PepsiCo Continues to Revolutionize
its Approach to Product Innovation
Food & Beverage
PepsiCo, one of the world’s largest food, beverage and snack companies, needs no introduction. In recent years the industry has widely acknowledged that when it comes to harnessing data and advanced analytics to drive innovation, PepsiCo is charging ahead.
A New Opportunity: Product Innovation Planning Needs to Reflect the Increasing Complexity of Consumer Preferences
Each brand in PepsiCo Beverages North America division was using data intelligence and analytics to conduct its portfolio strategy. However, they largely did it in isolation—the iced tea brands planned out its strategy based on future demand for iced tea, the soft drink brands on future demand for carbonated soft drinks, and so on.
“It’s hard to ignore how dangerous tunnel vision has become in today’s landscape of rapid fragmentation and proliferation, coupled with consumer sophistication. We set off to build a solution to make projecting the sideways views core to portfolio innovation planning.”
— Abby Finnis Senior Director – Portfolio Insights and Analytics at PepsiCo.
Whilst successful, the team believed that larger market trends were taking hold that would affect each of the individual categories and that understanding consumer motivations in the larger beverage ecosystem could yield exciting new product directions that had not yet been considered.
To reach this level of insight PepsiCo recognized that it needed to consider product attributes as drivers of innovation. This included features, ingredients, nutrients, packaging, colors, textures and smells that didn’t fit neatly into or transcend prescribed categories. The team also recognized that it needed to be able to link these attributes back to consumer benefits (i.e. ‘immune health’ or ‘indulgence’) in order to better understand the connection between them—something its existing retail market intelligence providers were unable to do.
The Portfolio Insights & Analytics Team Builds Its Own Solution—With the Help of Skai
PepsiCo had recently created a new Portfolio Insights & Analytics team whose purpose was to provide insights in support of a broader, cross-portfolio strategy rather than at a brand level. They would help the brands to identify white space opportunity areas and inform the rapid development of concepts to capture those opportunities. In support of the challenge to provide attribute-level insights, one piece of work stemming from the team was the development of a proprietary framework consisting of five innovation platforms that tracked the market from the attribute perspective and utilized the data to form a new view of the landscape of the future. Initially, the team collected and fed data into the framework from multiple external data sources but the approach was piecemeal and they looked for a more systematic and scalable way of doing it. This is where Skai (formerly Signals Analytics) came in. Skai not only connects countless external data sources (social media, patents, product reviews and more) in one single platform view, it classifies it around a standardized taxonomy to provide contextual intelligence down to the attribute level. This is not something they previously had the capability to do and has allowed the team to:
- Surface and evaluate attribute-level trends across categories using insights from across the consumer, competitive and product landscape
- Dive deeper into the origin and evolution of specific trends
- Discover how categories influence and impact each other to gain early intelligence on the movement of trends across categories
However, the solution really came into its own when it was configured to align with PepsiCo’s proprietary ‘Benefit Zones’. Now, as well as having cross-category attribute-level insights to hand, the team was able to link these attributes back to consumer benefits in order to understand how and why consumers are interested in them. This customer-centric lens made the wealth of insights more actionable across the teams and fleshed out a set of innovation ‘dig sites’ complemented by extensive data on ingredients, flavors, nutrients etc.
“Our ability to integrate our proprietary framework with Skai in order to map attribute level insights to our Benefit Zones is a central feature of our offering.”
— Jessica Yankell Sr. Manager, Innovation & Portfolio Transformation Insights at PepsiCo.
Utilizing the Platform for its Next Billion-dollar Brand
Most recently, the Portfolio Insights & Analytics team utilized the platform for a project for bubly, the sparkling water that PepsiCo wants to turn into its next billion-dollar brand. The bubly product team requested insights into the functional benefits and functionally driven attributes in and around its product categories. The team used Skai to look at the sparkling water beverage market and sparkling water categories. They uncovered a set of attributes consumers saw as potential benefits—such as energy and digestive health—for bubly to begin concept ideation, development and testing around.
“The value of Signals Analytics goes beyond what we can measure. It has helped us to build an entirely new capability and surface granular insights we’ve only ever dreamed of having access to before. These insights shape the future direction of our business and that is immeasurable.”
Jessica Yankell, Sr. Manager, Innovation & Portfolio Transformation Insights, PepsiCo