CMO interview: How innovation and marketing agility are driving growth at Freedom Foods
- 13 September, 2016 17:28
Tom Dusseldorp is the first to admit not every marketer would want to be in his job.
As general manager of marketing and innovation for Australian specialty and allergen-free food manufacturer, Freedom Foods, he holds a strategic and significant role in a business experiencing rapid, fast-paced, international growth.
According to its most recent financials, Freedom Foods chalked up 86 per cent net sales growth across its 30-strong product range in FY2016, a figure that doesn’t just cover Australia but also increasingly North America and China. In addition, operating EDBITA increased 41 per cent year-on-year to $21.5 million.
Freedom Foods also commands a significant presence in the health food aisles of Australia’s leading supermarket chains, and provides services for a range other food producers through its growing manufacturing plants in NSW and Victoria.
But with great opportunity comes great responsibility. Dusseldorp is tasked with fuelling further growth through new product lines and brand expansion, and therefore has a direct commercial accountability and transparency some marketers still lack. This also requires him to build the business case for a marketing and then prove it.
“It’s stressful, and there is a lot of expectation and risk,” Dusseldorp says. “You need to be willing to fall on your sword.”
On the flip side, Freedom’s rapid growth and entrepreneurial culture ensures Dusseldorp holds a place among the country’s strategic marketing leaders.
“I’ve worked in businesses where there has been pressure on margins, where the first function out is marketing because it’s the discretionary spend in P&L. That can be limiting for a team of dynamic marketers,” he says.
“At Freedom, we don’t have big budgets to start with, but we are opening opportunity to generate those budgets. It’s a very entrepreneurial environment we’re working in. It’s up to me to identify the consumer need, then develop and deliver the product range that’s going to tap into that, formulate the P&L and a commercial plan to show how we’re going to support, fund and drive it.”
He points out one of the key pillars at Freedom as an organisation is measuring delivery.
“Everyone is very busy, and they value people who come in and get things done,” Dusseldorp says. “And it’s clear who has done what; there’s no hiding at Freedom. It’s the kind of organisation where your input is clear and valued.”
Brand and strategy building
Dusseldorp earned his marketing stripes building brands in the food and drinks categories. He started his career in agency land, working for a number of agencies before reaching senior account management at Publicis Mojo. He then jumped client side with Pernod Ricard, holding brand roles across the RTD and spirits portfolios, before going global to run the Chivas Prestige range in London. Returning to Australia five years ago, Dusseldorp looked after champagne and spirits categories locally before deciding to seek out a new challenge. He was attracted to Freedom Foods because of its growth aspirations as well as the chance to build brands.
“It’s hard to find a company that’s firstly in growth, but also that needs you to be a more entrepreneurial marketer, who is willing to take some risks but gives you autonomy in return,” he says.
Dusseldorp joined Freedom initially as marketing lead for the beverage business, tasked with establishing a strategy that could deliver ambitious growth in the non-dairy and dairy beverage category. This led to the launch last year of Milklab, specifically for the barista market, available in dairy and innovative non-dairy varieties including almond, soy and coconut milk.
“Milklab was based on a simple insight: Coffee has advanced so far that you can get a single source coffee from the beans of the deepest darkest regions of Guatemala at your local barista, but they’re still pouring the same old milk,” he explains. “If you think about percentages, you’re really drinking a milk beverage, but milk innovation for the cafe market hadn’t gone anywhere. That was a big market opportunity for us – there are billions of cups of coffee consumed every year, but most brands were just offering a barista milk and it lacked credibility.”
Dusseldorp says a key to the brand’s success was winning over external influencers and own the barista market. Milklab subsequently won the New Product category at the 2015 Fine Foods Australia Awards.
“We acknowledged the power of the barista and made them feel part of the process,” he says. “Milklab was created to tap into that, and is both dairy and non-dairy milk. That’s the other innovation – non-dairy milks for coffee haven’t evolved much either. But there is nothing more disastrous than a split coffee – it goes up there on the list of disastrous issues for the planet these days.”
The Milkbar launch set the new marketing bar internally, and led to Dusseldorp’s promotion to CMO across the group seven months ago, overseeing the wider cereal and snacking divisions.
“Our success helped convince the Freedom Foods management team as to what a functioning marketing team can bring in terms of adding value and opportunity to the business. It was a big turning point for us,” he says.
Up next: Ways of fuelling innovation as a CMO
In a bid to bring the same level of innovation and growth to cereal and snacking, Dusseldorp’s first emphasis has been process. “It’s about going a bit slower to go a bit faster,” he says.
To date, he’s implemented a gate system for the business in order to priorities opportunities presented in the lucrative health and allergy foods categories, both as a brand, as well as through manufacturing partnerships.
“Rory Macleod, our managing director, has a very big vision for growing our capital base by investing in new technology and equipment, from packaging through to processing. That puts us on the radar for lots of larger organisations,” Dusseldorp comments. “We’re drowning in potential, so we needed to put framework around what we saw as benefitting our business and rather than say yes to everything, how do we say no.”
That framework has, in turn, helped the team turn attention towards Freedom’s owned brands, which had lost focus in recent years. While holding an enviable physical position in Australian supermarkets, Dusseldorp notes the brands have low overall awareness.
But equally, that’s exactly what’s allowing the marketing team be more innovative and agile: A lack of legacy brand baggage.
“With many FMCGs, the number one priority is always going to be established and iconic brands, which have been built over many years and cost hundreds of millions of dollars,” Dusseldorp says. “It’s about how they nurture those brands, stop or arrest decline in some cases, innovate and adapt but still in a very tight brand hierarchy and architecture.
“Look at the uproar around Arnott’s Shapes or Uncle Toby’s muesli bars, or when Coke tried to change the formula. We are a health food company that is unapologetically changing the way people eat for the better. The emphasis for me has been on getting the right R&D resources to develop the healthy foods of tomorrow, and if I get that right, it will unlock even more marketing spend as we’re generating more EBITDA and consumers are buying what we have to sell.
“Then we can invest in our brands more and more. “
Dusseldorp flags a host of further products coming out over the next six months, driven by the group’s channel strategy.
“The other thing is we’re not just Australian focused, we’re turning out to be one of the biggest cereal, milk and non-dairy players in China as well as North America, and both are key markets for us,” he says.
Through all of these efforts, consumer insight and data are important, but Dusseldorp is wary of relying on data to dictate where Freedom goes next. That, he says, comes down to taking risks and sticking with your brand purpose.
“As long we’re focused on that healthy product, and we’re delivering on key trends such as transparency within whole foods, and removing the complexity in the food we make, that makes us relevant,” he says.
But Dusseldorp is a big believer in digital, and says Freedom’s media spend is 100 per cent focused on digital.
“My point of view is to fish where the fish are, and we are very targeted about digital,” he says. “It gives us the ability to have an always-on approach. Campaign-based spending is great if you have significant marketing spends and require high reach and frequency, and can utilise the full mix.
“Our best marketing asset is not only our innovation pipeline and products on the shelf, in terms of how they’re on trend and if those propositions are interesting, but also how we reach consumers and spread word digitally in the most efficient way.”
On the agenda is also a new campaign, aimed at helping lift awareness of the core Freedom Foods brand. To help, the brand has recruited Australian icon, Jennifer Hawkins, as the new face of the three-year campaign, which will revolve around the theme and mission of making food better.
The changing role of the CMO
As a CMO, Dusseldorp says one of the biggest shifts in recent years has been the lessening reliance on agencies as the oracles of ideas and strategy.
“More and more, marketing is real time and quick - it’s either direct response to consumers, or a Facebook post there one day and gone the next,” he says. “Your ability to brief and strategise, and think and then get responses and approval, has never moved faster.
“It’s up to marketers to know business better than anyone and be able to directing a lot of that activity. That for me has been the biggest shift.”
At Freedom, this has seen the marketing team directly dealing with consumer questions and social media interactions, Dusseldorp says. “I’ve actually seen new products developed thanks to that new closeness of consumer. It’s invaluable,” he says. “You wouldn’t get that if you just had an agency managing that for you.”
The other big shift for Dusseldorp is marketing’s integration with the commercial function. “When I was in a global brand role, I was more brand strategy focused and not hugely commercial. Those roles are a little immune to commercial realities but they shouldn’t be,” he says.
“More and more, marketers are required to know the P&L, talk to commercial outcomes, innovate to those targets and make sure that’s at the forefront.”
And when it comes to innovation, it’s product and distribution Dusseldorp is increasingly turning his attention to in order to achieve growth.
“Marketing and product are integrated, one hand feeds the other,” he says. “It’s not good enough now for a food tech to take a brief from a marketer, and then go ‘here’s the food you have to have’, and the marketer then try and work with it. They have to work together on the why.”
A big area of innovation for Freedom is around the food itself, and the group is investing in new grains as well as emerging superfoods. “Not many companies are innovating the source,” he points out. “It becomes a marketing battle in the end because the foods are relatively similar.
“We are putting a lot of focus on innovation on new grains, and the superfoods coming out of CSIRO and Charles Stuart University, as there are a lot of amazing food innovations coming through the pipeline. That is exciting to a marketer like me because it brings new news where it has been the same forever.”
Another of Dusseldorp’s mantras is simplification. “I find a lot of people think innovation is to overcomplicate something, where actually the more simple something is, the more innovative it is. It’s the same with food,” he says.
“We see a lot of entrepreneurs come to our business, and have great ideas around food, the consumer and category, but it’s highly complex. This is food. The more simple you make it, the better chance you have that consumers will understand and buy. And once they buy and engage that first time, you’re 90 per cent of the way there.”
In the face of these challenges and innovations, Dusseldorp’s says modern marketing leadership requires a new level of agility.
“You have no idea what’s coming at you day to day, and the role is not defined anymore – there’s no simple way to put it in a box anymore,” he says.
He also sees the role as being one of inspiring people. “I can’t be successful without my people being successful,” he says.
“Marketing leaders need to not only get the board excited about vision and strategy, but the entire team, operations and people on the front line. You have to be the voice of the company internally and externally.”