Sunday, March 15, 2015

Nestlé Gives Thumbs Up to Customized, Curated Products

Today’s discriminating shoppers don’t want one-size-fits-all products and services anymore. How many of them go to Starbucks to buy black coffee? They are looking for personalized options that fit their tastes and needs.

Innovative companies like Nestlé are listening to consumers online and offering new solutions for today’s lifestyle. E-commerce is where customizing products and curating orders can best take place. For example, customers can satisfy their need for a special diet like gluten free, low salt or lower cholesterol. A website can become a trusted advisor by suggesting new products and assembling orders based on past purchases and the results of an online dialogue.

“Between having digital expertise and having feet on the ground to make sure that chefs are working on our products, the flexibility is almost like the suspension on a car,” said Paul Grimwood, Chairman and CEO of Nestlé USA. “The suspension has to deliver whatever the road puts in front of it. We’re not big into backing a single horse. We like to spread our bets. If we see something develop, we are in a good position to support it, fund it and chase after it.”

Grimwood made these comments recently during a panel discussion at the Food Marketing Institute’s Midwinter Executive Conference in Miami. Other panelists included Bill Nasshan, Executive Vice President and Chief Marketing Officer at Bi-Lo Holdings, and Tom Furphy, CEO of Consumer Equity Partners. The discussion followed a presentation by Anthony Flynn, author of “Custom Nation” and founder of YouBar, maker of the world’s first customized nutrition bar.

“There was a point where big business stopped listening to consumers. What we are actually seeing now is a bit of a wake-up call,” said Grimwood, who added that customization is not a “shiny object” today because consumers will continue to look for options.
  
He used the example of coffee. For direct-to-consumer sales, the company offers two options: the Nespresso machine that brews coffee and expresso from dozens of single-serve capsules, and the Dolce Gusto single-cup coffee machine for making cappuccinos, espressos and lattes. While Grimwood didn’t list the brands for sale in stores, they include Nescafé premium coffee, Taster’s Choice instant coffee, and two brands for Latinos: Nescafé CLÁSICO and Nescafé Café con Leche.

“Having that flexibility it absolutely key to either a retail model or a supply model,” he said.
  
Nestle engages in a dialogue with consumers – online with Nespresso users and via telephone, letter and online with those brewing soluble coffee.

“You got to have the ability to have feedback from your consumer,” Grimwood said. “You have to be able to listen to the consumer no matter what the route to market is. But you can’t receive it and do nothing. It’s getting that information and acting quickly and responsively to what consumers ultimately want. And that could be customization.”

He also enthused about a special training center in Nestlé’s headquarters in Vevey, Switzerland where a team of young people from different countries and backgrounds monitor and engage consumers on various social media platforms. The team also serves as digital lab which tests new and emerging technologies from start-ups and established firms.
  
“They are looking at what people are talking about around the world,” Grimwood said. “What is a key driver? All of that information is analyzed on a daily basis. For me, it’s quite fascinating because it shows the opportunity that is still out there if you have the flexibility to react.” 

Nestle presumably is looking at all opportunities for growth these days. The world’s largest food maker recently reported its slowest annual sales growth since 2009. Nestle, like most CPG companies, is grappling with low consumer confidence around the world and new preferences in food. Consumers are opting for more fresh foods and less packaged products like frozen meals.

The two other panelists at the FMI conference were also enthusiastic about customization and curation in CPG and grocery retail. Furphy of Consumer Equity Partners implied that it’s necessary because some food-oriented dot.com companies are already siphoning center store business from supermarkets. He advised grocers to engage with shoppers.

“Look at their past purchases,” he said. “Engage with manufacturers on what products they would like. Build a repeatable basket either to shop from the store or be delivered.

“The manufacturer and retailer can both participate with the shopper,” he continued. “It becomes very personal with manufacturers understanding their products and consumers and retailers understanding their local marketing and shoppers. That is an incredibly powerful combination that can be very well managed digitally. It enables us to create that customization on a massive scale, but kind of systematically so each shopper feels like they are being catered to individually.”

Nasshan of Bi-Lo agreed that bringing together insights from both trading partners is very powerful.  But he suggests that curation can move from taking place online to occurring in the store itself.

“I believe a merchant’s role is to provide their customers and their partners opportunities they don’t have at the moment. Think about how you find those opportunities – and I think this notion of curation is one of those big opportunities. It’s going to take marrying consumer insights with customer insights.

“I don’t think anybody would say curation will not be part of our future,” he continued. “There is a path and a journey. It really starts with putting a premium on where the conversations need to be in the store, making sure you understand the demand occasions. We got folks who are very used to interacting with customers. Then you can start stepping into this notion of curation. We need to move from just asking the shopper, ‘Did you find everything you needed’ to ‘You should try this product.’”

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