Leader.co.za

Reimagining consumer insights at PepsiCo

by Vishal Garg and Tom Fleming: strategy+business
Stephan Gans, PepsiCo’s Chief Consumer Insights and Analytics Officer, wants to bake real-time, data-rich insights into the food-and-beverage giant’s commercial decision-making processes.

It might come as a surprise that the man responsible for revitalising a core business function comprising about 1,000 professionals at one of the world’s largest and best-known companies admits it was his first-ever job in the field. “I’m a marketer - I’d never worked in consumer insights before,” says Stephan Gans, Chief Consumer Insights and Analytics Officer at PepsiCo. But his fresh perspective and “insatiable curiosity about humans” have helped Gans and his global team reimagine what the consumer insights function could be, while defining and building a new set of skills to get there. Today, for example, Gans’s team codevelops market-facing insights tools with an ecosystem of third-party agencies - an approach that would have been unlikely (if not impossible) before his arrival.

Yet when Gans joined PepsiCo in 2017, he found a disjointed situation. “We had a lot of very talented, hardworking people all doing their own thing,” he explains, “and there was really no incentive to connect efforts globally. We were missing what I like to call global might for the local fight. We needed to use our global skills collectively in a way that adds value to local markets, and we needed to build common tools and capabilities to do that.”

Gans recently talked with strategy+business about how the role of consumer insights is evolving, his vision for an organisation that thrives through the creation of real-time, data-rich learning loops, and the competencies needed to energise and empower a global team.

The following is an edited version of the conversation.

What does the broader consumer insights landscape look like, and how has the function changed over time?

In our business, the drivers of competitive advantage used to be related to physical scale. But those advantages have melted away - not entirely, of course, but competitive advantage no longer rests on physical scale the way it once did. Today, competitive advantage is about who has the most data, and who can leverage it the best for increased consumer understanding and better commercial decision-making.

Likewise, marketing used to be a very linear, sequential set of processes. And in that world, consumer insights could afford to be both a testing and a measurement function - testing ads and getting feedback, measuring what’s working, and creating reports. Today, of course, marketing is far more digitalised and data-driven - a real-time sport. Therefore, consumer insights must become a real-time sport as well. We need to stop thinking about testing, and we need to start thinking about learning. We can’t afford a culture of going from one test to another; we need a continuous-learning loop - based on behavioural data - that’s part of the commercial decision-making process.

How do these learning loops operate in the context of consumer insights?

Think about it this way: let’s say we can understand why consumers in 35 places around the world buy certain types of products for a party where they’re going to watch a sports match. If we can digitalise that understanding and access that data from all angles, then every time we add a new market or a new occasion, our understanding of the collective gets sharper. It’s turning scale into a competitive advantage again, but in a very different way. As an insights function, if we manage our data well and collect it smartly, and set up strong processes and systems to share it, then we can create an advantage from what we learn. Every time one of us learns something, all of us can get smarter.

If that’s the goal, let’s talk about the starting point. When you joined PepsiCo, what was the insights function like? What challenges did you see?

As an organisation, PepsiCo is as flat as a pancake. Business gets done in our operating units all over the world, and our business is very “local-for-local” oriented. As we often say, potatoes don’t like to travel - which is true, because it’s not good for the quality of the potato. For this reason, we have potato-chip factories in almost every individual market. Sometimes, things are as simple as that.

We have business units in more than 100 markets, and we also have insights teams in around 75 markets across the globe - today, it’s about 1,000 people in all. When I joined PepsiCo in 2017, our people were doing consumer insights work, but we were not leveraging their capabilities across the organisation. We had a lot of very talented, hardworking people, all doing their own thing with a very local-for-local focus; and they were supported by a mix of big, [third-party] market-research conglomerates that were set up in the same way, also local-for-local. And there was really no incentive to connect efforts globally.

What we were missing was what I like to call global might for the local fight. We needed to use our global skills collectively in a way that adds value to local markets, and we needed to build common tools and capabilities to do that.

Did you face any resistance as you got started?

Sure. People are inherently resistant to change. But where we got lucky - and I could say we were savvy in figuring it out, but really, I think we got lucky - is that the tools from external vendors that our people were working with were just really outdated. Our people are professionals who wanted to do a great job, and many felt they couldn’t. We tapped into that core of discontent.

To meet the need, we started with seven different specific capabilities. The proposition to our colleagues was this: if we pick things that collectively represent a big chunk of what you spend your time on, and we can find a way of working collectively as a group of leaders that run this function globally, then we can find a way of working that delivers you tools that are faster, much better at catering to the real-time market, and a lot cheaper. Would you be interested? And they were.

What are some examples of these capabilities?

One example is the optimisation of creative work, including advertising - whether it’s online, a banner ad, a TikTok video, or a full-blown ad on YouTube or TV. We have a set of tools that you can bring to any challenge in that area.

Another capability is need-based segmentation. There is a finite set of human needs that don’t differ much from country to country, and there’s a set of consumer needs, or what we call need states - such as what kind of snack or drink people want at different times throughout the day. We deploy need states–based segmentation in many markets across the globe in a very similar way. The need-state map differs slightly per market, but we have one language for talking about how it works and how to use it.

Then there’s a whole set of tools around a capability called the always-on engine, focused on understanding what is just around the corner. If you listen to what people talk about online in a smart way, you can predict what they will want when summer comes, for example, or in six to eight months’ time. You can anticipate the next culinary trends, the next flavors.

Can you speak to how the tools themselves are developed?

Sure. But let me back up first. The consumer insights industry is basically an oligopoly. There are a handful of huge, mile-wide players, and then hundreds of smaller firms that are inch-wide, mile-deep specialists. My thinking was that if we really want to change the game, we’re more able to do that with the smaller, specialised firms that are more incentivised, agile, and ambitious. Let’s build something with them. So we built a series of partnerships where we jointly created the IP and the consumer insights tools. And we are happy to sell those tools to other companies that don’t compete with us - there’s been huge uptake. It’s not only a learning loop but also an entrepreneurial approach, with money coming in that has enabled us to accelerate the journey we’re on.

What is unique is that PepsiCo provided us with the space and the entrepreneurial spirit to basically get on with this. I have peers in the industry who say, “Yeah, it sounds interesting, Stephan. I would never do that, because I just want my people to focus on the business we’re in.” I believe that for the best functional specialists - not for all, but for some - it can be really interesting, really motivating, and inspiring to contribute to changing an industry.

So, you’ve got these new tools and a collaborative ecosystem model to create them. Now what? How did implementing the tools turn out in real life?

One challenge we faced was mindset. Our consumer insights teams had historically worked for the marketing teams with what you might call an order-taker mindset. But the marketing leaders, innovation leaders, and the business leaders really didn’t want that. They would say, “We’ve got all these smart people; I don’t need them to be order-takers. I want them banging on my door about what they think we should be doing.”

We realised that we needed to train people in various skills or competencies that they could bring to the party every day to be really effective with these tools. Otherwise, people were using the new tools but working in the old ways - they were spending too much time getting the questionnaire right or overanalysing the data before they dared present it to the marketers. Or they would wait until they got invited to a meeting, when they had something to say, instead of sticking their feet in the door.

What sorts of competencies did you prioritise?

It’s about three things - being intentional, being brave, and making it simple. For example, one way of being intentional is to understand that every project has three stages: the work before the work, the work, and the work after the work. If you want to be a business partner, not an order-taker, you need to spend most of your time on the first and last stages.

The work before the work is about really understanding what the situation is and defining the problem. We had to train people who were spending 85% of their time on the work, like running tests, to instead spend 10% of their time on that and be much sharper on understanding the question and learning from the dataset.

We also had to encourage people to be brave and work with the data themselves, instead of hiding behind a [market research] consultant - which is something insights people can fall into the habit of doing. When you digitalise a capability, you can take a stab at looking at data yourself. When it comes to making things simple, this is more important than ever, given the onslaught of data and information that everybody is exposed to.

What’s an example of how all this comes together - the new competencies and tools? What sorts of things can the team do now it couldn’t do before?

We spend a lot of time now on what we call meta-learning. We take a step back and look at all the data and say, “OK, when we create ads that leverage a Gatorade-sponsored athlete, it actually works best in certain markets if we do the ad in this particular way.” It might be better if the athlete is female or male, or it might be that a particular sport works better. The lessons can be superpractical, allowing us to say to our colleagues who do sport marketing, “Hey, for your next campaign, think about these specific things. Here are PepsiCo’s five golden ‘rules’ of leveraging a sponsored athlete in an ad.”

Let’s change gears and talk about your experience thus far in leading the effort. What was your approach, and what have you learned?

The mistake that a lot of companies make with appointing functional leaders is that they make the best surgeon head of surgery. But the best surgeon should perform surgery, because that’s what she or he is really good at and gets energy from. I am by no means the best surgeon. I am not a rocket-scientist insights person. Absolutely not. What I think I bring is a combination of genuine interest in the space, genuine interest in people, and an insatiable curiosity about humans. I have a solid experience base as a marketer, which means I brought the ability to look at this business through the lens of the people that work with the output, instead of the perspective of an insights person. I’m a marketer - I’d never worked in consumer insights before.

Still, I knew I could drive one collective vision of what this function could be. Everybody had good ideas, but they were always too busy and too locked up in their own business units to actually elevate that. I was able to paint a picture for people, and say to consumer insights leaders, “Become a member of the global insights council that we’re going to start. We’re going to have one global agenda, jointly decide on our priorities, and collectively build a set of capabilities that are going to make your and your team’s life much better.”

Where are you on that journey?

We’ve created a great floor in terms of great talent, great capabilities, and with our credibility within the company. But we’ve only just begun. We had a big team meeting in December [2023] for the top 125 people in my function; and I plucked a picture from Instagram from early November - a guy standing by the New York City Marathon course to cheer on the runners. His sign said: “Due to inflation, the finish line is now at 33 miles instead of 26.”

I liked this, because first, it made me laugh, and second, that’s the reality: the finish line keeps running away from us. And that’s great, because that means there’s an incredible appetite for consumer insights to step up more, to be that real-time strategic business partner that comes at the right moment, with the right processes, and with the right consumer insights to challenge and inspire the teams. Because markets are only getting more and more competitive.

Vishal Garg is a thought leader in the marketing transformation practice with Strategy&, PwC’s global strategy consulting business. Based in San Francisco, he is a principal with PwC US. Tom Fleming is an editorial director of strategy+business.

Useful resources:
strategy+business
© PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. No reproduction is permitted in whole or part without written permission of PwC. “strategy+business” is a trademark of PwC. www.strategy-business.com.
Share on Twitter Share on LinkedIn Share on Facebook
Share via Email
©2024 SURREAL. All rights reserved.
Follow us on Twitter Follow us on LinkedIn Join us on Facebook