From Mouldy Whoppers to Old Age Cows - Fernando Machado, NotCo CMO

0:28Welcome back everybody to Uncensored CMO. many, many times. In fact, he's been awarded so many times I almost lost count. So it was a great chance to catch up with Fernando and find out what makes a great creative marketer. Was that Maldi Whopper campaign actually worth it? And why do they sponsor Stevenage after all? And what is he doing now working for a plant-based company? And what's the future of AI? This is a great conversation with a truly successful CMO who has been there and achieved so much. I think you're going to enjoy this one. Fernando Machado, welcome. Thanks for your invitation.

0:59I'm excited to be here. Pleasure. Now we're back here in Rio, town of your birth, I understand. Exactly. I grew up here, like I lived here for about like nine, ten years. It's always good to be back. I still have great friends here. I'm still crazy about my soccer team, or let me say football for the guys who really like soccer, not get angry at me. Yeah, so it's just awesome to be on the Web Summit. First time the Web Summit's outside of Europe. I've been to the Web Summit in Europe before, so it's great to see the Web Summit happening in my hometown. Great. Well, we're going to talk CMO stuff, because obviously I'm sensitive to CMO as it is.

1:32You've won quite a few awards, haven't you? I mean, I notice you've got Forbes top three most influential CMOs. We've got Adweek, Grand Genius, even. Business Insider, top 100 most innovative and fast company, top 100 most creative. Just a few of the awards you've won. Let's start with influence. So what makes an influential CMO? I don't know. I think that doing good work, maybe. Look, I mean, I'm super proud of the recognition that we've got, because it's never like a one-person show. I think I was fortunate enough to work with incredibly talented people on my team, with CEOs that believed on the work that we are doing in marketing and allowed us to do the stuff, like with the agencies, the creative agencies that we partner with, the design agencies that we partner with.

2:19And yeah, I mean, every time we get recognition, I think it's a bit of like the consequence of the work. Without the work, there is nothing. And without the results, the work will probably not last much. So I think one may become an influencing person on his or her area or subject matter by doing good work, work that drives results. and gets people attention. It's never the objective, like to get recognition or to influence. Like I'm much more focused on doing the work and mentor my team and create a culture that values and believes in creativity. And I think that from there, the work comes. And then if recognition comes, that's great.

3:04What would you say is the toughest thing about being a global CMO and doing the kind of role you do? I think the hardest thing is to be able to influence people and influence the organization to do what you think is right. To understand like how things work, to understand how the market works, to understand consumers, but especially to be able to create a plan and make that happen. It's a good question because like I thought a lot about over my career, I thought a lot about like what does it take to do great work, you know, and in In the beginning, I thought it was criteria. You need to have good criteria to decide things.

3:48And then I saw people who I saw doing consistently great work, but they were not great at their criteria. Then I thought, well, maybe they trust others, right? I mean, so they have a great relationship with people who have criteria. And then I saw people who that was not it. You know, like they were not trusting and they don't have criteria, but still they do great, great work. Or actually, I saw people who had criteria, had great partners, but were not able to do great creative work, mainly because they couldn't influence their organization. It is not easy at all. So that to me is like why that to me is the biggest challenge, that for someone to do the type of marketing work that I admire, I know that it's never easy.

4:37And it's not like kicking an open door. And if it looks easy, congrats to the person who is doing the work because it isn't. You say you're right, actually. I've got a theory that actually there are two hidden Ps for a CMO, right? Politics and persuasion. Because when you get to a certain level, you realize you're no longer doing the job, are you? You're overseeing everyone else that does. And your job is to give permission and create the environment where other people can do it. And like you, I've seen situations where someone has been amazing and yet they haven't got the recognition they deserve.

5:08Equally, I've seen people that are really not that good, but they're just brilliant at managing the kind of reputation and so on. But I mean, it's probably an under-recognized skill of a CMO, isn't it? To navigate the organization, get them on board with where you're going, create permission. I think the bigger the organization gets, the harder that will be. The more geographic footprint the organization has, the harder that will be. I think you need to find what your sweet spot is. you know like what do you like what you don't like uh you need to i if you can to work on a place that people share the same ambition especially creative ambition it's easy to talk everyone says like oh i want to do a great job yes i'm brave yes let's go for it but when push comes to shove that's not really what happens you know so i think you really need to think about when considering where to work.

6:04And it's tough because usually people consider where to work by doing a couple of interviews. Sometimes you have a friend on the company and you can talk to the person, but it'll be like one or two people max, right? And you don't know how it really is like in that office. And I think that if you can find a place that you share the values, you believe on the purpose, that you believe on the product or service that they provide, and that you are aligned when it comes to the ambition for the business and especially for the creative, in my case, it dramatically increases your chances of being happy on the place.

6:42That makes so much sense because actually when we interview, we're often thinking so much how do we impress the organization. We probably forget to go, well, actually, is this organization the right fit for me? Am I going to give me permission to do the kind of work I want to do? Ask to talk to people. Yeah. Can I meet some of the people who are going to be my peers? You know what I mean? Just to get a feeling and really dig in and see who you know. Maybe you know someone who knows someone. To get a peek behind the curtain on the culture and on the purpose and what they are saying is really like, if they really meet it.

7:20Yeah, yeah. Now you're famous for doing very creative work. I think it's fair to say compared to the average CMO. I think over 200 can lines, am I right? I don't, I don't. We lost count. It is more than 200 people. Which is amazing. I mean, that's pretty incredible, but any stretch of imagination. How do you create the environment to be that creative? And I'm sure a lot of people would aspire to be as creative as that and deliver the kind of work you've done. But how do you go about doing it? It's a journey, right? I mean, I think it starts with a shared vision for what the brand should be. Like usually like when I start on a brand, I really want to understand what the brand is about, respect the history of the brand.

8:02I work with brands that have more than 50 years old, so there is history there. You cannot just change and arrive and change everything. That's not how it works. But really a shared vision for the brand, a clear understanding of what the priorities are for the business. What are we trying to accomplish here? And then you start by doing the bread and butter really well. A CMO job is always like a balance of short-term, long-term. Usually, in most companies, your boss, if you're a CMO, is either going to be a chief COO or a CEO. He or she is probably much more focused on the short-term, like usually, right?

8:42I mean, I'm sure there are exceptions to what I'm saying, but normally it's much more short-term oriented. And I don't think that a CMO will survive if he or she is not delivering the short-term result for too long. So understand the brand, very clear strategic objectives. Then deliver the short term. You know what I mean? Like make sure that the results are coming. You start building your credibility. And then, that's why I was saying it's a journey. And then you start to do things that are more daring, a little bit more out there, testing the temperature of the water. Like I was trying to link the results to the strategic objectives that we agreed.

9:22and then you start to make the case for creativity and build your credibility at the same time and not everything is going to be great and they will realize that even when it's not great, it's okay because it doesn't hurt the brand and that sometimes it's great and it's like the ROI when it's great is amazing because if the idea is great, usually we don't even have to put that much money behind for it to take off. And it takes years. I think that one of the challenges that CMOs also have is the tenure on the job. I was at RBI, which is Burger King, Popeye's, G. Hortons, for a little bit over seven years.

9:57So it gave me time to learn and to do things right, to do a couple of things wrong, and to develop a relationship with everyone there, and to build the case and build my own credibility in terms of the work that we are doing. Now, presumably, when you're being as creative as you are, it doesn't always go right. So what happens when it goes wrong? Most of the time, when it goes wrong, you simply don't get the amount of traction that you would expect. But not getting a massive amount of traction on something tends to be a very common outcome of most marketing campaigns, especially the ones that are not trying to have more voltage.

10:41That's how I say it. you know so most of the time it's like oh it didn't work like people are not talking about it unfortunately like in most cases it does work you know like there is a quote from bill bernbach that i really like bill bernbach is the is the b of ddb right and he used to say something around the lines of if your advertising goes unnoticed everything else is academic and i see a lot of people like wordsmithing the copy or this or that but was the idea good to start with you know i mean like and will people care about the stuff you know like i i think that i put a lot of um emphasis on making sure that people will notice and they will care and if you work with great creative partners that understand the brand that understand like um what are your strategic objectives are, if you briefed right, chances are that you will become like a machine of doing great ideas.

11:42Unfortunately, there are many brands out there that play too safe, you know, like, and I can only imagine how frustrating it must be to have a, for the creative guys, if they are a great creative team and they present ideas that they think are awesome, and the brand is not doing any of that you know what i mean like so usually like with our creative partners they know that we will do it you know what i mean like so i get an overflow of ideas because it's for them as creatives um it's a better return on thinking uh return on creative for them is higher with us you know like then if they are like throwing one idea after another for a client that doesn't buy any of that.

12:30That's really, I'd not thought about that before, actually, but you're right. If you do the bold creative work, the agency are more likely to step up and go, well, you thought that was good. This one's even better. You know, whereas if you're always dumbing it down going, you know, we've got to tick every box. We've just got to play it safe. Then the agency are going to come back and play it safe, aren't they? I think you would probably not even get the best creative people to work for your brand. You know, because I mean, they are, they more than anyone else, they want to do great creative work that gives visibility, that gets talked about, and that drives results.

13:01I mean, their career depends on that, on those ideas that are able to sell. So imagine if you have a client that doesn't buy any of those ideas and you have another one that actually will make shit happen. You know what I mean? Like if I were on the agency side, I would focus more on that regardless of the agency fee or anything. And I think that we, in a fun, engaging and nice way, we tend to always get into that system, you know, where I really believe the more great creative work you do, the more great creative work you will do. Because you end up like seeing more ideas from your partners. Now you spent seven years in one of the most fiercely four, you know, competitions in terms of, you know, burgers.

13:47Intensually competitive, isn't it? Around the world. What would you point to as being the best work you did in that seven years? look I mean I think that all markets are super competitive these days you know what I mean like fast food is a super competitive market but like consumer goods you can pick any category from pet food to yogurt like it's it's stuff out there I think that in our case we had against the main competitor which was McDonald's we had like 25 percent of their budget so I really had to have ideas that would make my dollars go longer, you know, because if it were just a fight with generic things, and I mean, if you, if we all do generic work, they will put 4x the money, they will win, you know, and they are top of mind anyway.

14:36So if I do generic stuff, people are going to think of going to fast food where they are going to go to the competitor. So we really need to push. I mean, there was so much great work that we did from Proud Whopper, Mac Whopper, Burning Stores, Google Home of the Whopper, Moji Whopper, Whopper the Tour. I think that every single one, not Proud Whopper, every single one that I mentioned there was a Grand Prix winner. Proud Whopper won 13 Lions but didn't win a Grand Prix. so they got a tone of recognition and they did deliver results and they were done on a small budget most of them, they were not expensive ideas they were not ideas with a massive media plan behind because the idea in itself made the conversation happen I don't know which one would be my favorite I have a lot of art for Modi Modi won a black pencil on the D &D which was something that I always aspired to.

15:41I was dreamed of, and I came to terms that it would never happen because I feel that maybe we should have won with Real Beauty Sketches for Dove or with Mac Whopper. Mac Whopper, I think, won six yellow pencils. It didn't get the black. So I kind of gave up on the A &D, and with Modi, which was one of the last campaigns I did for BK, we got one. So I would say that that one, to me, is very special, but so is Mac Whopper, and so is Whopper de Tour. Whopper de Tour is an Iconium Grand Prix. It's huge and drove results big time. It's the best ROI we did with any activation in digital. Well, I don't know now because I left like two or three years ago, but when I was there, it was the best ROI we've got.

16:29And Moji drove sales, drove brand perception. I made all the data public, by the way, because there were so many people. I was going to say, Beck, because Moldy is the one that, you know, a lot of the work would probably be universally praised. But Moldy was quite divisive, wasn't it? Because it's like, why would you put a rotting burger in an ad kind of thing, you know? But that's the thing. Like, people got it. You know, like, there was already, like, in pop culture, this idea that burgers from fast food don't go bad because they have so much preservatives. That was not something that we created.

17:07You know, like people kind of like, there was a video from BuzzFeed around that. There is a guy in Iceland who did put a cheeseburger from McDonald's in a glass dome when the last McDonald's closed, when they had a crisis, you know. So the guy went there and bought one and has been sitting there on this glass dome for years. He has a 24-hour cam. Like, I think if you Google, you can find that. It's probably still there. And it still looks okay. so people knew that we didn't do on TV you know what I mean which is like a mass media like we did in social and PR you know like and I think that again the people who you cannot target 100 % but the people who saw it most people who saw it they get it you know like if they didn't get it it would not have changed the perception or sales the way it did like the case study video and if you google you'll be able to find shows some of the data, but I think I did publish an article on it on LinkedIn showing all the data.

18:08And I know it's very counterintuitive, and I know that it bothers some people, but that's, to me, what marketing is all about, or advertising. Good advertising is about making sure that you land a message to the right target audience. And you don't even try to please everyone because it's not going to work. we did ads talking about how we remove artificial ingredients from the products because that was what was behind molding and people didn't care no one talks about it you know like in the it's a great thing that Burger King we worked five years to do that by the way it was not easy at all to remove every single ingredient from artificial source from the food and as we did it when you are close to completion we did mold it and I tried to communicate in different ways and even though it's important in the grand scheme of things for you as a consumer who cares you know what i mean like i have big efficiency like picking up my kids in school is more important than knowing that burger king remove ingredient artificial sources from the product you know what i mean so like for for you to land that idea you need to do something that will demand attention you know or command attention uh from people and that's why emoji works so well yeah one of my favorite campaigns actually was um your stevenage sponsorship oh yeah i mean that's awesome like I didn't mention that.

19:27Yeah. That's got to be out there, surely. That's, I think, two or three Grand Prix in Cannes. That was really fun. We had to, crazy idea, we had to sponsor the team almost two years before, right? Yes. Because we analyzed to see when FIFA, the game, launches. When do they lock the kit? You know, like, so we had to sponsor for two years to be able to have the logo in the kit. we look at different teams and we try to pick a team that was like really at the bottom of the table but that knew they knew from the beginning what we were trying to do we told them because we didn't want to do something that they feel betrayed you know what I mean like so we build a relationship with Stephen H like our team was there in the stadium we got jerseys we sponsored a female team afterwards and we did a special Burger Queen logo for the female team that relationship continue to continue to exist i don't think they sponsor today but we sponsor for a good two three years uh the steven age team and then the idea was a massive hit you know um we basically like hacked into fifa and had the best soccer players in the world people who we can't afford to endorse our products to endorse our products virtually uh online uh and that was really fun and the gaming community really loved it now bringing us up to date of course you know you took a move from Burger King selling burgers you had a couple of years in Activision Blizzard didn't you and now you're making quite a different move aren't you yeah so I was on Activision Blizzard for two years like I was on Burger King which was RBI for a little bit over seven years I honestly like I I love that place I'm still great friends with all the guys there like uh every time in Miami I mean, we see each other, we talk to each other.

21:19I think Burger King published results, RBI published results today. I sent a note to the CEO. So, like, I have a great relationship with those guys. But I think I checked the boxes of the things I wanted to accomplish. And I stayed actually a bit longer because of the pandemic. You know, I was a very known figure internally. And they always treated me incredibly well. So, living during the pandemic, like, it was chaos, right? I mean, we had countries that sales went to zero because we had to close all the restaurants, basically, right? Like, there are countries that we didn't have drive-thru, you know what I mean?

21:55Or that the store, the restaurant is in a mall, and the mall was closed, you know what I mean? Like, in the U.S., we always had the drive-thru, which was already, like, a large chunk of the business. So, U.S. did okay, but in many other markets, it was tough. And, you know, like, you remember, right? I mean, it was global chaos, right? So I stayed and then decided to leave when things started to normalize a bit. I love video games. I always did. I played video games since I was a kid. And I felt that I had a lot to learn in terms of digital marketing by going to a place that was digitally native.

22:31And they have great games. And it was awesome. When it comes to that, I've learned at home. I've met some good people. Did some good work. It's an industry that is very different than consumer goods. It's very different than a startup. So it was really like pushing myself into, I wouldn't say outside of my comfort zone, but like pushing myself to learn new things. And then the Nautical opportunity appeared. You know, I was already a fan of the brand. I wrote to Matthias, who is the founder, CEO, like two, three years ago. I was still at the RBI saying, hey, I love the work you guys do, blah, blah, blah.

23:10He replied to me saying, oh, we love the work you do. And we always kept in touch. And then around end of last year, he reached out. He said, hey, we need to event marketing. Our CMO left. I was thinking about you. And a mutual friend also reached out to me to do an intro to Matthias. I already knew Matthias, but he was like, man, you guys are very like-minded and you will enjoy. So I visited New York, met the team, got a peek behind the curtain on the technology. And I felt it was like a unique opportunity. You know, I believe on the purpose. I was there. I was one of the key people leading the launch of Impossible Whopper at Burger King because I believe.

23:57And we did a national, we did roll out in all Europe, like the projects all over Latin America. So I always believed in plant-based. And I am flexitarian. I eat beef and I eat also, I try to incorporate as much plant-based as I can. That's not new. You know what I mean? Like, I'm not vegan. I'm flexitarian. I felt like this is a unique opportunity, you know, to join a startup that I believe with people who are like-minded, who share the creative ambition to the point that I made in the beginning. And pre-IPO, like, very decent valuation. The company is valued at$1.5 billion, two rounds to validate that valuation.

24:39And a great joint venture with Kraft Heinz in the U.S., which gives a scale, like products that I was consuming way before I even met Mathias. So I decided to jump, you know, and take the leap of faith and go there. And I was trying to work with a startup mindset, no matter the size of the company. And now we'll be able to work on a startup and learn what a startup mindset really is. So I'm having a great time. Like, it's one month-ish officially. And we already put some good stuff out there. And there is so much more coming. What do you think the biggest challenge for you is going to be? Because obviously you've worked on some very big brands.

25:25Back at Unleaver, obviously, you know, then at Burger King for a long time. although you weren't the dominant player, you still had some decent budget. So what are the challenges going to be for you now? I think it's scale the business, you know, and gain distribution and list the product everywhere. I don't like, of course, like Notco has way less money to invest than Activision and way less than Burger King. You know, like those are brands that are consolidated, global footprint, massive scale. I think in the US, Burger King has like almost 8 ,000 restaurants. You know, it's huge. But when I think about it, when I was there, the stuff that you asked me about, I think that all of it was done on a budget.

26:09You know, it was not like Stephen H. like was cheap. Modi was cheap. So you can do a lot with little. But I need the business to scale. You know, it's not even for me to have more. It's like it's for me to have the full return, you know, like on the investment that we make. because we will make people talk about NotCo, but I want them to buy too, you know what I mean? And if the product is present, then it's the step one to be able to buy, right? I mean, I don't want people to be talking about NotCo and not buying the products. I'm convinced on this actually because I did a podcast once on creativity and while I was preparing for it, I thought I'll write down the five most creative things I've ever done.

26:52Four of them had no budget. Because actually, you know, I think what happens when you have budget, you tend to spend according to your means, don't you? Well, actually, when you don't have budget, you're forced to be really creative. I wouldn't say, like, just don't have budget and make it. But I think you can do a lot. You know, like, when I brief, I don't constrain on a budget. I explain to people, like, we are a startup and this and that. But we get, like, we have on our pipeline some really ambitious ideas. One might be a little bit more expensive, but when I say a little bit more expensive, like a million dollars, You know, like I did campaigns that were way more than that.

27:31So you can do it, you know, like, and even if you have money, do something creative, right? I mean, why not? Like it always, it does work better. Yeah. Well, the other thing, of course, we're talking about technology at Web Summit, aren't we, and AI. But because AI plays an interesting role as well in product development as well for you. Can you explain a bit about that? Yes. So we basically, like our business model is rooted in AI, right? I mean, we have an AI, the name of the AI is GioZap. We basically analyze animal-derived products almost at a molecular level. We do chromatography studies, physical properties, and all that good stuff.

28:08We feed that to the AI. The AI then proposes four or five, I'm oversimplifying here, proposes five formulations on how to accomplish, to get to a product that's exactly like that one, but only using plant-based ingredients. Then our R &D, food scientist, chef team goes and prepares the product, tries the product. Sometimes there's a consumer panel. And then goes back to AI and say, hey, number three is the best. So the AI proposed another five based on that information. And with that, over time, you converge very quickly, especially if you compare with normal CPG products. I work on CPG. I worked for Unilever before.

28:50Sometimes, depending on the complexity of the product, it can take like one, two years, maybe even more. to develop a product. And in our system, we can do stuff in weeks, literally. Like, there are some products that are developing two weeks, which is unheard of, even when we don't have the experience on the product. Because, like, of the interaction that we do, like, we can converge in the right product very, very quickly. And the quality of the product is great. I mean, that's why we have a joint venture with Kraft Heinz, for instance. We are doing every single one of their key products. We are creating the plant-based version, and it's co-branded, the name of the product, NotCo.

29:31So you already have in the U.S. Kraft Singles, NotCheese. Like we just launched at NotMeo. What else is coming? There is a lot coming. We're going to do every single one of the key products, their plant-based version. And do you get the benefit of their supply chain distribution network as well to get it out? Yes, we create the formulation. It's a JV, right? I mean, there is a person who leads that. There's a marketing team and all that good stuff. It's neither Kraft Heinz nor Notco. It's a bit of both. I'm on the board there. I support the marketing team. And there is some really cool stuff coming there, too.

30:09I think AR is such an interesting conversation, isn't it? I mean, a couple of experiments on that system. One, actually. One is, do you remember the Nike-Tiffany collaboration? I do. Yeah, that. Well, we put that through the system on tests. It's like a five-star scale, right? So five-star being guaranteed success, one-star being terrible. That came out as a 2.5-star. And I thought, ooh, I wonder if AI can beat it. 4.9. So AI-generated Tiffany, you know, trainers, comfortably beat the Nike original. Now, of course, you can debate around, you know, do Nike, you know, it's a limited edition, it'll sell out anyway.