CMO interview: 5 learnings from Nestle on modern marketing and communications

Therese Kaillie

Nestle is celebrating 150 years as a global brand this year. It’s an anniversary that has the whole marketing team reflecting on the iconic food and beverage products, as well as advertising campaigns, that have resonated with consumers for so long.

For Nestle’s Australian director, marketing and communications, Therese Kallie, it’s also been an opportunity to gauge how marketing as a function and discipline has changed.

“There was a time when we you had to be big – you could dominate the airways if you had enough money and an interesting idea,” she says. “Today, for us, it’s about staying relevant, finding those places to be relevant, and adding as much value as possible.”

Kaillie has been with Nestle for 10 years, and moved to Australia two years ago to lead the marketing and communications helm. She sits across 11 companies underneath the Nestle umbrella, managing a 60-person team that provides communications strategy and expertise, along with consumer insights, in a shared services arrangement.

It’s a wide FMCG portfolio, stretching from coffee brands such as Nescafe Blend 43 and Gold, to energy drinks like Milo, the Allens confectionary range, and Maggi food products. All have distinct category challenges and consumer needs, but through an increasingly holistic health and nutrition-based approach, Nestle is hoping it’s setting up the foundations for success for the long term.

Kaillie caught up with CMO to talk about how marketing programs and teams have had to adjust as a result of digital innovation, consumer insight, the rise of the barista coffee culture and the quest to lead the health and wellness stakes.

Learning 1: The importance of storytelling

As part of the 150-year celebrations, Kaillie asked consumers what they remember from the group’s key brands. What shone through is the importance of aligning with consumer needs and values.

She points to Nescafe as a key brand, and how the storytelling approach of 30 or 40 years ago has again become the way into the hearts and minds of modern consumers. One of the group’s most successful campaigns in the 1970s and 1980s, for instance, was ‘the valley’, which centred around the journey of a young man who moves into a new area, the people he meets and times they spend together.

“We’re coming back to storytelling,” Kaillie says. “In the middle, we lost our way, and we started talking about what’s in the jar. But today, everything is being positioned in terms of emotion. The challenge is that not just about being big, it’s about being something that consumers choose to have in their lifestyle.”

That’s not just about messaging, but getting the products right. As most Australians are aware, coffee consumption has changed, and consumers have changed with it. Kaillie said the barista culture that’s taken root has been one key trend Nestle has had to respond to.

Today, Nescafe not only represents the mainstream Blend 43 product, it’s also introduced the barista style, micronized Gold coffee brand, and is relaunching its niche Green blend for consumers wanting a higher antioxidant coffee. At the higher end, it has Nespresso.

“The challenge then for marketing is how to get the right message through so people believe you and they’re willing to try it,” Kaillie says. “The same consumers are consuming all these different offerings at different times, so there is a space for all these things.

“In some instances, brands can become wide and unmanageable, and you have to go back and cut the long tail on a regular basis. That’s part of the marketing challenge: You will try things that don’t necessarily work, not everything you launch is going to survive.”

Learning 2: Identify and match up to consumer values

Another key brand in the Nestle portfolio is Milo, an energy drink invented in Australia in 1934. Milo has always had a link to athletes and sports, and in Australia remains aligned with our most popular sport, cricket. But the way it is positioned has had to change to retain relevance, Kaillie says.

Cricket legend, Richard Benaud, and the ad campaigns of the 1960s have been replaced by new commercials aimed at younger athletes focused on fuelling their ambition. The brand is also regularly sponsoring sports days to pursue a physical brand presence.

“In more recent years, Milo has been the ugly betty and has had no cool factor, so we knew had to change that,” Kaillie says. “Our new commercial is about speaking to younger athletes about ambition and what they want to do. It’s not about winning, but the resilience, learnings and friendships formed through sport. That’s where the brand plays a constructive role.”

Another recent initiative was introducing a Milo Fitbit for kids, called Milo Champions band, that is being used to build a database of insight on their fitness levels.

“It also forced us to look at the offering – it’s got to become more convenient and if the sport is out of home, we need to be there,” Kaillie says.

At the same time, the kids consuming Milo are not the ones buying the product, so the brand has to reach Mums as well. The ‘Milo Valuable Players’ program allowed mums at any school to vote for their kid’s everyday achievements via a dedicated website. Another content series, called ‘Sport is a great teacher, Mum is a great coach’, saw the brand speaking about how Mum contributes to a child’s success as an athlete.

“That allows us to have a dialogue with our consumers and mums,” Kaillie says. “But it remains a challenge for us, as we still need awareness on an ongoing basis. Showing up as Milo on mum’s Facebook feed as a friend is not necessarily the best way to do it.

“What it comes down to is an evolution – we need to understand our purpose and big idea, and how we bring that to life in the real and virtual world. If we choose a digital asset, we need to ask how and why is it relevant and for how long. It’s increasingly complex to stay relevant and to stay with the program and not chop and change.”

Another Nestle brand reflecting this emphasis on consumer values is Nescafe. The brand recently partnered with universities on a ‘Headstart’ program, allowing students to come in and compete in an annual Dragon’s Den style competition for money to pursue an idea.

“That’s what’s valuable to young people coming out of uni – getting going, exposure, funding and access to people to help them,” Kaillie says. “And they do need coffee, it’s part and parcel of being a student.”

Up next: Embracing health and wellness as a brand purpose

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Learning 3: Investing in health and wellness

A longer-term ambition since 2000 has been to transform the Nestle product portfolio to take better advantage of modern nutrition, health and wellness knowledge. This has seen the group getting rid of products that don’t deliver at the right level and looking at healthier options in each stream. It’s the reason why the Willy Wonka chocolate brand, for example, has been discontinued.

Kaillie notes the Health Science company, formed in 2011, is streaming ahead, and points to Nestle’s cutting-edge scientific work around the impact of nutrition in the first 18 years of life on lifetime health. But areas such as confectionary are harder and there are different parameters.

Take Allens, Nestle’s 125-year-old iconic Australian brand. “As a brand in renovation, it’s about understanding how much sugar is too much, how we reduce the sugar and keep the taste profile, how we educate on portion sizes,” Kaillie said.

“It’s about taking a position of responsible pleasure. We have to make sure we are responsible while making it the tastiest and healthiest product possible.”

Transparency and authenticity are vital in this long-term process, Kaillie continues. “As knowledge becomes more important and people know more about impact of sugar, we have to tackle that,” she says. “You need to be ahead of your consumer to be responsible.”

Consumer needs must also be front and centre. “We have to value what the consumer values,” Kaillie says. “They want healthy families, a good life, good beverages. How do we achieve that for them and satisfy those needs?”

Learning 4: Capitalising on data insight

Vital to this process is understanding the user. Kaillie claims the biggest change for Nestle marketers over the last three years is the way it goes about insight mining.

“We can collect as much data as we like, but the Devil is in the detail,” she says. “We have to go beyond data. Data shows trending and where things are at, but need more.”

One of Nestle’s big investments is a landscape study, called Compass, that provides a heat map on consumer trends.

“It’s category agnostic, so what we do is follow consumers on their journey, then interrogate this based on where they are moving,” she explains. “For example, that could be moving into different needs state, such as needing more of a weapon versus something that’s more natural or authentic. Then we use our categories to understand, and we do a lot of immersions.

“We need to look beyond the numbers and ask why and where is it going to.”

According to Kaillie, it’s not enough to know the person who bought Nescafe also bought two Kit Kats and was an 18-year-old girl. “One might be a monthly purchase, another is a daily impulse motivated by something else. I need both those need states, as that’s the way we need to craft brands to meet those needs. We can’t be everything to everyone.”

Learning 5: Building ideas agility

This also requires Nestle’s marketing team to be more responsive and agile, and Kaillie says the introduction of a digital accelerator team, insourced from an agency, was a key step forward. “We can do things quickly, through prototyping, and we have social media running from that hub, which is in the middle of our consumer engagement centre,” she says.

But it’s not just about monitoring, it’s about actively seeking insights, too. One successful initiative has been the Kit Kat studio trial. In six weeks, and for the brand’s 80^th birthday, Nestle created a pop-up shop that allowed consumers to make their own Kit Kat based on 17 premium ingredients. More than 25,000 units were sold in Sydney during the four weeks.

“The fantastic thing was that did more for us than any TV advertising by bringing on consumers who ordered their own Kit Kats, and who waited while they baked,” Kaillie says.

Another priority is better tapping into insights generated through Nestle’s professional business for restaurants and hotels to inform branded product lines.

“What we need to do is use the intelligence we gain there to bring to our brand products,” Kaillie says. “Consumers are often trying things out of home that lead to what they buy and make in home. So we need to stay more connected across those two businesses. If there is growth in Asian foods, for instance, we need to look at that offering and how to best serve it up.”

It’s clear marketing as a discipline has grown in complexity and mastering that complexity is key to understanding where consumers are going, and making sure Nestle has products and services to suit, Kaillie says. This is going to change business models and ways of innovation, she adds.

So it’s not surprising Kaillie sees the ability to turn consumer data and insight into business information as a vital skill for marketing today.

“It’s how we become much more consumer centric and the thing we use to motivate going forward,” she says. “But you can’t just listen to everything the consumer tells you as they are future blind.

“And you can’t simply by led by data, especially when you’re in FMCG. What we do know is that we don’t know what we don’t know.”

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