Marketing secret sauce with Kraft Heinz CMO Todd Kaplan

0:07Ladies and gentlemen, welcome to the Uncensored CMO. Now, in this special series, we are partnering with our very good friends at NBCUniversal to do a special series focusing on CMOs that have used the game-changing power of sport to transform their brand. In this episode, I'm going to be joined by Todd Kaplan, the CMO of Kraft Heinz. Now, they are the owners of some of the world's most iconic heritage brands. This is a great episode. There is a lot to love. Here it is. Thank you. I'm very excited to be joined by Todd Kaplan, who has recently, well, fairly recently taken over as a CMO of Kraft Heinz.

0:40Welcome to the show. Thanks so much. I'm so happy to be here. Well, I'm looking forward to getting into Heinz and the whole world of what you do and what you've been up to. But just for people listening, give a brief intro into your career because you spent 18 years at Pepsi, didn't you, before joining Kraft Heinz? Yeah, so I grew up in Southern California, you know, and then my background actually, pre-Pepsico, was in sports marketing where actually I worked in the Bay Area working for a company called Millsport running the Visa account, the Olympic Games, Rugby World Cup, all their sports marketing globally.

1:11And then coming after business school is where I found PepsiCo and spent a number of years there working on a variety of every business under the sun there, if you name it, from big brands, small brands, running functional groups and all the different things. And, you know, started brands, worked on Pepsi, a variety of different things. And then came from there just most recently to Kraft Heinz for these last, you know, 10, 11 months. It's been great. It's been an awesome time. Fantastic. Now, one thing that stood out when I looked at your LinkedIn profile was you worked on, obviously, the brand Pepsi, and you've worked on innovation as well.

1:41Of course. And you mentioned 21 consecutive quarters of growth. Yes. Which is pretty impressive for a mature brand. I mean, obviously, as a startup brand, you might expect to deliver that consistency. Yes. But how does a big brand, you know, that's fighting one of the biggest, if not the biggest competitor in the world, achieve so much consistently? Yeah, on that brand, it was a tricky thing on Pepsi because it was really about getting back in touch with our roots and understanding the challenger ethos that that brand really is in its DNA. You think of the Pepsi challenge and the Coke versus Pepsi, all that.

2:11So at the time, it was really getting back to that and being very self-aware as a brand. And so we did a lot of stuff back when we kind of relaunched it on the Super Bowl in Atlanta. And this thing is Pepsi OK and a lot of stuff from there that kind of grew. And really getting that back with some innovation along the way as that brand, even as big and storied as it is, still has areas that it needed to grow and all that. So a lot went into that. And you also mentioned some innovation and new product launches as well, didn't you? Of course. And I always wonder about that because I had a spell at Britvik.

2:42I had quite a long 13-year spell at Britvik. And we were the bottler in the UK for kind of Pepsi franchise. Okay. One thing we always struggle to work out is how we focus on the core Pepsi franchise and also… Yes, it's the end. Do the exciting news. Well, it's funny. I remember back when I started, so I used to run our, before the Pepsi job, I was on the, running their water portfolio. And at the time we had a brand called Aquafina, which we still have as a big, you know, biggest pure water brand. But it was the literally coming up with new categories and places to play in. So creating new brands like Bubbly Sparkling Water, Life Water, and really bringing a lot of growth into that category.

3:18And so it was one of those, you know, being the growth engine of that and then going into a category that was in decline. And Cole is on the other side now. It's like, OK, well, it just came from there. Now I got to go on the other side. So it was you get to see both parts of the business, which is great. But innovation is something I'm very passionate about and definitely something I'm looking forward to bringing here to Kraft Heinz as well. We're doing a lot of great stuff. I remember pitching for some investments on innovation and explaining that Britvik, I think it was something like only, I think it was 3 % or 4 % of the total company turnover was driven by the new innovation.

3:53But it counted for like 60 % of profit growth. Oh, I'm sure. And a similar percentage of revenue growth. And it's one of those things that's disproportionate to kind of top-line growth. But if you look at overall, and it also takes time to kind of compound. And I think I worked out like in a 10-year period, 80 % of all our company growth had come from brands that did not exist 10 years ago. But if you're in the year, you go, well, of course, Pepsi is way bigger than LifeWater or other brands. But it's important to take a long-term view of innovation, isn't it? And of course, people are so driven by quarterly results.

4:25And it's always easier to do an extra promotion in Walmart on Pepsi, for example, than it is to put the money on new brands. How do you overcome that kind of short versus long-term challenge? Yeah, well, innovation, it's always the catch with innovation. You have growth versus scale. especially companies that have legacy established brands that have been around for 100, 150 years. You've grown the category as the category has grown. And so it's about penetration, right? And so are you going to bring in New Year's? Are you going to go through frequency and stealing share from somebody else? And so it really just depends on the growth strategy of where you're at.

4:57But I think, you know, listen, innovation is something that is very ripe for the food industry right now, as I'm here at Kraft Heinz and it was like that in the beverage industry as well. And you're constantly seeing new entrants. and coming up with something you always need to be very insight led consumer led throughout it all and how you execute the proposition is really what dictates what brands are still standing three five years after they're launched versus just trying new stuff yeah no that makes a lot of sense so so just under a year ago you made the move from pepsi after 18 years yes on you know pepsico to craft science now they often say the u.s president gets 90 days to make you know make an impression.

5:33But what was your approach to starting a new role and making an impact? Yeah, listen, I think like any new role, you want to get to immerse yourself in the business and the culture with the people. And so, you know, going on a listening tour and learning all the ins and outs of the business and what brands are with the opportunities and areas of growth and issues and all that stuff. And one of the things that's been just most fascinating with starting is, Kraft Heinz in North America, 70 brands across 50 categories, which is amazing when you think about it. I'm coming from a place that had snacks and beverages, as much as there's different categories of beverages and stuff.

6:10But there's such a distinctness in terms of the different business models and how each brand is set up. And so really trying to learn all of that stuff together and also knowing that these brands, we have 96 % household penetration, which means just about everybody in North America has one or two of these brands within an arm's reach, which is an amazing opportunity to solve. And so it's coming in, listening, learning the ways, talking to people, learning about the talent and the culture. It's been great. And it's been a wonderful company so far. And we've been having a lot of fun. You talked about the big portfolio brands.

6:44It's a company that's got lots of rich history, global as well, very, very big footprints. And I spotted a phrase you used, which I really quite liked, called intrapreneurial, which I thought was quite clever, kind of twist on entrepreneurial, but I presume inside the company. It's inside the company. So how do you, how do you deliver that? Because, you know, you tend to have either the advantage of scale or the advantage of being small and nimble, but how do you combine the two together? It's one of those things where, you know, and I'm somebody, anybody who knows me in the style of leadership and high approach, I'm very entrepreneurial.

7:17I started two businesses when I was in college. I've done very, like, very scrappy, always trying to, like, make stuff happen. And I used to use that at PepsiCo. I used to run around and say that I was like, we were a startup and PepsiCo was the VC investing in all the ideas and things. And so similarly at Kraft Heinz, it's the same kind of mindset. As a company that's as big as we are, you can just drown in bureaucracy and layers and process and all the formality. At the end of the day, process is great. There's learnings, there's scales and all that, but it's really the people that are going to make the difference and the ideas and how you can really understand where and how to get things done.

7:51And so a lot of times is if you think like an entrepreneur, it's not about the resource you have, it's about how am I going to get it done and what's the best way as opposed to coming in and being like, oh, well, our budget's only this, so we can only do this much. It's like, well, if you were running this company out of your basement, you'd probably think of it a little bit differently, right? And so it's finding ways to just provoke those kind of discussions and figure out how to break down some of the walls internally to really make some stuff happen, which is what we've just been starting to do.

8:21And any tips on how you organize yourself to do that because if I put my hat on back to sort of PepsiCo and BritVic days, we'd have like a 12 month calendar and 18 month lead time to do innovation and, you know, 96 steps in the process. I remember it. I remember it all in detail. And it's a balance because at the end of the day, you're not trying to just create chaos and just do random stuff. And hey, let's like you need some process. And there's like you said, there's a planning cycle, there's a calendar, there's retail selling, there's all those kind of things. At the same time, you know, there's ways to get stuff done and without some of the formality and how to break things.

8:55And so a lot of it just is, needs to be embraced by the teams, needs to be embraced by our external agency partners, our internal cross-functional partners, and how you really connect much more deeply across the board and make sure that everyone understands where you're going. So there's this idea of a shared win. Am I right in saying that you've also in-house part of it as well? The kitchen has been like a... Oh, the kitchen, yeah, sure. So how does that help you kind of become more agile? Yeah, so we have an in-house creative agency called The Kitchen. They are wonderfully talented, and they have been on a tear lately.

9:26It's been great. And the interesting thing about an in-house agency, and I know there's a big trend in marketing about in-housing, and I think a lot of people have it wrong. A lot of people go to in-housing because they think it's like, oh, well, the value there, and it's the efficiency of having it in-house versus external, which is great. But that doesn't really strike me as a value proposition. The real value proposition of an in-house agency is you're in-house. These people have a at crafthines.com email address, which means they should know the ins and outs of our brands. They should have deeper relationships.

9:55They should be like a core part of the leadership team of all these brands to be able to think and move quickly with the creative brain. When you think of a lot of agencies, like agencies don't sell anything. They're literally just a collection of humans to think about problems that you have and opportunities you want to go after. They're just humans that are wired maybe a little bit differently than the humans inside the walls of a big company. bringing some of those type of humans inside the walls of a company and bringing them together is where you get some real magic happening when you start to really understand how to connect the dots and really make it happen.

10:27They've been doing great. I can really rate that. I worked at Suntory, and we had two soft drink brands, LucasAid and Ribena in the UK. Sure. And we had an in-house team called TED, Technology, Entertainment, and Design, which was kind of a cute wrapping for it. But I remember the original business case was really, really simple. It's like, But I remember they pitched and said, did you know we have 400 variations of the same trade adverts that we make every year? And we pay an external agency X thousands of pounds every time we make a change. And the bill was, I can't remember, it was like 600 ,000 pounds.

10:59They would happily take your money. Yeah, exactly. And like one person, part time, was able to do all of the things that we were outsourcing. I remember that was one of the original kind of business cases. But then where the benefit actually happened is something would happen, like we were facing sugar tax or there'd be a reaction to a campaign. Within 24 hours, an idea had been proposed with an execution and we could press a button and go live. And it was that kind of immediacy to kind of act at, I know people say act at the speed of culture, but it is actually doing that because you're able to respond to kind of what's going on live rather than going, I'll brief it in.

11:32It goes through traffic management, agency gets three weeks and they come back eventually. That's it. Yeah, and that's it. You know, the kitchen at Kraft Heinz has been phenomenal. They started off as kind of the social agency, doing all the, you know, running all the social handles for the brands, and we've now started bringing in more production, a lot of our product work that really showcases and heroes the product, still driving a lot of these kind of culture things. They're, you know, submitted a bunch of stuff. We'll talk about some of the stuff here at Cannes, and they're just doing great work firing on all cylinders.

12:02And, again, it really all starts with this deep partnership with their brand partners and just understanding and empathizing with the problem to solve at hand. So it's been good. Now, talk about partnership. Any tips for working with external agencies? Because this is a question I get asked a lot because a lot of people listen who work in the creative industries. Of course. They want to understand their client better. And there's a lot of kind of people I talk to like you who work very effectively getting the work kind of made and signed off. So any advice? Well, to be clear, we still work with a ton of external agencies as well that are wonderful partners.

12:32And, you know, it's funny that the creative process, creativity is messy and it's iterative. And it's that's what creativity is all about. But when you think of how clients and agencies, it's this very linear, formal, you know, you brief, they pitch, you buy, they this. It's like all these words that just you feel dirty. It's like selling and buying and pitching. And it's like at the end of the day, you're all trying to do the same thing. It's not about like, are you going to win the business? And very seldom is it going to be that the idea comes over the wall, like perfectly ready to roll, and you just say go, and then you just sit back and watch.

13:07It's always like, well, what about this? And how about this? And so getting rid of all that formality and almost meeting up at what I'd call like round zero, which is basically this idea. And I call this concept collaborativity. And it's basically trying to break down the walls between clients and agencies to just exist as people who are all co-conspirators. No one's a client. No one's an agency. We're all co-conspirators. in service of a brand trying to just do some cool shit, right? Like that's what it really is all about. And so how do you focus the discussions and the right brainstorms and all of that stuff to get the ideas out and separate the right ideas from the right executions?

13:43How do you de-formalize the way of working so that most of the stuff happens over text, over quick chat, you know, quick builds, all of that, versus waiting for the formal three-hour review and the 12 creatives to come in and pitch 20 things, you know? And so that has been something that, when we've had a lot of success with our external partners, really breaking down those walls is where the magic is. And even when you walk around here at Canon, you see some of the work. If you were to talk to everybody about every piece of work, I guarantee very few of those concepts were in a pitch deck as is.

14:14They all were built. They all were iterated. A lot of them came across through. There's an insight. There's a thing here. And then a lot of texting, a lot of talking, a lot of building. I've always wondered why we didn't have the lion for the suits, right? Because I reckon behind every major campaign, there is a team that have actually thought really carefully about how clients and agencies work together, how the briefing process works, how they get to the answers, how they understand the kind of business need. It's interesting, actually. I remember probably the most successful collaboration I've ever worked on actually was in probably the toughest circumstance I've been in when the sugar tax came into the UK when I was working on LucasAge.

14:49But a massive backlash. And I was given, I think, about eight weeks to kind of relaunch the brand. And I set this thing up called Mission Control, where I got all my partners together, you know, PR, design, creative agency, media planning, et cetera, et cetera. And we met every single week, sat in the same room, and we debated everything together. It wasn't like, oh, this is your bit, that's your bit. It was literally sat on the table, even down to the, you know, refining the positioning statement for the brand. We went right back to it, and we sat in research groups together, and we signed off the media spend together.

15:20And it was amazing. The energy, and you wouldn't imagine that we were in such a crisis because actually the energy and belief and momentum it created was just palpable. It's all about just vision and where you're going to and how you bring everyone together. It's not even just the agencies and the brand. It's the media team, the insights team, our legal team. I remember early in my career, I used to think of it as like some of these other functions that I used to call them like the sales prevention force. And it was like legal and it was like finance and all the people just get in the way of doing all the stuff you want to do.

15:53And of course, that's not like how it is. And when you realize like maybe bringing these people in earlier and telling them what you're trying to do, listening to them, understanding some of the risks, the things. And so you can shimmy it around and really sculpt the idea. What you quickly learn is everybody wants to be a marketer. They love the idea of like being on the winner winning team and doing a lot of fun work and getting some big hits. And so, you know, we have a really great partnership with our legal team now at Kraft Heinz, with our media team, our insights team, all the people who need to be a part of this and on board.

16:26You bring them in early on so they're part of this team. Yeah, I love that. That's great. Now, we're here in Cannes. Yes. And if I had to pick my favorite Heinz Cannes line, it would be the drawing. You remember the drawing campaign? Oh, draw ketchup from a few years ago. Yeah. Where you had this incredible idea where you asked people spontaneously to draw ketchup and then people literally drew your, you know, your kind of label design and the logo and the shape of the bottom, that kind of thing. I mean, it's incredibly powerful. I checked out the results actually. And not only was it can line winning, but on the system one database, 4.2 stars out of five and 96 % brand awareness.

17:03So almost everybody got from the campaign exactly, which I kind of was the point of the idea, right? It was like, you know, imagine ketchup sort of thing. But I think part of the reason I love that so much is it shows the power of brands that has got consistency of execution over so many years. I mean, how important is that kind of consistent execution, the design, how the comms all works together? Oh, it's massively important. And again, that campaign was before my time here at Kraft Heinz. And it's one of the reasons why I'm here. Just the creative work that the team has done on Heinz, you know, globally leading up to, you know, these last few years has been amazing.

17:38But I think when you think of that, that's the whole concept of brand building, brand architecture. It's about muscle memory in people's brains and understanding what a brand stands for. And when you said draw ketchup and everyone draws a Heinz bottle, like you're doing something right. You want it. You have it, right? You have the color red. You have the keystone. You have the color of the bottle shape. You know, there are certain cues. You know, I talk about it to my team a lot that brand building is a lot like pointillism. I don't know if you know art, not to get all geeky on art, but pointillism are people with little dots, whatever.

18:10And every time you have a brand interaction, whether it's a beating culture, whether someone sees a TV spot, whether they see your brand at a restaurant, whether they have it, that's a brand interaction, putting a little point in someone's brain. And the more those points cluster over time to form perceptions about a brand. So what a brand, Volvo equals safety, you know, like what are the things you're trying to say about your brand and how the visual cues are a great shortcut to do that. And that's where brand architecture design is such a critical part for brand architecture. And Heinz has a wonderful brand design.

18:42Yeah. And I think part of the win here as well is making sure those assets appear everywhere. Correct. Whether it's in social or it's in the store when you go in or it's in the packaging. I think consistent execution is a big part of that, isn't it? Absolutely. Now, you're here in Cannes with a big message based on marketing that happens was your big talk. So tell me what's the insight there and the role of marketers to impact in real time. Yeah, so it's interesting. And it's really funny juxtaposing it with Cannes as well. Because if you've walked around the basement of the Pelé or you know a lot about Cannes, there's a lot of brilliant creative work that if you were to ask, you know, 100 ,000 people, if they've ever heard of it, real people, not advertising people or marketing people.

19:24a lot of people might not know it. There's a lot of work that's like for the room rather than for winning consumers. There's a lot of, you know, and it really starts with this premise that is the marketing that we know today working? You know, and do we really even know? We have all these mixed media models and we have all these analysis, ROI, brand health tracking, all these great, wonderful tools that are very important for our industry. But do you really know what's going to hit at the core of a consumer and drive a change in behavior? and it really stems from that the marketing model today is kind of broken a little bit.

19:58And what I mean by that is if you think of when marketing was built, it was essentially out of like the Mad Men era. And so you have your target audience, you have your brand, you come up with your strategy, your brief, your creative, and then you use paid media to like send your creative over to a consumer. So it's almost like a little paper airplane just like, all right, we're going to find you in your living room on TV, here's in your social feed, and you match the creative to the target. The reality is today, I know when I watch paid media, when a commercial comes on, I look at my phone. When I see pre-roll, I hit skip.

20:31People aren't paying attention anymore. People are distracted and doing so many other things nowadays. And so marketing that happens is this idea of how do you hack around the edges and live in a world beyond just this paid media, very organized ecosystem that is a great way for us as an industry to feel good about the things we're doing, but actually do shit that really happens. And by that, it's like, you know the things that happen. You're getting text messages from people, not because you work at the company. You're seeing it organically in your social feeds. It's trending. It's in earned media.

21:01You're seeing push notifications. Like just people are talking about it at work. It's a cultural moment. And so the way we're starting to do more marketing that happens is really bringing a lot of culture into our brands, bringing a lot of this context and this new mindset to make sure our brands are really showing up differently and hacking around the edges. So it's been a lot of fun. It's funny, actually. Talking about kind of using your mobile phone while you're watching TV ads. Yeah. I saw this amazing bit of research. It's UK data. But they actually measured what people do in the ad break.

21:32And it's really fascinating. And it probably wouldn't surprise you because you looked at about maybe a third of people were actually watching the ads. Yeah. A third of people were doing other things. Maybe a third of people were out of the room. Yeah. It kind of tells you kind of roughly what you thought. However, the interesting thing was almost all of them heard the advert. Yep. And the moment I saw that, I'm like, damn it, that is one killer insight. It is. Like, you need to own the jingle, the music, the voiceover, you know, the audio. Yes. That's the win. Well, it's not only that, it's no longer a lean-in moment anymore.