Companies with the best ideas win. They attract the best, most loyal customers and recruit the best, most creative talent inside (employees) and out (supplier partners).
But it's not enough to have the right ideas. You've also got to have the right processes to implement them. This is one of the reasons why the concept of "open innovation" has received so much attention recently—and why Kraft Foods is so keen on it.
According to Steve Goers, vp, open innovation and investment strategy at Kraft, the company has stepped up its open innovation activities in the last five years to complement and augment the efforts of the more than 2,000 scientists, chemists and engineers at Kraft who are tasked with the vital role of "inventing."
Goers explains, "At Kraft, innovation is successfully implementing an invention or creative idea that creates value to our consumers or our (retail) customers. We are striving to embed innovation into all we do. Innovation is helping Kraft return to reliable growth—it helps us create new product platforms, reinvent our iconic brands and improve product features. It helps us quickly adapt to the latest consumer trends, and discover ways to improve product quality while reducing costs."
In addition to its own cadre of inventors, and their collaboration with supplier partners, Kraft helps generate ideas through InnovateWithKraft.com, a website where anyone can submit an idea for new products, ingredients, processes and packaging. Although the company is open to just about any relevant idea, Kraft identifies nine areas of interest specific to packaging: natural anti-microbial; flavor systems; moisture management; cooking prep; devices & sensors; portion control; recloseable packaging systems; sustainability; and packaging designs.
Q: Has open innovation been successful at Kraft?
A: Absolutely! It's about complementing and extending how we innovate to increase the speed and quality of what we innovate. It's not new to Kraft Foods, but we're taking things—ike supplier relationships—to a new level.
Open innovation has driven a number of recent packaging enhancements, including the Oreo Snack 'n Seal package, the Maxwell House Flavor Lock Lid and composite canister, and the package for Trident Xtra Care gum with Recaldent.
Q: How does open innovation help drive consumer insight across the world?
A: A lot of people talk about doing more with less. That works for sustainability and cutting costs, but for open innovation, it's about doing more with more. By collaborating, you're combining resources, insights and better meeting everyone's needs. As a global company, we understand that some of our suppliers might have insights into local markets or solutions that we can better leverage.
We're looking to build mutually beneficial relationships with current and new suppliers, researchers and inventors. Together we can unleash the power of new technologies/innovations. And we're committed to being "partner of choice" so best ideas come to us first.
Q: Describe how the company's hub-and-spoke model feeds innovation from a central team to the various business units and key regions.
A: The hub-and-spoke model was pulled together by Steve Goers, our vp of innovation and R&D. Experts from the center hub work across all the different regions and business units to ensure that we're sharing best practices. In packaging, we have three people who are part of Steve Goers' team that lead our external innovation: Karlina Cuozzo, Susan Bodett and Anne Bucher.
Our research, development & quality (RDQ) team invents delicious, and our packaging team shapes delicious moments for consumers.
Q: Some of your best successes in packaging and supplier partnerships have come from open innovation. Why is that? To what do you attribute the success?
A: We both bring our technical backgrounds and our insights with the consumer or the trade to the relationship. Oftentimes, it's a matter of being able to leverage both to get to a solution that meets the consumers' and customers' needs. Part of [the reason for the success] is the partnership that develops over time, as well as fully understanding the capabilities of each company.
Part of open innovation at a company like ours is looking at how to improve the product and the package together. Trident Xtra Care Gum with Recaldent technology and Trident Vitality are two good examples.
Trident Vitality comes in a unique click box that looks like an envelope. We worked with a partner on the concept of that, of delivering a great design and making it work on high-speed equipment. That's one of the challenges in that market.
For Trident Xtra Care Gum with Recaldent, the innovation is bringing Recaldent into the brand. Recaldent is an ingredient that helps consumers with dental care.
Q: How does your open innovation website work?
A: InnovateWithKraft.com is just one of our Open Innovation channels. It's our online portal for unsolicited ideas, and it gives a sense of what we're looking for. Dozens of submissions come in each month, all reviewed by our research, development & quality team. It's not about the number but quality.
We've certainly had some promising ideas, but it's hard to say which ones ended up in products. All of our submissions do get reviewed by someone on our team, and we do get back to everyone who submits in six to eight weeks.
Q: The process is a bit different for existing suppliers, though, right?
A: We have ongoing relationships with existing suppliers where our innovation challenges and collaboration opportunities are discussed. We'll have formal discussions on how we address new hurdles in our businesses. Our procurement leaders are our face to those suppliers and manage those relationships. We hear about ideas from them but, in many cases, we'll introduce our procurement organization to potential new suppliers who might offer unique technologies that we might not have seen before at Kraft.
We work closely with our procurement department, as well as with our design and innovation group out of the center hub. That assures us that we bring innovation to everything from graphics to structure to supply chain.
Q: At InnovateWithKraft.com, it says that people can submit their idea to other companies, too. Why not ask for exclusivity?
A: For a lot of reasons. One, we want to ensure that people who consider these sites, since they're non-confidential, can take the ideas to whomever they want. Two, we have all kinds of ideas that we'll vet across the organization. So we want to make sure that they're evaluated first to see if they make sense for the business unit. And we don't want to bind any innovator to an agreement if it's not beneficial for both companies.
Q: On your Innovate With Kraft website, you identify nine packaging needs. Why these nine areas? Are you open to ideas outside these topics?
A: We're sharing where we have active interest, but would certainly consider ideas on other topics.
Innovation in these core areas can become game-changers for us. They're driven by business needs, by the key challenges that we don't have a direct solution for. We've polled our businesses around the world to see opportunities that we'd like to explore with external and open innovation.
We continue to call out recloseable packaging systems. It's an area where we have strong leadership knowledge but we would love to further explore new opportunities to bring recloseable systems to our consumers.
Q: Doesn't this tip off the competition to your future plans?
A: Our competitors are already familiar with our strategies and how we want to win at market, just as we have learned about them. Innovation is more about learning what is out there to help solve a significant challenge. The better you can externalize your challenges, the better people can help you.
Q: Currently, you accept submissions from U.S., Canada and Puerto Rico. Why not go global, especially since the company and its products are global?
A: We're looking to expand in accordance with local intellectual property laws. Our legacy Cadbury unsolicited portal, called The Collaboration Factory, does accept submissions globally. Right now we're integrating both of the websites, and you can check it out at: www.collaboration.cadbury.com.
Q: In addition to your site, which I would characterize as a passive effort, you also actively work with innovation brokers. What are the pros and cons of active versus passive innovation efforts?
A: We use a combination of both active and passive. An example of active is dialogs with our current suppliers and supplier challenges that we'll have. We also use several innovation brokers. There are no cons to using either. They're just avenues to find innovation to solve our business problems.
Q: I saw, via a broker, that Kraft is looking for a packaging solution to minimize the melting of chocolate bars. How is that search coming?
A: Many of our global snacks are marketed and sold in developing markets where temperature in the distribution channel can be a challenge. We're still looking for any opportunities in that regard.
Q: What have you learned from other companies, such as Procter & Gamble, that use open innovation?
A: We admire what P&G has done over the last four or five years. It's impressive to see how they've become open minded about embracing outside ideas. It's tough to change the culture and people's behavior, and it seems to be happening. It's like a muscle that you've got to continuously exercise it to make it stronger. Kraft is continuing to build its innovation muscle and leverage it as a strength for our company.
One of the roles we play in corporate strategy is to help drive growth in global snacks via transformational technology. We also want to drive growth in our iconic heritage brands via quality and innovation. By focusing on innovation and quality, we're going to help Kraft drive its growth.
Q: You also check out other industry innovation sites to see what they're looking for, too. Can you give me some examples of how this has worked for you?
A: You've got to always look at what's happening in the world around you. For example, it's pretty well known that a lot of packaging R&D people look at innovations in the auto industry—like new low-friction materials. Likewise, open innovation is a two-way street—so we're not only looking for potential partners to work with or license-in technology, but for partners where we may want to license-out our technology to help meet their needs.
Q: How important is it for innovations to fit within Kraft's platforms? How do current production assets affect your openness to different ideas?
A: When you're looking at innovation, you have to make sure that you can drive that innovation across many platforms, including how they're made, what countries they're being sold, how they address the laws of those countries, as well as that they fit with the brand image.
Our peel/reseal platform is one of the levers that we've used to drive innovation. We're constantly looking at taking peel/reseal platforms across product lines and regions. We expanded the Snack 'n Seal technology from Oreo to other snack products across the biscuit brands, like Fig Newtons and Chips Ahoy!, and across the globe to Poland and Europe. We took the recloseable cold-seal package of Milka chocolate tablets and are now using it for many brands across Europe and Latin America.
It's important to have a global team that is able to take advantage of those platforms. At Kraft, we have about 20 people in a global packaging collaborative network who meet on a regular basis to talk about leveraging platforms across product lines and businesses.
Q: Do you ever work with universities on research or get ideas from them that you can use in packaging?
A: We do partner with universities. We're always looking for fresh talent and have partnerships with a number of universities and firms—so there's a pipeline of new talent and ideas.
One of our key corporate strategies is to create a performance-driven, values-led organization. Being open and inclusive is one of our core values. A workplace that's safe, inclusive and rewarding is proven strategy for keeping good people and inspiring them to do great things.
Q: What's next for Kraft and packaging innovation?
A: I'm sure our competition would like to know! Unfortunately, I can't give away all our secrets, but our pipeline is full of new ideas. And I'm confident and excited about what we have in store.
We want to make sure we have the right relationships across the globe so we can take those new ideas to market.
Click on each headline to see examples of how open innovation works at Kraft Foods in packaging:
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