Although at first glance they may not seem to have anything in common, gourmet popcorn brand Joe & Seph’s and FMCG giant Essity agree that the pandemic has made innovation more important than ever.
The pandemic has completely overturned the idea of what innovation is for business. Overnight, entire revenue streams ceased to exist, while new consumer needs rose to the top of the corporate agenda. Business models changed, new products emerged, and brands willing to invest in innovation began to break away from their risk-averse competitors.
For gourmet popcorn brand Joe & Seph’s, innovation became even more important with the onset of Covid-19. Prior to the crisis, the company was getting a “slice” of its business from theaters, movie theaters and airlines, which disappeared overnight. What’s more, many of the packages it sells were designed with these markets in mind.
For a brand with product innovation at its core, in the context of Covid, the business model itself began to become a source of innovation.
“We had to do the famous ‘pivot’ and focus more on DTC and online,” explained Adam Sofer, co-founder and director of Joe & Seph, speaking yesterday (June 9) at Marketing Festival: Fast Forward.
“We already had a platform in place, but it was about developing it further and making popcorn subscriptions. We also paid a lot of attention to Easter and the creation of a chocolate-shell popcorn Easter egg.”
Knowing that the entertainment and travel market would eventually return, which Joe & Seph’s sees as a removal of restrictions, the team thought about how it could use its kitchens to develop new products.
Typically, kitchen teams spend two hours a week per person coming up with different products to keep new ideas flowing. For example, Joe & Seph’s Bakewell Tart popcorn variety released in May was the result of development done in isolation.
We had to do the famous “pivot” and focus on DTC and online.
Elsewhere, the sales department was putting out ideas on how to increase the turnover of the online business.
“We didn’t fire anybody, and in fact the salespeople who had historically run theaters and movie theaters and airlines became part of a larger team focused on how we could make online better,” Sofer says.
“We had a really interesting set of ideas from different perspectives about how we can make online better. With Covid, innovation has become even more important to our work and will really continue to be an important part of what we do over the next few years.”
Covid-19 also served as an innovation gas pedal at Essity, a global health and hygiene company. Within six weeks, the company had developed a face mask under its Tempo fabric brand. At the same time, Essity’s Tena brand launched the Tena SmartCare plug-in device to help people caring for relatives at home understand when they need to change their incontinence product.
The company also began selling washable underwear directly to consumers, which brand vice president of development Gael de Talouet called “a completely disruptive business model” for Essity. He believes the speed with which the team has been able to bring these products to market is a testament to the company’s courage and its conviction that it is acting in the best interest of consumers.
“We’ve used these difficult times to get even closer to our consumers. It’s been a great experience to be closer to their state of mind,” de Tagliue said.
“All of us have had to live in confinement at different stages, so all of our brands have embraced it to do what we can to make people’s lives easier. It was an excuse to make the way we do marketing and the way we innovate even more human.”
Essity sees innovation as a means of creating organic growth, encompassing everything from new products and services to “taboo-removing communications.” De Talouet pointed to how Bodyform’s feminine hygiene brand (which is known as Libresse in other markets) was the first to screen real period blood and depict the intimate female anatomy.
“The brand’s innovations are also services. We created a service called Tork Easy Cube, which offers real-time cleaning data, allowing users to know where and when to clean the bathroom,” he explained.
“We’re also looking at how to innovate with data, and that’s part of our growth model. Three years ago, we became the first company whose marketing campaign was completely driven by artificial intelligence, and it’s inherently innovative. And we created our digital hub, which optimizes campaigns with live data.”
When Joe & Seph’s started ten years ago, its main goal was to create the most delicious gourmet popcorn. As a result, innovation focused on improving every element, from the cooking process to the caramel coating.
The focus then shifted to pushing the boundaries of flavor, resulting in the brand teaming up with Unilever to create the Marmite variety and creating the world’s first popcorn with gin and tonic.
While in the initial stages, the brand was largely product-driven, as it grew, it became customer-driven.
What we’re seeing in the process of strengthening our brand is a willingness to take more risks.
“A supermarket or a customer in a store might say, ‘I really need product X, and if you make it, I’ll put it in,’ and because you’re so eager to grow and never say no as a small business, you tend to do it, but often it’s not necessarily the right products. Often it is, but often it’s not, and really what we’ve come to now is where we need to be-though we often veer back to those other two phases-is to be much more consumer-focused,” Sofer said.
The innovation process has gotten even faster, with Joe & Seph’s entire team, from production kitchens to marketers, now under one roof. An idea can go from experimentation in the developers’ kitchen to tasting at headquarters in one day.
The process is certainly different at a corporate giant like Essity, though de Talhue believes the differences have less to do with the size of the organization and more to do with capital intensity.
“A lot of times when we create something radically new, it means we have to build a new plant, or a new line, or buy a machine, and it’s a completely different process,” he explained.
“When we released our first toilet paper without a cardboard core, the idea sounds brilliant, but you have to be able to produce it, and how do you create a roll without a core? It’s much better for the environment, and our consumers love it, but we need to be able to produce it. We have to be able to transport it.”
The risk is relative.
Risk-taking may have gone out of fashion in the context of the pandemic, but the cultures of Joe & Seph’s and Essity are still far from risk averse.
When developing a new product, a popcorn brand commits to going to market to the public or buying a booth at a consumer show. The team has even been known to go to a supermarket and put the new product on the shelf to see if customers will put it in their carts.
Because these trials are small, Joe & Seph’s can sometimes use someone else’s equipment or rent it, for example, to experiment with new packaging instead of buying a new machine.
For de Talhue, risk is a relative concept. Going to market for six weeks with a range of face masks might have been “fundamentally risky,” but the importance of the project made any sense of risk disappear.
“What we’re seeing in strengthening our brand is a willingness to take more risk, and in a funny way, if you ask our senior management, they’ll say, ‘We have to take more risk.’ And if you ask anybody in our country, in the marketing or R&D or commercial teams, they’ll say, “It would be great if senior management took more risks.” We’re really talking about the same thing, we just need to label it so that we can act on it,” he said.
“The way we encourage this is that first we say, ‘One size does not fit all,’ and that’s how we work at Essity. We believe we need to win locally with our local consumers and customers, and then our big innovation projects, which can be capital-intensive and require a certain process, have to be treated differently than smaller or strategic projects, where time is critical.”
Essity is currently working on an agile vetting process to empower employees to develop innovative thinking. De Talhue cited the example of the Tork Paper Circle initiative, which collects used paper towels from universities, offices and attractions and recycles them into toilet paper. The idea came from the team sitting down with customers and looking for solutions.
“That’s how we look at risk-taking. Basically we take opportunities, start small and make sure we work together with our customers. That’s how we take risk and use our culture and people to make it happen,” he added.
Small businesses can learn from giants like Essity to build on their strengths and “not try to do what a big company does,” de Talhue advised. Startups should focus on leveraging their core differentiators and reinforce the narrative element, he said.
The advice from Joe and Seth is that collaboration is king. Sofer believes that large corporations should collaborate more with smaller companies, as Joe & Seph’s did with BrewDog by creating a range of popcorn to pair with their beer.
The gourmet popcorn brand previously teamed up with 20th Century Fox to create a product to promote the movie “The Greatest Showman,” and in honor of this month’s Euro 2020 tournament has teamed up with Budweiser to develop beer-coated popcorn.
There are a lot of cool things you can do, and while you may not have the internal capabilities of a big company to do it – the team, the speed or the factory – there are smaller businesses that will be very happy to help you do it.” Collaborative efforts often produce great results,” Sofer added.