Variability between manufacturers who are investing, innovating, and winning shelf space, and those that are playing a constant game of catch-up in today’s volatile market is tied to any number of things, but one incredibly important factor is the speed at which they collect the signals from the market and process them.
“Today, consumer signal speed is almost instantaneous,” Richard Kottmeyer, group chief strategy officer at FutureBridge said in Food Manufacture’s most recent webinar How to Stay Ahead When Change Never Slows, sponsored by HSO UK.
That means that the ability for the consumer to give you a ‘data point’, whether that’s via TikTok, in a review, through market research, etc., has never been faster. And yet many businesses still depend on traditional insight models, wherein research is commissioned, fielded, delivered and acted upon several months later – when it’s likely to be outdated.
“We are sitting on the most valuable intelligence in history,” Kottmeyer continued, pointing to information provided by trade press and available through sources such as social media, regulatory filings, or e-commerce reviews.
In essence, we have access to vast swathes of information at our fingertips – and, if used prudently, it can be a very a lucrative asset for manufacturers.
It’s remarkable when you see the speed and volume of information that can be assessed.
Richard Kottmeyer, group chief strategy officer, FutureBridge
Don’t be a signal reactor
With the power of AI, such open source data can help businesses predict trends, estimate product success and understand the drivers behind consumer behaviour with surprisingly high accuracy.
Some businesses are already doing this very well, while others aren’t… But why is that?
“What we find is that there’s two types of manufacturer and the gap is increasingly widening,” said Kottmeyer.
He boils these down to ‘signal readers’ and ‘signal reactors’, with the former utilising data and AI in a way that affords them lead times miles ahead of their competitors.
But he is also quick to point out that investing blindly into AI won’t reap results. Businesses need to have clear outcomes and understand the problem they are trying to solve before making a commitment in the kit they need.
Mike Stanbridge business architect at HSO UK agreed, noting that many of today’s food and drink manufacturers struggle with what he describes as a “technology–strategy gap".
While companies may have tech in place, the strategy is or has become misaligned, meaning they lag behind.
How to get it right
Stanbridge whittles the setup of a good strategy into three core steps – defining the concept, making sure you have buy-in, and defining the route forward.
“Operational reality comes from combining clear business goals with process thinking and the right technology choices early enough to make a difference,” he explained.
Oscar Mayer UK is a prime example of a business which did this well.
When CEO Ian Toal joined Oscar Mayer, it wasn’t in a great place.
“It wasn’t a bad business. They were good people. It was just badly led with no strategy and no differentiation versus the competition,” Toal reflected.
One of the things he recognised early on was the need for an energised team that felt embedded in what the business was going to be. Through existing and newly recruited team members, he pulled together a group of around 50 people who helped to shape the company’s purpose, goal, and strategy.
If people feel involved in creating the plan, they’ll want to deliver it too.
Stanbridge shared the same view, calling back to his point around buy-in but also allowing teams the headspace to create.
“Normally there’s no shortage of enthusiasm for change, but the ability to absorb it, adapt to it and apply it pragmatically is often underestimated,” he said. “Teams are usually under constant pressure to keep service levels high and respond to customer demands, so they can fall back on familiar ways of working just to keep things moving.”
As the HSO expert explained, stretched teams and a lack of foundational knowledge can result in workers slipping into old habits - even when the strategy has moved on.
“So it’s really important to enable those teams to be able to step back from the firefighting,” he continued, nodding to Toal’s approach in approval.
This headspace allowed the team at Oscar Mayer UK to quickly identify that it was operating in a very competitive space. From there it was about establishing a point of difference; as Toal explained, the team recognised the firm couldn’t be the biggest chilled food business (as it was up against multi-billion-pound operations) but it could be the most innovative.
The next step was to ensure people could see the company was acting.
“Words are cheap, but creating an environment that the people could actually see we were investing in innovation was our number one priority,” added Toal.
And so the Gastro Hub was born.
But there was another part of the puzzle – just because Oscar Mayer had built an innovation centre, didn’t mean it was automatically going to be an innovative business.
“Most people react to data that’s two or three years old to try and create something for the future,” Toal told delegates, echoing Kottmeyer’s earlier points. “I wanted to create something that was going to try and predict the future.”
That was where AI came in – a system capable of assessing, testing and proving ideas super quickly (around a day).
The process has enabled not only new concepts to be tested out before commercialisation but also sped up the process of creation to launch considerably.
Overall, Toal says the model has reduced the risk of product launch failure by around 80%.
“We’ve got something in the region of 80% to 90% success rate on the things we’ve done here,” he said.
And while Toal says he is a man of decisive action and fast failures, he assures the technology behind the Gastro Hub “wasn’t an afterthought” - rather a speedy yet informed decision.
The result? Three years of consecutive profit growth.
Keep focused
Part of the key to Oscar Mayer’s success and many others ahead of the game is focus.
As Stanbridge outlined to viewers: Don’t try and do it all. You have to be really clear about where you want to catch up.
One way of doing this is to look at your resources across the business and treat them the same way you would an employee.
“Every employee should have a review every year. Every employee should have some objectives. Every employee should have some KPIs. Now, what if we applied those same rules to systems and processes and, in fact, all resources, in exactly the same way?
“If you want to stop an employee from doing something, you give them some relatively firm feedback. If you want to stop a system doing it, well, you’ve got an even better option there – you can get rid of it a lot quicker.”
For Stanbridge this tech-strategy gap comes down to giving your resources – be it people, processes or systems – a thorough assessment and pinpointing where you can invest to make the biggest impact against focused and clear KPIs.
To find out more, tune into our latest webinar here.
