid the noise of
need, we also introduced a far wider palette of colors numerous other launches, we decided to launch off cycle
than other polishes, further separating ourselves from the and introduce the product in July. We went all out to have
mainstream. ‘stopping power’ in the store: large displays, models, great
color, gorgeous pack and compelling price strategy, along
“I think it’s important to note how easy it would have been with easy-to-understand product education.
to stop there: to bring an amazing product to market and
let the retailer and the customer take it from there. After “We worked really hard on all of these activation details,
all, we had created an amazing product that was sure to and setting the right price was a big part of the formula. At
succeed, so why spend more? Why make it harder? And the the high end of the spectrum was the $35 salon gel price.

At the low end was the historic Sally Hansen price ceiling though, and will provide a base of innovation for years to
of $6.99, which was already considered a premium price come.”
point. Where we landed was $9.99 for color and $9.99
for the top coat, or $15 for a dual pack—so you had the With first-year sales of $104 million and strong growth
two-step process in one pack—providing a $5 discount to in year two, Miracle Gel is creating great outcomes for
consumers. Sally Hansen, as well as for millions of customers. It is a
miraculous story of a tremendous breakthrough success—
“Across all media, including in-store, we had huge success definitely earning an “OMG!” celebration. n
with our ‘OMGel’ copy and engagement activities that
consumers picked up and
distributed through their own
social channels, sharing their
colors and styles with the
OMgel tagline. We have over
1 million likes on the Facebook
page and a very engaged
customer base.”
“Summarizing the Miracle

Gel launch,” Lowenstein
concluded, “it has been great
for the company. Miracle Gel
has also transformed and
reenergized the Sally Hansen
brand, as discussed, bringing
much more emotional energy
and storytelling to the brand,
making it far more engaging
to our customers. And finally,
the consumers: we know we
have made millions of women
feel special. We know we
have helped create special
moments—personal and
social experiences for our end
customers.
“It’s a great achievement,

but it’s just a great start. We
have introduced follow-up
launches that have been very
successful, and this is an
industry that never sits still,
so there’s not much time to
celebrate individual successes.
Miracle Gel is a great platform,

SPOTLIGHT #11
SKINNYPOP® POPCORN
BOOTSTRAPS TO BREAKTHROUGH
IF YOU’RE FORTUNATE ENOUGH TO SIT DOWN WITH problems,” Friedman continued. “We were eating, sleeping
SkinnyPop cofounders Pam Netzky and Andy Friedman, and breathing this business nearly 24 × 7 × 365. We didn’t
you’ll notice one word used over and over again to describe hire our first employee until September 2012, and we sold
the atmosphere during their meteoric rise: mayhem. From $18 million in that year and were at a much higher run rate
selling the first bag in August 2010 to selling the company by the time we finally hired some help.”
in July 2014, “it just never let up,” Friedman recalled
wistfully. “It was Andy and I generating sales, making the popcorn,
hand-sealing each bag, making all the supply orders. It was
“Three o’clock in the morning, we’d be thinking of things insane,” Netzky added.
and texting each other and trying to solve unfamiliar

SPOTLIGHT #11 | SKINNYPOP® POPCORN
Popcorn is a classic snack that has enjoyed centuries of amazingly delicious, but they were seriously indulgent and
popularity—hardly with the makings or markings of a not something our customers were going to pick up every
21st-century superfood. So where did this Breakthrough couple of days.”
barnstormer come from, and how did Netzky and
Friedman make it happen? “If this was going to be a bigger business,” Friedman noted
bluntly, “we needed a better business model, and that
“Pam and I met in 2007 and shared a love for popcorn,” would require a new, healthier product.”
Friedman recalled. “In our hometown of Chicago, Garrett’s
is an institution, and as much as we loved their popcorn— “Almost as soon as we started experimenting with better-
and the cheese and caramel flavors particularly—we had for-you options, we realized we couldn’t promote them
this idea that maybe we could make something even through our existing Wells Street stores alongside the
better.” cheese and caramel corns, or people would start asking
about the fat and calories in those products, and they’d
“No research,” Friedman continued, “just the two of us flip,” Netzky said. “So it was a pretty straightforward
trying to make amazing popcorn. Through a ton of trial and decision that we should develop a different name and sell
error, we developed some fantastic flavors. Great popcorn wholesale rather than retail.”
WE WERE ON TO SOMETHING BUT HAD NO

IDEA HOW TO SCALE THE MANUFACTURING OR
DISTRIBUTION. WE HAD NO SYSTEM.
is so simple from an ingredients perspective, but the kernel “We spent about five minutes sitting in a room discussing
and the oil you choose actually make a huge difference. It names until we had SkinnyPop—and we loved it. We
took quite a while, but we loved what we’d developed and hired a graphic designer, who developed the logo and bag
decided we’d give it a go.” design, which is the same one you see today—very clean
and distinctive. We ordered bags and minimal equipment
“Neither of us had any CPG [consumer packaged goods] to get us started, but we had no retail game plan,”
or food experience,” Netzky added. “Andy was a banker, Friedman acknowledged.
and I was an entrepreneur—but in the world of salons and
nothing related to this business.” “The minimum order was 25,000 bags, and we were like,
‘What are we going to do with all those bags?!’” said
Before there was SkinnyPop, there was Wells Street Netzky. “And then the day the bags arrived, it was just the
Popcorn. “We opened our first retail store in 2008, and by two of us, so we fired up the poppers and started filling
the end of 2009, we had three stores in the Chicagoland bags.”
area and distribution of bagged popcorn to a handful of
local grocery stores,” said Friedman. “We were doing well, And that’s when the ‘mayhem’ really got rolling . . .
and customers raved about our flavors. But as much as
folks loved our caramel and cheese varieties, they’d say “I remember just running into stores, shoving bags onto
things like, ‘This is the best popcorn I’ve ever had. See you the shelves, and running out and onto the next account,”
in a month!” Netzky laughed. “We really had no idea what would
happen, but we really believed in the product, and sure
“It wasn’t terribly hard to figure out,” Netzky enough, store managers were calling us back the next day
acknowledged. “The cheese corn and caramel corn were to reorder. We were on to something but had no idea how

IT’S THE CLASSIC CASE OF ENTREPRENEURS

BREAKING ALL THE ACCEPTED INDUSTRY AND
CATEGORY RULES BECAUSE THEY DON’T EVEN KNOW
WHAT THE RULES ARE. THEY START WITH AN IDEA AND
A FRESH MIND THAT ANYTHING IS POSSIBLE.
to scale the manufacturing or distribution. We had no year, we sold about $90,000 and were in 85 stores.”
system.” “We exited the Wells Street retail business as of the end of
2010, which at least allowed us to focus on one brand and
“It’s really pretty funny how little we knew,” Friedman business model,” Friedman noted. “We also outgrew our
laughed, “when it came to building retail distribution. Our limited production capacity almost immediately, and so we
strategy was Google. We started googling for distributors were able to secure contract manufacturing by the end of
of natural foods and coming up with a list of unfamiliar 2010. This change solved our manufacturing constraint,
names and just calling people. We didn’t get many but all of the sales, distribution, procurement and financial
returned calls, and those that did said, ‘Sounds great. Call challenges were just multiplying.”
me back when you get into some stores, and we’ll help
you.’ And we’re thinking, ‘The whole reason we’re calling The ‘mayhem’ was just gathering steam . . .
you is to get into these stores in the first place!’”
“It just kept going,” Friedman continued. “In 2011, we
“At the same time, we started going to some open buying sold $3.5 million. [In] 2012, we sold $18 million. We were
calls where local chains take ‘walk-ins’ pitching new exploding because we didn’t hire our first employee until
products, and we were up at Sunset Foods in northern September 2012, so it was literally just Pam and I running
Chicago suburbs, and the guy in line in front of us is a around like maniacs. Even in 2012, we had private-equity
regional distributor with some bags of potato chips, so investors calling all the time, offering life-changing deals,
we start talking to him. He agreed to come by our Oak but none of them really valued the growth potential we saw
Park office, which was a single room behind the original for the brand, and we didn’t really need the money as much
Wells Street store with one desk that Pam and I shared,” as we needed distribution help.”
Friedman continued. “When he arrived, we popped some
corn, and he loved it.” “Another key milestone came in 2013, when we sold a
minority stake to an entrepreneurial investor who brought
“He said he thought he could help get us into the 17 a six-person sales team. These guys definitely upgraded
Whole Foods outlets in the Chicagoland area,” Netzky the ‘Pam and Andy Show’ from a sales perspective, but
remembered. “Well, for us that was too good to be true, so all the other operational challenges just mushroomed as
we signed up and started popping and praying! Norman sales continued to soar,” Friedman noted. “2013 finished
Distributors were true to their word and got us into Whole with $70 million in sales and growing strong. In July 2014,
Foods and a bunch of other critical early accounts.” when we finally did sell the majority of the business to the
private-equity firm T.A. Associates, we were on about a
“Things took off,” Friedman summarized. “Early 2010, we $150 million run rate. It was almost four years exactly from
had the idea for a better-for-you popcorn. August 2010, we the sale of our first bag to the sale of the company, and it
sold our first bag of SkinnyPop. In the final months of the was basically one breathless, amazing ride.”

“Looking back on it,” Netzky reflected, “I think one “This year, we’re introducing new chocolate and jalapeño
important thing to the SkinnyPop story is the Wells Street flavors, and we think the future of SkinnyPop and the
experience, because that’s really where we made most of future of a totally new kind of food company couldn’t be
our mistakes and learned the hard lessons. It was before brighter. Pam and Andy remain very involved; they’re on
we really started growing, so it was much easier to pivot, the board of directors and [are] key advisers to the ongoing
fix and move on. We hadn’t planned it that way, but that business.”
learning phase occurs in any new venture, and far better to
do it before you start investing in scale and growth.” It’s as exciting an entrepreneurial story as any we’ve seen
in the course of the Breakthrough Innovation Project,
“They make it sound straightforward,” concluded Tom and it underscores that outsize success is possible even
Ennis, CEO of Amplify, the newly named entity under for undersize firms. We’ll be looking forward to more
T.A.’s ownership. “The reality is that nothing they did was Breakthrough Winners—if not quite so much mayhem—
easy. For example, while the snacking industry is moving from Amplify in the years to come. n
to bolder, ethnic flavors, one of the keys to SkinnyPop is
that it is lightly seasoned yet delivers great flavor. What
this means is that you don’t get ‘mouth fatigue.’ You want
to eat the whole bag, and you know what? You feel good
physically and emotionally when you do. There is no guilt
associated with SkinnyPop eating.”
“I grew up in ‘big food’ CPG companies,” Ennis continued,

“and when I look at Pam and Andy’s story, it’s the classic
case of entrepreneurs breaking all the accepted industry
and category rules because they don’t even know what the
rules are. They start with an idea and a fresh mind that
anything is possible.
“We’ve really tried to preserve that culture at Amplify

to create a totally different kind of food company. Our
products are different, but that’s just a part of it. Our
employee culture is totally atypical of the CPG industry. We
have terrific benefits, all kinds of extra programs, unlimited
vacation, minimal hierarchy and great pay.”
“Our relationship with our consumers is different, too,”

Ennis continued. “Consumers love our products and
brand and want to share their experiences online and
engage with the brand. We do this in the physical world
as well—attending all sorts of events and festivals around
the country where SkinnyPop enthusiasts convene. This
really works for the brand, because what we’ve learned
about consumption is that consumers use SkinnyPop to
make good times even better: to ‘plus up’ already-positive
experiences. So if we join them in the settings where they
want and expect SkinnyPop to be, it just reinforces the
sense that we get you and want to be part of your life.

Learn more about the Breakthrough Innovation initiative at www.nielsen.com/breakthrough.
Explore more content on a variety of innovation topics at www.nielsen.com/innovation.
FOOTNOTES
1. At a 1971 meeting at Xerox PARC, Kay said, “The best way to predict the future is to invent it.” Deborah
Wise, “Experts Speculate on Future Electronic Learning Environment,” InfoWorld, April 26, 1982, p. 6.
2. Nielsen data.
3. Christensen, Clayton M. “Assessing Your Organization’s Innovation Capabilities” Leader to Leader. 21
(Summer 2001): 27-37. Harvard professor and innovation authority, Clayton M. Christensen, developed
this capabilities model, initially referring to it as “Resources, Processes, and Values” in 2001. He
has published on this framework multiple times, subsequently revising the wording to “Resources,
Processes, and Priorities” to eliminate potential confusion over the interpretation of the word “values.”
4. For valuable thinking on these topics, see Shunryu Suzuki, Zen Mind, Beginner’s Mind (Boston:
Shambhala, 2011).
5. For more information on the Demand Driven Innovation system, see the 2013 U.S. Breakthrough
Innovation Report.
6. Calpino left Kraft Heinz in Q2 2015 and then consulted until joining Mondelez in Q1 2016.
7. McGauley retired from AB InBev in 2015 but is still actively engaged as a consultant to the company.
8. To read Clayton M. Christensen’s work on the theory of interdependence and modularity, see
claytonchristensen.com for links to various books and articles.
9. Marc de Jong, Nathan Marston and Erik Roth, “The Eight Essentials of Innovation,” McKinsey Quarterly,
April 2015, www.mckinsey.com.
DISCL AIMER
The information contained in this report is based on compilations and/or estimates representing Nielsen’s
opinion based on its analysis of data and other information, including data from sample households
and/or other sources that may not be under Nielsen’s control. Nielsen shall not be liable for any use of or
reliance on the information contained in this report.
ABOUT NIELSEN
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For more information, visit www.nielsen.com.
Copyright © 2016 The Nielsen Company. All rights reserved. Nielsen and the Nielsen logo are trademarks or
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NIELSEN

2016 U.S. EDITION

2 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

The largest consumer packaged goods (CPG) firms control valuable

Though the challenges of the present are largely artifacts of inheritance,

Copyright ©2016 The Nielsen Company 3

SKINNYPOP® BAI CHILI’S® AT HOME

MILK-BONE® NASACORT® CHOBANI FLIPTM

ARM & HAMMERTM SALLY HANSEN® DOLE®

4 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

CHEEZ-IT® BUTTERFINGER® BREYERS® GELATO

THE MAKING OF WINNERS:

 = SEE WINNER SPOTLIGHTS

Copyright ©2016 The Nielsen Company 5

WE MUST BEAR IN MIND, THEN, THAT THERE IS NOTHING MORE

Framing the Challenge: Own Your Future

I n last year’s edition of the Nielsen Breakthrough

6 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Copyright ©2016 The Nielsen Company 7

This transition is not going to be easy. For many decades, the

8 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

So about this growth: Who did drive it if big-CPG didn’t?

SMALL MANUFACTURERS ARE GROWING CATEGORIES

Rate of Annual Growth

Copyright ©2016 The Nielsen Company 9

RESOURCES PROCESSES PRIORITIES

10 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Copyright ©2016 The Nielsen Company 11

In the spirit in which many organizations have embraced “zero-based budgeting,”

Seeing a World of Many Possibilities

12 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Copyright ©2016 The Nielsen Company 13

DEMAND DRIVEN INNOVATION SYSTEM

DEMAND DRIVEN DEMAND DRIVEN DEMAND DRIVEN

LESSONS LEARNED REAL-TIME PERFORMANCE

14 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Copyright ©2016 The Nielsen Company 15

Promote consumer empathy

Fit the process to the objective

Fail valuably and learn systematically

Embrace a culture of transparency, collaboration and humility

16 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

As Geoff Tanner notes, “At Big Heart Pet, by far the

As we’ve already noted, Breakthrough Leadership isn’t easy.

Copyright ©2016 The Nielsen Company 17

18 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

LESSON 1: LEADERS ROLL UP THEIR SLEEVES AND GET DIRTY

Leaders who expect transformational innovation outcomes need to show up and

Copyright ©2016 The Nielsen Company 19

20 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

LESSON 4: BALANCE THE INNOVATION PORTFOLIO

Copyright ©2016 The Nielsen Company 21

SUCCESSFUL CEOS WILL OWN THE TOP INNOVATION TIER.

LESSON 5: LEARN METHODICALLY TO IMPROVE CONTINUOUSLY

The study conducted at SC Johnson illustrates something underscored by McGauley and

22 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

LESSON 7: REMEMBER, INNOVATION IS HIGH MAINTENANCE

Copyright ©2016 The Nielsen Company 23

DIRECTLY VERIFIABLE ELEMENTS INCLUDE:

CIRCUMSTANCE STRUGGLING MOMENTS

And they barely The value-sized bags are impossible...

Who, when, where Complication, compromise, trade-off, or struggle

WHAT DOES A JOB LOOK LIKE?

= SEE WINNER SPOTLIGHTS