How to succeed at Innovation Prepared for the FDIN Brand Innovation Seminar 24 th January 2008 Learnings from the Launch & Management of Kellogg’s Nutri-Grain Bars

2 Kellogg’s Nutri-Grain developed out of a US product called Smart Start  The concept of a ‘bar to start your day with’ researched extremely well  But it took a long time to get the product right 1.Persistence: If you have a great idea keep working on the product or service until you can deliver the concept

3 Per Capita Consumption by Age 1992 and 2002 Kellogg’s took a Consumption problem & turned it into a Strategic Opportunity

4 Kellogg’s identified a social issue: Young people were increasingly likely to skip breakfast  Breakfast was still important to them  And they were still hungry without it  But hectic lifestyles meant they simply ran out of time in the morning  They ate on the way to work or at their desks 2. Define a clear Strategic Opportunity: What is the Target + their Problem? What Benefit / Solution do they need?

5 For a time though, Kellogg’s were side-tracked on whether to launch Nutri-Grain as simply a tasty, yet healthy snack But this had 2 disadvantages:  Lack of differentiation vs. other cereal bars  Lack of Kellogg’s credentials in snacking

6 Kellogg’s ultimately made the right decision to position Nutri-Grain as ‘The best solution to a missed breakfast’  Relevant & Motivating  Differentiated  Uniquely deliverable by Kellogg’s 3. Perfect your Strategy: Make it Relevant, Differentiated, Deliverable

7 For Kellogg’s the ‘missed breakfast’ occasion was a way into a far larger prize: the snack category itself  Snacking identified as a key growth opportunity  Kellogg’s formed a Convenience Food division  Nutri-Grain Bars acted as a spearhead  Soon followed by other Kellogg’s cereal bars 4. Entering a new & highly competitive category you must carve out your own niche first to build credentials for later success

8 The ‘Missed Breakfast’ strategy also contained an element of ‘Patterning’  With food & drink, patterning or linking to a specific occasion is important  Helps people establish routines  Kellogg’s exploited it again with the launch of Nutri- Grain Elevenses 5. For food & drink build some ‘Patterning’ around an Occasion into your Launch strategy

9 Kellogg’s really understood their Target & communicated strongly to them  A morning food survey enabled them to understand the size & nature of the market they were entering  The Target was clearly defined: – working adults, in urban areas, hectic lives & frequent breakfast skippers  And Target insights generated  Focused & humorous presentation

10 ‘Missed breakfast’ insights were the focus of all communications & Kellogg’s spent £8 million in first 2 years 6. Build fresh consumer insights into your communications & make sure the Target sees them

11 Out of home communications were key

12 Kellogg’s dominated transport media including Taxis

13 And Tubes

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15 And unusual media were also used 7. Communicate at Point of Need as well as Point of Purchase

16 The launch had to deal with the ‘health issue’  The brand needed health credentials  But making it sound too healthy would: – Put off the ‘Mainstream’ consumer – Attract a very health conscious one, who would not appreciate the food  The solution was to use the name ‘Nutri-Grain’ to signal health  But to limit the healthy references elsewhere

17 And also the Product perception issue  The soft product made people think it was stale  Foil wrap packaging although more expensive signalled freshness  Now Kellogg’s describe the food as ‘soft bake bars’, dropping the descriptor ‘Morning bars’ in 2005  So the Name was used to solve the ‘health’ issue whilst the Packaging worked to improve product perception  The rest of the elements of the Marketing Mix communicated the main positioning of ‘Best Solution to a Missed breakfast’ 8. Give every element of the Marketing Mix a definite role to play

18 Kellogg’s used their skills honed in grocery distribution to quickly build distribution in ‘Impulse’  Nutri-Grain had to be available where people were missing breakfast  Nutri-Grain Bars were launched in the Impulse sector in May 1997: – By August they had 74% distribution here – Within a year they had 15,000 new distribution points 9. With a brand stretch make sure that distribution matches the new proposition

19 Constant innovation is needed to maintain Nutri- Grain as a strong brand  After launch Kellogg’s developed the concept of an ‘Innovations Calendar’ – challenging themselves to deliver an innovation every 6 – 8 weeks  These included: – Specific health messages such as ‘More Calcium than a quarter pint of milk’

20 There have been many new variations  New flavours such as ‘Cherry’  New ingredients such as ‘Yoghurt’  New formats such as Nutri-Grain: – Twists – Minis – Chewy Bars – Yoghurty Bars  New occasions such as – Children’s lunchboxes – Elevenses

21 And innovation continues today  As well as the original Nutri-Grain (now described as Soft Bake Bars) & Elevenses there are: – Nutri-Grain Oat-baked bars – In November 2007 Kellogg’s announced new Nutri-Grain Soft Oaties  The positioning has evolved away from ‘Missed breakfast’ to an emphasis on taste backed by healthy ingredients 10. Use an Innovation Calendar for continuous innovation

22 Recap of Learnings from the Launch & Management of Kellogg’s Nutri-Grain Bars 1.Persistence: To find a product to match a great idea 2.Define a clear Strategic Opportunity 3.Perfect your Strategy 4.Carve your own niche when entering a new category 5.For food & drink launch with some ‘Patterning’ 6.Communicate strongly with fresh consumer insights 7.Communicate at Point of Need as well as POP 8.Give everything within the mix a defined role 9.With brand stretch get the distribution right 10.Use an Innovation Calendar for continuous innovation