For a company with so much history, change has been a constant at Kraft Foods Group, especially of late. From the late fall 2012 split of Kraft Foods into Kraft Foods Group Inc., which owns the North American grocery business, and Mondelçz International Inc., which focuses on some of the high-growth but currently lower-revenue markets, to the new innovation strategy put in place by vice president of breakthrough innovation at Kraft Foods Group Barry Calpino and the hiring of Peter Borowski, head of design at Kraft Foods Group and who, perhaps, is best known for his role in the creation of MiO’s category-changing design.
As part of our Design Matters video series, we caught up with Calpino and Borowski at Kraft Foods Group’s headquarters outside of Chicago to discuss innovation, design and developing environments and teams that support these branding initiatives. Here’s a sneak peek at what they had to say:
PD: What is the role that design plays at Kraft?
BOROWSKI: For many years, design at Kraft was treated as execution. I often thought that this type of approach viewed packaging as gift-wrap. Now, design plays a more important role. Because design is involved earlier in the process, and now that we are working with Barry and his team, design plays a major role in brainstorming, innovation, thinking and developing innovative solutions.
CALPINO: The big headline is, ‘We’ve made a big shift where design fits.’ It used to be a backend executional step, and we’ve brought it upfront to become a very fundamental core strategic element of the innovation process.
We’ve done more than just task our teams; we said to all the teams across the company that design is so important to your success or failure. You need to invest the time; engage Peter, all the other leaders across the company and the outside agencies we work with early; invest time for design early on in the process; and give design the attention it deserves.
This approach has a big impact on our results.
BOROWSKI: We’re bringing strategic thinking into the process. It’s what’s needed, and what’s made a big difference.
PD: What does a great success look like at Kraft?
CALPINO: I’ll give you two specific examples that embody what we’re trying to constantly teach at Kraft: P3 and MiO.
Our Oscar Mayer business has a new big launch this year called P3. It’s a protein snacking project. For this launch, we discussed with the Oscar Mayer team that package design and structure will be critical. That it must be one of the earliest and most important things you work on.
And they did. They moved design way up and did much more thoughtful work than what they could’ve done downstream. The result is a fantastic package from both a functional standpoint but also from shelf impact standpoint. The launch is off to a very good start as a result of that thoughtful effort early in the process.
We’re also very proud of the MiO business which Peter worked on. MiO created an entirely new category! The package itself helps communicate, convey and establish the brand promise. MiO was an entirely new brand, an entirely new category and an entirely new behavior for consumers.
MiO was a big ambitious project but it’s led to more than a $200 million new brand that’s won every innovation award that you can think of, and the package work that they did upfront again with the team is one of the top three reasons why MiO broke through during its launch.
BOROWSKI: To build on that, with MiO, we weren’t just designing a packaging; we were creating a new brand. We started with the goal of creating something very breakthrough that would appeal to the millennial consumer. We were actually building and developing a brand. From an innovation standpoint, MiO hit a 10 or 11, as Barry mentioned. The MiO design alone is remarkable in that it doesn’t follow any category norms, e.g., using the expected category cues like fruit on a package. We wanted to be disruptive at shelf.
PD: MiO is a very good example of holistic design and development. How important is not breaking package design out from the rest of the marketing strategy?
BOROWSKI: It is very important. With MiO, we introduced brand architecture as a guideline. This is important to create consistency when you’re building a brand. Consistent unifying elements hold a brand together; differentiating elements help communicate the different product offerings. Brand architecture helped us establish a consistent look and feel for the MiO base product line, MiO Fit and MiO Energy. The design language helps consumers easily shop and navigate the brand.
PD: This naturally brings up the idea of brand extension. Can you tell me about Kraft’s brand extension work?
CALPINO: There are so many examples of companies that haven’t done this well because they don’t respect the brands that they own and they focus too much on a specific project. At Kraft, our No. 1 competitive advantage is all the brands that we have. Those are our crown jewels.
Ninety percent of our innovation comes from leveraging the equities that we currently own. The ability to take these brands and smartly, wisely and strategically extend them is at the absolute core of what we do as a company. Doing this well will make all these brands bigger and stronger.
There are so many examples we could share with you, but here are the two I love the most. Kool-Aid: Going into liquid concentrate takes everything great about Kool-Aid and pushes down on the accelerator. That package celebrates why Kool-Aid is such a great brand. The tiny package is even shaped like a pitcher of Kool-Aid.
Then, we have this brand that’s been around forever called Velveeta. People perceived Velveeta as old, nostalgic and gathering dust. We brought it back to life with Velveeta Skillets. The different products celebrate what’s great about Velveeta, so that brand extension makes the brand stronger.
That said, when you extend a brand poorly, you can actually hurt the brand. But when you do it well, there’s nothing better because then your core business gets stronger and your extensions grow the business.
BOROWSKI: Let’s delve into equities and assets. An equity is what a consumer plays back to you. An asset is something that you can leverage, overtime, that can become an equity.
We’re making sure that we’re not losing our equities. Barry mentioned Kool-Aid Liquid Concentrate. We leveraged our brand equities so shoppers immediately recognized the product as belonging to the Kool-Aid brand. I’ve seen many brands not utilize their equities which can be an issue for the brand and the consumer.
Kraft has many powerful brands, so we’re leveraging our equities, including the heritage of these brands.
PD: A good example of this is your package redesign for Kraft Macaroni and Cheese. It’s very recognizable to brand fans, but at the same time seems fresh and new.
CALPINO: It’s the absolute classic example of keeping a brand relevant but making all the changes grounded in what makes the brand great to begin with.
Every person who sees that design and communication, which by the way fit together beautifully, has the same reaction: This is exactly how I think about Mac and Cheese.
The package design celebrates what’s great about brand, but yet updates it, and this is the most beautiful thing you can do to keep a brand continuously relevant over decades and decades.
BOROWSKI: I agree, that’s a great example because we leveraged the noodle as a brand equity for Mac and Cheese. The noodle became a unique, proprietary and iconic symbol on pack.
The other key to Mac and Cheese’s success is the relationship between the design agency and the advertising agency. I credit the design agency for developing and leveraging the noodle and the advertising agency for recognizing the huge opportunity in this strategy. The ad agency took that noodle concept and successfully leveraged it in advertising and other communication vehicles.
PD: Do you have any advice for younger business executives who want to someday lead design or innovation for a company?
CALPINO: I have two pieces of advice that I often give junior marketers:
One is to never stop paying attention outside the office, whether you’re in the grocery store, watching TV or walking down the street. The best ideas typically come unplanned and from where and when you least expect them.
My second piece of advice comes from some training I received early in my career on a book called "The 7 Habits of Highly Effective People" by Stephen Covey: Seek first to understand.
When I’m in a group of talented people such as Peter, I try to be the one who asks the questions and listens versus talking about myself. People who come into a big company, such as Kraft, early in their career, like to do most of the talking versus the listening. I always advise people seek first to understand and you’re going to be ahead of the curve.
I gave this feedback to someone I’m mentoring within the company now, and she gave me feedback that since she’s had a profound change in all of her interactions since she’s focused on listening first.
BOROWSKI: Be prepared, take more risks and keep it simple. In my career, I have taken calculated risks with my projects and they’ve paid off, for example MiO. Being prepared means undertaking extensive category research, competitive audits, reviewing trends and understanding your consumer and their needs.
Keep it simple and don’t over complicate things—less is more. I always seek clarity and alignment in meetings to avoid disrupting and derailing the creative process.
PD: Peter, your advice speaks a lot to being respectful of everyone’s bandwidth. Barry, I read an article that discussed how you’re using this awareness of people’s bandwidth to ensure projects deliver high quality results. How important is editing the number of projects?
CALPINO: I know it’s counterintuitive because so many of us are trained that to prove our value we need to be able to say I’ve got 100 projects or I’ve got 50 projects versus I only have five.
When I started in this role at Kraft, we had 100 $5 million new product launches. I said, ‘Why don’t we just have 5 $100 million launches?’ In a big organization, the power of reducing the number of projects to focus on a few very big opportunities and put all the talent against those few opportunities is unbelievably powerful.
The MiO example is one we always use. The team for MiO was told: stop doing everything else in your job except making the MiO launch great and creating that new business. All their other projects were cut out, and they were 100% focused on MiO.
It’s not a coincidence that MiO was a huge success. It’s the power of focus! We found that our new product revenues are double—but with fewer new products launches, than what they were four years ago.
This is also one of the mantras of our CEO Tony Vernon. Fewer, bigger, better. Probably something we were taught at some point in our careers. This was our chance to make it happen in a big company. It’s one of those concepts that people often will talk about but to do it isn’t easy. It’s a lot easier to get caught in this—i.e. ‘I’m good because I have 100 projects’ mentality versus ‘I have three great high-impact projects.’
Package Design Matters, a multi-media thought leadership series in print and online, where, through the generous support of our sponsors, we speak with some of most innovative minds in the branding, design and marketing of consumer packaged goods.