PepsiCo pursues 'bigger, better innovations'

by Eric Schroeder
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BOSTON — PepsiCo, Inc. is driving “bigger, better innovations” throughout its 200 markets due to an approach that now more clearly captures unmet needs, said Zein Abdalla, president of PepsiCo, Inc., Purchase, N.Y.

In a Sept. 4 presentation at the Barclays Back-to-School Conference in Boston Mr. Abdalla elaborated on how PepsiCo uses a proprietary way of defining the consumer opportunity to drive innovation. He described the opportunity as PepsiCo’s “consumer demand space framework.”

“What we have taken is literally millions of consumption occasions and the drivers of those consumption occasions and used them to map how a consumer makes a decision about what to buy and consume against the different demand spaces,” Mr. Abdalla said.

He said demand space is defined by several factors: Who the consumer is; what is the occasion on which they are making that decision to consume; and what is the target group of who that consumer is.

By identifying the demand space factors, PepsiCo has been able to make sure its innovation is synergistic so it doesn’t get overlapped either in terms of the brand or the innovation the company is attempting to drive. Mr. Abdalla said it also has allowed PepsiCo to be clearly targeted in its innovation efforts against what are the biggest opportunities by consumer demand space, or “unmet needs,” that exist in the marketplace.

“The result of this approach and the underpinning capabilities is that we now have a global portfolio pipeline of innovation that we have transparency to across the whole company that means that we can drive fewer, but bigger, better innovations,” he said. “So we are placing a lot of activity with more focused, bigger groundbreaking type, innovation type initiatives.

“We have underpinned it with a very clear global stage gate process, which again gives transparency across the globe. So somebody (sitting) in Australia can see what recently worked in the U.S., and this accelerates the whole lift and adapt. It means that we can get innovation for many of those 200 markets simply and purely as a result of what they can lift from other scale-adjacent markets.”

Mr. Abdalla said PepsiCo now may target global platforms rather than “one-off innovation initiatives,” which means that as something works the company is able to take the technology that underpins it and leverage that technology more broadly against more demand spaces.

“Finally, the global capabilities around R.&D. and introducing new capabilities like the design-led innovation capability at PepsiCo, which allows us now to generate consumer propositions that are much more rich, much more rewarding, and much more holistic from inception right the way through to execution,” he said.

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