How Nestlé Purina Drives IoT Innovation With Next-Level Personalization

Personalization within the consumer goods space traverses many areas, even touching the lives of our beloved furry companions. In a recent discussion on developing an ecosystem of goods that meet the interconnected needs and expectations of consumers, Nestlé Purina lent a voice to the voiceless, ensuring that products in the IoT space are not only innovating on behalf of the traditional end-consumer, making their lives easier with data tracking, transparency and storage, but also ensuring that pets benefit from technological advocacy. Learn how Nestlé Purina Australia has tapped into the growing trend of smart devices with its CHEKR smart bowl to unlock the benefits of subscription services, product recommendations and personalized experiences. In the latest webinar from Consumer Goods Technology, “Nestlé Purina's Smart Pet Bet,” executives from Nestlé Purina and Amazon discussed how IoT, data-driven insights and personalization are leading a new wave of product innovation. Albert Guffanti: Hello, everyone, my name is Albert Guffanti. I'm the publisher of Consumer Goods Technology (CGT). Welcome to today’s webinar, “Nestlé Purina's Smart Pet Bet.” We have an interesting conversation on tap for today that will dive into a number of things, including how a smart consumer goods brand utilized innovation, the internet of things (IoT), and machine learning technology to put the customer at the center of operations and innovation. Pet owners often struggle to understand what food, and how much food, is right for furry family members. Nestlé Purina Australia developed the Nestlé Purina CHEKR. This connected smart bowl and the accompanying app helps pet owners better understand the needs of their pet to ensure optimal care and nutrition, all from the palm of their hand. Of course, the first thing that comes to mind for me is, how do I get one? Let me introduce our panel for today. We have Julia Foti, the e-business and IoT manager of Nestlé Purina, and Justin Honaman, head of worldwide, go-to-market food and beverage at Amazon. Julia, Justin, welcome to the conversation. We all have smiles on our faces because we're talking about our favorite things: our pets and technology and innovation. Julia and Justin, why don't we start by introducing yourselves? Provide some insight into your roles and what you do, then we'll kick off the discussion. Julia Foti: Hi, everyone. My name is Julia Foti. I'm the e-business and IoT manager at Nestlé Purina. I've been at Purina for five and a half years now. As you can imagine, I am an absolute pet lover — dogs, cats, any kind of pets, I love them. This industry is close to my heart, as well as everybody else that works at Purina. I can't wait to take you through one of our exciting products. Justin Honaman: Hi, I’m Justin Honaman. I lead worldwide go-to-market for CPG here at Amazon. I get to work with amazing people like Julia and Nestlé Purina every day, around all different solutions. I can't wait to dive into our conversation today on IoT, sensors, and pets. Guffanti: Justin, on that note, can you give us a sense of how big the pet market is? How big is the IoT market? Provide the lay of the land on that. Honaman: First of all, to prove that I am a pet lover, here are my three dogs. You can see I'm going to need three of these pet bowls. Before we jump into the product, let's set the framework for the industry. We’ll go through some stats and facts on the pet industry first, and then some stats and facts on IoT and the devices space within consumer products. I pulled this from the American Kennel Club — these numbers are incredible. In the last year, the pet industry exceeded $100 billion. Talk about a huge industry that's forecasted to nearly triple in the next 10 years. In the U.S. — and this is just a U.S. market here — there are 69 million households that have at least one dog, and that increased to 54% last year during COVID. Our pet owners are moving up the value chain on pet food in terms of looking at premium food, increasing to 41% from 37%. We’ll talk more about that shortly. Obviously, online shopping for pet food and pet products has increased dramatically. One interesting fact that I found was that 47% of dog owners have small dogs. Now, let me shift over to IoT. At CGT and other industry events, we’ve been discussing this whole IoT and connected devices space for a couple of years — it's actually coming to life in products like the one you're going to hear about today — but this whole idea of connecting sensors to the cloud and then back to devices that the consumer owns or back to the device itself, like the pet bowl, or an app on your phone and allows you to drive some of those decisions. I’m sure this number is off, but one of the most recent numbers was that there's 10 billion devices connected to the cloud today, and that's only increasing. Nobody has a good number, in terms of what that looks like, but we can all agree it's a lot and it’s only growing. Interestingly, consumer products companies have real attention to manage. Guffanti: Just to underscore that, we're talking about the pet market and the pet brand manufacturer, but our pets are our families. This applies to the innovation that we're going to talk about and the process, but it applies to any consumer brand that's looking to amp up their product innovation. Honaman: No doubt. Julia, can you start us off on a high level? Tell us about what you do from a product perspective and more about your role before we get to the pet bowl? Foti: That sounds good. As you can imagine, everyone that works at Purina are pet lovers, which creates a nice culture in the office. We have pets at work. When we are going into the office, bringing your pet in and being able to then work on pet products — it’s nice to have hand-in-hand. We have a factory in Blayney, Australia, but globally, we have researchers all over the world who are constantly doing R&D work in regards to the best products and food, but also what products are best for our pets. The work we do affects the pets we have. They’re part of our family and more people are getting pets — multiple pets. Those trends, as well as the things mentioned before, is how we ended up in this IoT space for Purina. Guffanti: Julia, can you share with us, why IoT, why smart devices? How did this idea generate within Nestlé Purina? How was it born? Foti: In short, from the research that we have done. All the researchers around the world for Purina, there were insights that started to come out, and that's what led us into this space. The first thing, of course, is that pets don't have a voice to tell us what's wrong, when something is going wrong. We wanted to dive deeper into that area and understand how to better provide insights to the pet owner. Then, they’ll have a better picture of their pet's health to be proactive in healthcare. A few other areas that came to light, unfortunately, included overfeeding. As you can imagine, there's a lot of busy households and sometimes the pets potentially get fed multiple times within a day. Tracking the food was an area that came out. Also, from a parasitic treatment perspective, have I given my pet their flea and wormer this month? When did I do it? Did somebody else in the house do it? There's a bit of confusion in that space, as well as which products to choose. The last one is holistic pet care. What do I feed my pet? When do I feed them? How much do I feed them? There's so many questions in the pet space. With insights from Google, we know what people are searching for, and can see that there's a lot of information out there around pet care. Even though that can be a good thing, sometimes it's confusing to know what the right thing is to do. That's where the IoT product started to come about. We wanted to get a better picture of a pet. Honaman: Can you talk about the collaboration? There had to be a collaboration between IT or technology and business that said, "Hey, I've got this idea for this bowl. We know our customer, we think our customers might want this, how do we leverage tech to enable it?" What did that look like in your organization? Foti: That's right. Being a pet food company, we don't have that IT part on a day-to-day basis when we are producing our food. The conversation started with the internal IT team to understand what infrastructure was in place and what needed to be outsourced to be able to set ourselves up for success. That was one of the first pieces, before diving into apps, in which the actual product set us up. That's when AWS came into the picture as well. The brief for us was very clear, in regards to starting the foundation very small, but potentially scaling quite quickly because we are Nestlé Purina. Putting out one product could quickly become many products in the IoT space, and globally as well. That was one of the main reasons why we chose AWS. We knew the ability to scale quickly would happen with ease and wouldn't have any infrastructure problems Guffanti: Julia, you had mentioned that pets don't have a voice, that we don't know when something's wrong with them. It occurred to me that attempting to find that out and serve them is the ultimate form of empathy — trying to understand their needs and wants. Justin, widening this to the broader industry, the topic of empathy is huge across consumer goods brands. They're trying to understand in real-time and at-scale, the wants and needs of the consumers. Do you see potential for this innovation in other markets of our industry? Honaman: Absolutely. This is something that’s important to work backwards from the consumer, the shopper, the customer, or the pet. In this case, what's the consumer going to potentially want? What can we design for that consumer? What do we need to collect from a data perspective to enable the decision around it internally? Then, how do we start to create a solution that might be unique and different? That's what you've seen here with Nestlé. Julia, how does it work? You went right into the tech, but how does it even work? Can you share with our audience what it is, how it works, and when they buy it, what they do with it? Foti: That little intro at the beginning was to give you a brief overview of the product, the packaging, what it looks like, so you've got something in your head. It is a simple bowl shape, but the technology that's within it is absolutely amazing. First, you start with the app, registering and inputting your pet’s information. Then, we can provide a food recommendation. That was part of the insight around what's the right food for my pet? Once the food has been recommended, the bowl is used as a scale, telling you how much to feed throughout the day. You use the bowl to make sure you're feeding the right amount. Again, that's the overfeeding part that we've tackled to ensure that it's the set amount that’s needed for that particular day. Then, throughout the day, whether you feed once or twice, however your pet eats, it will track the consumption. That means it'll track how much food has been removed from the bowl, which is essentially how much the pet has eaten. This allows you to track to make sure they are eating the right amount throughout the day. Also, for people that potentially have multiple times in the day (either morning or night) that they feed, sometimes you don't know how much the pet has eaten throughout the day. Some people like to come home and refresh the food for the night, which is where overfeeding can potentially happen as well, because you haven't tracked how much they've actually eaten throughout the day. It's all about the data there. Coming back to the app and then providing insights in regards to your pet’s eating behaviors. The other functionality that we've built within the app, and the reason behind the next part, is that we want people to have a one-stop-shop for pet needs. People have calendar reminders or a notepad to track flea and worming, vet visits, grooming visits, the microchip number, all of those areas. In a busy household, it's hard to keep track of those things. We've built the reminders into the app. The flea and worming reminders, vet reminders, grooming reminders, and also the microchip storage. It’s a one-stop-shop to go to for all of your pet’s information. Essentially, if you need to visit a vet, then you've even got data from the eating behavior that you can show the vet. It’s all in one app. That's the crux of it. In the future, we’re going to be building on our IoT product suite. This is the first product that'll be coming to market. Honaman: It's an interesting point, Julia. I have three dogs and all of them have different schedules for shots, flea and tick, all that. It's all written on pieces of paper — we're pretty organized in our house — but it's all different pieces of paper. We don't know what our chip number is. To have that, even in one place, I'm surprised there hasn't been a solution for that. I could see collars, all kinds of potential. Foti: Exactly, multiple people in the house will have access to the same app and be able to click through different pets, if your household has multiple pets. Each pet having its own profile, those functionalities are coming in the future — won't be for the first release — but we're thinking about how to optimize along the way for different household scenarios. Guffanti: This is interesting. This is not just a pet thing, but a consumer brand thing. It's a personalization story. There are a lot of layers to this. We talked about how pet owners can use the data for their pets, but how is Nestlé Purina using the data for its own efforts internally — marketing, product introductions, and things like that? Foti: The data is an important part for us. There are a few different aspects. One, at a simple level, is to use the data within marketing to make sure that you know about any future products that come up that are right for your pet. There's many different marketing signals we get from our day-to-day lives, but very few of those are personalized to your specific needs and, in this case, your specific pet. That's how it will be used in the marketing sense. For example, potentially outside-of-the-house triggers such as weather, when it's hot. It gets extremely hot in Australia, the data that comes back to the pet owner would be around making sure they're getting the right amount of water for the day, making sure they're staying cool throughout the day, etc. Also, around things like New Year's Eve when there's a lot of fireworks. Many pets have anxiety with those noises. Again, insights coming back to the pet owner to remind them and provide tips and tricks around what to do with their pet during that time. These are outside-of-the-household triggers that use the data to give the pet owner insights. This is data that's coming directly from the pet. Some additional features of the bowl in the future would be around dental health. For instance, if we notice the pet is eating on a particular side of the bowl, moving around the bowl, wagging their tail, or certain behaviors, all of that information can come back to us to be interpreted into potential issues, or dental issues. For example, if they're scoffing their food they're not actually chewing and getting in the different areas of their teeth, which kibble is also designed to do. Then, there could be dental issues that come later on in life for the pets. Again, they don't have a voice. It’s usually not until the pet has a certain trigger, that there might be something wrong that you can treat it. Whereas we're trying to be proactive about health and that'll stop a lot of things from happening before it gets too far as well. We compare ourselves to having a newborn baby because the baby can't tell you if or what is wrong; you have to try and interpret. That's where we're headed in this space. All this information is coming back to give the pet owner more digestible information. We don't want it to be too complicated or anything like that, we want to digest the information and then relay the best thing for the pet. Honaman: Well, I don't know about you, but I didn't even think about all those things — how the dog eats in the bowl. I put food in the bowl and it's gone as fast as possible. It’s fascinating. As you were developing this, how did you know this was going to work? Did you get customer feedback? Did you ask some customers today if they want this? What did that look like as you were developing this? Foti: We hoped it would be successful, that's why. We've been doing a lot of testing in this space and have been in development for quite a few years now, but there's so much involved in making sure it’s right. We didn't want to put a product out there before doing all the vigorous testing, consumer testing, project team testing — and we are about to begin a pilot with Nestlé staff The learnings that will come out of that ensure that we optimize along the way — the pet owners aren’t being used as the guinea pig for that. That research will be done before the product goes into the hands of the pet owners. Honaman: How did you come up with the name CHEKR? It's got a cool sound, but how did you decide? Foti: The Purina logo is actually a checkerboard. Yes, the checkerboard. It started from our legacy logo, but because of the different aspects of IoT, we thought it could play nicely in the health checker space. It’s about health checkers and making sure it's all about monitoring the pet. The checker part worked nicely in that space. Guffanti: Julia, again, I'm viewing this from the category of consumer goods brands. I'm interested in learning. This is clearly a story about how you've gotten more embedded into the lives of your consumer and your ultimate consumer, the pets. You're clearly embedded into their day-to-day lives on a very intimate level in some cases. How has being so close to your consumer benefited Nestlé as a company? Foti: That's a good question. It always comes back to personalization. In this day and age, with the marketing that we see, a lot of the personalization is around putting someone's name on an email, or putting the pet's name on the bowl. Those personalized aspects are nice and bring you closer to the brand. We have not only food, but also a care side of our business as well. We have grooming tools, training tools, leads, collars, beds. Holistically, we have everything you need for your pet. A lot of people get a little bit confused about what the right product is for their pet because there's so many products in the market. You want to wash them with the right shampoo or you want to use the right lead, collar, harness, a muzzle even as well. There's so many different products and the behavior of pets can sometimes be a little bit unknown, or things might change throughout their life stage. That's when the personalization and data from this particular product will ensure that we can provide that to the pet owners. When we talk about first party data, a few people get a little worried about how much data companies are now getting from us, but it's not something to be scared of. It allows the company to provide the best products for you and your pet at the right time as well. It takes the confusion out of pet ownership as well. The business benefit is capturing so much information from our pet owners, but the value exchange is that we are providing consumers with the right information to be able to be a better pet parent. Honaman: You see that across industries, too. In the travel industry, you provide a lot of information, they know a lot about you, but they provide better service. Health apps, you're exercising, doing Peloton classes and whatnot, and they're providing better service. You could go down the list. You're seeing more and more of that, especially across consumer products. Building on Albert's question, think about the Nestlé Purina set of brands — put on your Nestlé hat for a moment — incremental revenue for some of the other tangential products that you offer. In other words, we're going to build a loyal following on our app with a smart bowl and therefore sell more pet food and whatnot. Is that some of the thought as well? Or what do you think about that? Foti: We have a suite of products that we offer in the whole pet space. We have the Purina store that we sell directly to consumers, you can set up subscriptions, so you don't forget the food every month or however often you need it. Not sure if many people are aware, but we obviously have Kit Kat, Allen's, Uncle Tobys, Milo, Nespresso — there's so many brands under the Nestlé umbrella. For the future, once we are set up with all of this data, it would be great to cross-collaborate with those brands, to bring the whole suite into the household. Then, obviously, they're more for the pet owner, whereas our products are for the pet. Holistically, that's such a nice story. Guffanti: Julia and Justin, does the smart bowl link to a loyalty program for Nestlé Purina owners? Foti: Yes. The app is linked to our Purina store, where we have products listed for sale. Within that, we've got a subscription that you can set up to auto-deliver to your house. A lot of people want to take the worry out of accidentally getting to the end of the food bag or needing something else for the pet. You can set up the subscription and have that automatically triggered and delivered directly to your door. As part of that, there's the loyalty behind percentage off, as being an ongoing Purina member. Guffanti: I would imagine this also extends the life of your customer as well. Rather than having to go to the store each time and perhaps try a different brand if they can’t find it, or something like that, you’re able to keep them with you in a consistent, predictable way. Foti: That's right. Every company would love to have someone on subscription because it's a rolling purchase, essentially. It gets delivered straight to your door and, from a business perspective, you've constantly got that person purchasing your product. As you said, when you go into a store, there's so many different factors at play. Subscription is important for us. It also makes sure, from a pet perspective, that they're being fed one food. For some pets, it's not great to switch to different foods and different brands. It goes back to the pet's health and making sure they're consistently on the same diet. Honaman: From an industry perspective, every day we're working with large and small consumer products companies worldwide, it's almost like a renewed interest in loyalty programs. I hate to call it that because if you're thinking about card programs or other, but now that there's app-based and other ways for CPG brands to connect to consumers. Over the next year or so, it's going to be interesting to watch our industry to see how loyalty comes back to life in new ways. It's driven by a lot of digital natives and people like you, Julia, that are engaging in direct-to-consumer programs. There are many brands listening today that are thinking, "we should do this. We have this idea." What are some of the tips, tricks, or advice you'd offer and how have you brought this to life within a big CPG organization? There are others listening that want to do these types of programs. What advice would you offer? Foti: Firstly, it's definitely not easy. Even though it's a fantastic product and we can't wait until it's on the market, you have to be dedicated to the fact that it may take a bit of time to set yourself up. Going into it, we knew that was going to happen. The expectation was already set that this could potentially take — depending on your speed — years for us. We have our five-year plan that we will be building on the environment as well. The more and more users that you have coming into the brand and using this product, you need to make sure that the environment's set up. We've seen a few instances in the news around different areas like Black Friday crash or things around COVID where a lot of people were using a certain platform at one time. You don't think it's going to happen because it's on this little device and you think, “oh, it can handle it,” and then something happens. You hear about it on the news, so it’s important to have a stable infrastructure and be partnered with the right companies. That was an important piece for us, starting in this space. Also, listening to your consumer. A lot of people say that, but we've done a lot of research in this space to make sure that the features and benefits included in this version of the bowl and app were features and benefits that the pet owners would use. We want them to use every feature. Sometimes tech products are very over-spec'd. Human instincts don’t know how to use a lot of the technology. Even with my phone, Apple watch, or things like that, there's so many features that it becomes overwhelming, and I'm within this space. A lot of people don’t use all the tech available in products. We were very conscious not to over-spec the product. We wanted to make sure the pet owners were using every aspect of the bowl and every aspect of the app. There weren't any hidden little tips, tricks, or things in there that they weren't using or didn't know about. That's part of the research piece, making sure that within the pilot — when we do that over the next few months — that people are using all the features and benefits within the app. If they're not, maybe rethink if you actually need that there if it’s not being used It's okay if it doesn't have pages and pages of things that it can do. It's staying true to your core. We always came back to our vision of what we were trying to achieve, which is to give pets a voice through technology. Once we kept saying that to ourselves, it was staying true to that within the brief and making sure we weren't going too far. Guffanti: Justin, if one of our audience members wants to get started and wants to do this, what's the best way for them in terms of the technology part of it? Honaman: The first part is that technology is important, it's the enabler. You have to start with the use case, what's the business value assumption for the customer — in this case, the pet owner. Then, work backwards from there. If we were working with an idea, we think we have a product that could work, that would make the lives of the pet owner better — great. That's your use case, then work backwards from there. What would be a part of that? Let's brainstorm all the possible ways to leverage a more dynamic relationship with our pet owner. You can come up with a lot of the use cases you heard from Julia today, how can we enable that? Now, IoT and smart devices are in a place where it makes a lot of sense — there's the tech and infrastructure to manage large volumes of data in a very cheap, inexpensive way. That wasn't the case a couple of years ago. All of us in the industry know that has been one of the biggest enablers that allows things like this to work. Then, on top, there's analytics happening. We didn't dive into this today, but the interpretation of data isn't somebody with a spreadsheet or access database at Nestlé Purina. There are analytics happening to be able to show insights, trends, advice, and perspectives to the actual pet owner. That area has evolved dramatically as well, with the capabilities around advanced analytics, AI, machine learning, etc. The buzzwords that we talked about for many years are now real. Again, thinking in the mindset of potential use cases, work backwards into some of the details of what the experience would be that you want your customer or consumer to have. What data do you need to support that? In other words, what data is there available today? What data might you need to be able to enable that? Then try it out, do a proof case. Don’t do a year and a half project to find something that didn't work. That's the model that we're using. It lines up nicely with what Julia shared. Julia, anything you'd add based on what I just laid out? Foti: That's 100% right. Get the product and the app, or however you're combining those two, into some kind of market. We are doing a pilot with the Nestlé staff, for example. People that haven't been as close to the project as myself and my project team, getting other people using the bowl and the app. Then, after that, we're actually going to another audience, which is our breeder network. We have a very strong breeder network that we're associated with, and it's getting them involved in the next testing piece. It’s like you said, Justin, get it into people's hands as quickly as possible and you’ll learn so much, instead of just sitting in a room and jotting everything down that you think they need. In terms of the analytics, we are doing a piece with AWS at the moment in regards to dissecting all of the data that's coming in, even connected to the Purina store as well. The full loop of the purchase, how do we dissect all that information from an analytics perspective as well? It’s really important. Guffanti: Julia, one last question that we all have: Where can we get it? And when can we get it? Foti: It’s the most anticipated product, I feel. As I mentioned, we are doing a staff pilot at the moment. That's Nestlé staff, Q2 2022, will be the breeder pilot, trialing with them. Then, finally, after that in Q3 it will be launched to market. Happy to get everyone informed when that hits the shelves and you can go out and grab it. Guffanti: Well, this has been a fascinating discussion. There are so many layers that apply to so many types of consumer goods organizations. I anticipate there's a lot of learning coming out of this. Julia, thank you so much for sharing your story with us today. Justin, thank you also for participating in the webinar and supporting this important discussion today as well. Thank you to our attendees for carving out some time to hear this story. Thank you again and we hope you have a great rest of your day. Take care.

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