Twelve of the pods are dedicated toward disruptive innovation, enabling the company to shrink its innovation timeline from up to three years down to six months.
“We were a company in the past very siloed, and the pod is the opposite of that,” noted Patricio. “When I have a pod working on innovation of a specific thing, this is the only thing those 12 people do; they don't do anything else. They are 100% of their time dedicated to fix or to solve that opportunity or that problem.”
Kraft Heinz has also improved the ROI on promotions by 10 percentage points through the use of artificial intelligence, which enables it to better identify the right product mix for a region or retail location, said the CEO. The company has previously shared that it’s developed in-house technology to provide insights and recommendations in a simplified way, leveraging its elasticity model to account for both potential product and retailer cannibalization and pantry loading.
Patricio indicated at the June conference that its revenue-focused pods, when combined with leveraging AI to maximize resources, has put the company on improved footing and will help it better navigate increased promotion activity this year to compete with private label.
“We are in a very different place than we were in the past on deploying resources and with much more discipline,” he noted. “We are not going to do promotions with negative ROIs, [which] was very common in the past.”
Learn more about today’s trade promotion strategies at the Consumer Goods Sales & Marketing Summit! Held Oct. 4-6 in Austin, this year’s Summit will explore how CPGs are Redefining Success for the New Metrics of Innovation.