CPG Innovation Insights: Jeroen Tjepkema, Misha De Sterk, Nicola McMahon Staines & Sebastian Concha

And what I said, if you do your homework in terms of the decline, the growth gap as we call it, so what are the gaps that we need to bridge with the interventions that we do, might be new products, repositioning, etc., etc. But also, so if you understand this well, you can sort of filter out on what type of pathways you should start to look at. I mean, There's also many examples of basically that, um, how can we invest better in, in even our media, right? There's so many things on— if you understand your business case, your P&L, and how the business is built, and you dissect each of these elements, you can find first of all your efficiencies, and second, you will learn also where do we decline, why, a bit to the point Joan mentioned, and see how we could improve that case.

Everybody, welcome to this Founder Institute event. My name is Jonathan Gritchen, co-founder and CEO of the Founder Institute. We should have a nice international audience today. We saw registrants from all around the world. This is a live event. We try to make these events interactive as well. So to kick that off, please don't be shy. Let us know where you're joining in from in the chat here. I already see a couple of people are joining in. Let us know where you're coming from. Even our speaker list has people from all around the world, but here we say João is in Portugal. Welcome. We have Dubai, or Dubai, Eihan is a member of the Founder Institute team. But yeah, let us know where you're joining in from. We should have a great audience here. And really, something that I'm going to be encouraging is questions in the chat. Okay. Webinars are the most effective when there is a dialogue between audience and speakers. So please don't be shy. We're gonna be trying to pepper in your questions throughout this whole conversation today, trying to make this interactive. So very quickly, just in terms of a run of show today. So very quickly, I'm going to introduce the topic. We'll bring on an amazing panel of speakers that we have, and then we're gonna go through a kind of free-flowing discussion. And again, please feel free to ask any questions that you have. And then after that, we will open up to a broader Q&A session, and then we'll go back to that networking lounge where you can network with other like-minded people. So the topic that we have here today is definitely an interesting one. You know, innovating for today and delivering results for tomorrow is a constant challenge for any large corporation. And honestly, I think for CPG, consumer packaged goods companies, it's even a bigger challenge, right? Because they're not just deploying code in a lot of cases, right? They're also deploying physical products. So longer lead times, supply chains, a lot more complexity, right? And these are big bets, risky bets that people in this space are trying to put into place. And then you mix AI into the equation and just the speed of innovation, right? And this is just becoming a bigger and bigger challenge. And that's why we put this event together today. And we got some amazing speakers here to just give us some perspectives from some of the largest consumer CPG companies in the world, and also some of our partners at 10x Growth, who are, you know, probably the most knowledgeable corporate innovation people that I know, to provide their inputs as well. So I'd like to just invite all the speakers up to the stage here. We'll do some quick introductions. Yep, so welcome everybody. I think first, maybe I'll start with Nicola. From Perrigo. Nicola, would you like to give an introduction?

Yeah, sure. Hi, hi everyone, and thank you, John, for that, and thank you for inviting me to this. My name is Nicola McMahon-Staines. I lead the consumer experience globally for the women's health group at Perrigo, which is a company that provides great quality self-care products.

Got it. And Nicola, where are you based again? Is it—

And I'm based in London, actually. In London.

Awesome. So now we're going to go very far away, down Sebastian, who's in Santiago, Chile right now. So Sebastian, would you like to introduce yourself?

Well, hello everyone. Pleasure being here today. I'm Sebastian. I'm the Accelerator Coach for the R&D Latam at Nestlé. I've been in this role for over a year and my background has experience in car manufacturing, startups, and big and small organizations. So very happy to share the floor with these people today.

Awesome. And then our final two speakers today are coming from 10x Growth. As I said, we've partnered with this organization at the Founder Institute because these guys know what they're talking about when it comes to corporate innovation. So I think maybe Mischa, if you want to start it off, and then, and then Jerome.

Hey everybody, thanks for having me. So Mischa de Stercke, based in Amsterdam, working for the last 10, 15 years with large companies, helping them to grow their business. And innovation is, is part of, of growing your business on the mid and long term. And yeah, let's dive into the complexities and challenges of this topic.

Awesome. And last but not least, Jeroen.

Thank you, looking forward to the webinar. So my name is Jeroen, I'm a partner at TenX, 15+ years experience in the CPG industry working for both startups and corporates, and my focus is on product strategy. So I'm helping them with growth strategy, new business developments, but also people. If things are declining, we help them to renovate their portfolio and thrive again. Again, looking forward to discussing about the discussion about this topic.

I like the term renovate, renovating the portfolio products. It's a, it's a, it's a good perspective for it.

It's not rebuilt.

Yeah, uh, not demolishing, right? Um, so okay, let's, let's get to the, let's get to the topics at hand, guys. And I'm, I'm I'm going to try to be a sponge myself during this because I know that I'm going to learn a lot from this conversation. So I think, you know, the way that I'm thinking about kind of guiding this is that, you know, the first topic is that we'll start to dive into some of the challenges that CPG companies are facing today and, you know, start to see what are some of the strategies that you guys are seeing in the space and some of the trends that are really starting to bubble up to deal with the increasing speed of innovation, the increasing number of competitors, the AI, supply chain, all this kind of stuff. And then after that, I want to zoom in a little bit more on startups, right? And how corporates see startups, the role with startups, what successful collaborations look like, and all those sorts of things. So, you know, maybe I'll kick things off here in, you know, saying that it's, There's a lot of different approaches to corporate innovation, right? Some are better for some companies, and I would love to hear, maybe Nicola, if you want to help kick us off here, I'd love to hear, you know, how at Perigo, you know, just how, what are some strategies for seeing which of these, you know, different approaches are right for you?

Yes, so I think if I just take a step back and think about it in the context of, you know, does one size fit all, as you said, John, you know, many different approaches and observations around, you know, many of the kind of experiences I've had in the past and also today is coming back to that point of there is no magic bullet, as it were. How do you actually understand what is that best approach, and is that approach from the top down or is it from the ground up? And as I think about the way in which we've started to look at the women's health business, you know, I start more on that kind of ground-up thinking in terms of, you know, each business challenge is different. Each of our products sits at a different— in a different space, in a different maturity level. There are many different dimensions, it has a different need to get to, different types of consumers, many different things to think about. So, you know, if I applied all of that to one structure, let's say for example if I thought about the macro trends of women's health, I may end up being in a situation where I'm stultified by the need to follow these macro trends and spend a lot of time trying to figure out what I need to do there in order to meet those trends, and never really move on anything because it's too big, too much to think about. On the other hand, if I took approach like a horizon structure, then I might end up just stuck in that kind of first horizon because I'm constantly trying to move, you know, constantly trying to move resources, finance, whatever it is that's going to make that happen in that space and never quite get to that horizon there. However, when I look at it from a brand and product perspective, so from the ground up, and I do the work based on a business challenge, based on the needs that that particular brand or product has, and think about where it wants to get to and start to kind of bring those two things together, then I'm building that pipeline specifically for the needs of that brand. So, and even that's not going to look the same one brand versus another, right?

Yeah, so it's not even just per company, it's per, it's per product, it's per, you know, audience, um, you know, in some cases like per geographies too, right? I mean, it's like you can slice this and dice this thing up in so many different ways, so it's just can be overwhelming. I'm sure. Sebastian, I'd love to hear from your perspective. You guys have an accelerator, right? So that is a very specific approach.

So quite in line with Nicola, the one-size-fits-all, it obviously doesn't work. And I think one of the main reasons behind it is the culture you will find in different organizations. So understanding the culture of the different big corp or startups will define the right approach they will take. Some are more conservative, some are more risk-takers, some are more willing to work in open environments, some are more internal-focused. So understanding your culture and what, what makes more sense within these organizations can help you to move faster. If you don't understand the internal culture for the organization, you try to bring something completely new, you might find a lot of resistance and struggles. So I think one of the big stages for people joining organizations or big corporations, or start working with them, one of my first advices will be try to understand well what defines that organization, what it makes different from others, what's their culture. And from that, that will help them to make better decisions on what to offer, when to offer, and how to approach it.

Yeah, interesting.

And go ahead, Michiel.

Yeah, so I was thinking that, so we, there's a reason we call 10x Growth 10x Growth, right? And What I always find interesting is that if you bring it back to what is it that we need to do as a commercial company is to sell products, right? And we want to sell more products to more people, or we want to sell more products to the same people, or any of those mores that we want to answer. And, um, so if that is the goal, if you bring it back to that, if it's R&D or brands, in the end you need to grow a business. And of course, I know all these people well. I think why it also works is that indeed there is not so much this, this quick fix or process that you can follow that will help you to bring success, because then we probably would have done all many different things if there was a process that brings us always the good stuff. And so it's reasoning back, right? So it's reasoning back, saying, what do I need to achieve? In what type of timeline, what are our current assets, where do we have our strengths, where do we miss capabilities, what do we need to develop, and sort of bring that in a more systematic manner to the right people in the company. And there we as externals are very dependent of the, the creativity, the perseverance of our partners at the other side. But what I always find interesting as an outsider is that there are many initiatives in a company And there are many research reports, there are many startup accelerator here, venture building thing on the other side. But how can I grow my brand? How can I just— how can I bring growth in a commercial way, in a way that people understand it and that it makes sense together as a whole, right? Not all these fragmented initiatives that don't communicate together. At least that's the point of view I have.

Yeah, and if I may build on that, because I really like this concept of thinking about it from a growth angle and not innovation per se, because we seem to separate those two things, and we very often think about growth from a very commercial short-term perspective, and innovation is this big thing that happens somewhere else. And sits above everything else, and maybe we'll get there one day. But for me, it's, you know, it is growth. It's all about growth, and innovation is a capability within growth. And actually, the growth has to come from your core business. And yes, eventually, you know, it makes sense that there may be other products and things that you bring to the pipeline, but the core business kind of catalyzes everything. So, you know, for me, when I think about it from a growth lens, it's more about looking at it as faster scaling, less risk, so de-risking everything because you're looking at it from the lens of something that exists. And I think the one true thing that you can say about anything in a business is you have an asset and leverage it as much as you can. You have consumers who are buying your asset, leverage them as much as you can. So let's not forget what's happening today and not lose sight of, you know, you have that core that exists. And actually, I had a perfect example of a great conversation about growth this morning, which was, there was a question about whether or not we were going, we had anything in the pipeline to create a better product than the one we've got in market today. And the answer came from a very astute marketeer, and I was really pleased to hear it, because, you know, Seba, you talk about culture. But the answer was, no, we don't need a superior product. What we need to do is make sure that the product we have is capturing the audience. That is out there for us to capture. So that's a very great answer, but actually the truth is that that is what it comes down to when it comes to no one size fits all, because for that example, that is super important. For another example I'm working on, it could be that some of the claims that we have to make have to change, therefore we need to change the product. So, and that comes with a completely different flavor.

And that definitely maps back to what you were saying, where growth, right? Because if it was like innovation, yeah, it's such a fluffy term. When it's growth, it's like, okay, well, we have this product, how can we grow it? Like, we have a growth goal, right? And just, okay, well, you can renovate, as you were saying, Jerome, right? It doesn't have to be a totally new product. You can reposition, remarket, things like this. And I think we're starting to go into like the topic of like developing the innovation roadmap, right? And, you know, and you mentioned too, like leveraging the core assets and, you know, Jeroen and Misha, you guys really, I know, spend a lot of time with corporations, like kind of going through that exercise of figuring out, okay, what is the growth goal? How do you work backwards? What is the core of the business? And then starting to figure out what are the kinds of bets that would actually align with the core and have a realistic chance of hitting that growth goal, right? Like just, and any, yeah, I'd love to hear, you know, your guys' thoughts on that. Cause I know that there's a lot of corporations that do not look at it from that lens, from, you know, it is in this innovation-y kind of space that's just like sort of there, but not necessarily attaching, you know, growth goals and trying to show actual results, right?

Yeah, maybe just to— because I know Michel probably is also dying to jump in. So the thing always is that with innovation, we always label it as something new, right? Something— finding something new. But I think always the strength is, right, when I have an existing product in 35,000 stores across the world, right, that's the biggest asset you can have. So if you want to grow, right, you need to do something new. Or something entertaining or more fun, etc. Um, but it doesn't mean you need to do something different, right? You can also look at your strengths and see how we can leverage those into something that's more appealing. Also, to Nicolas' point, right, if you look at it from a growth lens, then all of a sudden you look at things differently, right? So what do I have? What's good? What's appropriate? What do we need to change? It's kind of what do we need to protect? What do you need to transform? And then innovations all of a sudden becomes a more tangible topic, right? Because the things I cannot do, maybe I can find something else, but the things I can do, I can change quickly, right? And then I was also triggered by the— what Nicola mentioned, right? Sometimes you just need to move, but moving also means it's kind of— is a controlled risk, right? So do I take a big step, a small step? Big step means I run an accelerator. Small step, I look at my same product but a different marketing tactic, right? But it's kind of We need to frame innovation differently, right? It's not the next shiny object, it's just doing something different with the things I have. There's a limit, and if you cross the limits, yes, then there's probably a need for something else, but only until then. And then, and then it becomes really tangible for anybody, right? Just to, to, to build your innovation roadmap, right? And also to win, right? Because probably And if you have 35,000 stores across the world, it's a big asset to leverage, and it's not something else, and not many companies can copy-paste that. So if that's your asset, then build on that.

Yeah, and I'd like to dive in quickly there too, just, you know, you said if it's, if it's, if you've hit that limit, right? So essentially you're, you're like, if it's saturated market or, or, you know, you've done all you can do, and I'm sure that a lot of corporations probably think that right, in some cases, and that's why they turn to something like innovation, which is not so tangible. How, yeah, I mean, how have you guys, when you start to define where, where are opportunities, right? So it's, it's within your product, you said repositioning, right? But then it could also be, okay, you have this established audience or these established distributors and things, right? So you can really just start to dice it all those different ways, right?

I think the— so we just had finished the talk with Misha. If you look at decline, right, the, um, so the analogy we use, right, so if you have a soccer match and the competition is better, you lose, right? But you know, in 90 minutes and then it's done, you go to the next game. If you're in this retail space, it's kind of you're losing in slow motion, right? So you're losing every quarter, a little percent here, a little percent there, and it starts to hurt 24 months from now. But when the moment you identify that it hurts, it's already 24 months since it started, automatically too late. And so the thing is where— and then what we start looking for is building something new instead of identifying what happened 24 months ago when I start dropping. And so the question is, look back and then forwards at what holes to plug. And did the market change? Did the competition change, or did I do something myself differently that made other people win? And so it's kind of a way of looking at things again, right? It's the— but decline doesn't necessarily mean that you cannot change. It's just looking at it from the right time frame, right? Because if I look at it today, right, probably it means that, you see, it doesn't fit. But actually, decline started way back, and that's when And if you identify that, you also know the root cause and you better understand how to fix it. Yeah, yeah.

And you don't need hundreds of researchers to understand that. And I think that's another thing, because you see there's sometimes so much data and analysis that is difficult to get from a thousand slides. What's the essence here? What are we trying to solve, right? What are the key things that we should experiment with, right? In terms of, are we in the right direction to capture a trend that actually resonates again? And that's a bit, uh, what Nicolas said also, to, to de-risking. And I know the accelerator is a lot about de-risking because you can't understand the future by analysis that are done in the past, right? So you need to first understand, hey, what happened? Why do we decline?

What had—

like you said, what did change, etc.? You build hypotheses around this But then you need to get into action mode, and that's of course what startups like— I get out of the building, or at least that was sort of the motto, right, in which a long time ago I was, I was encountered with all these materials, right, of Steve Blank, etc. But you need to get into action mode at one point and start to do things to prove if you are in the right direction, yes or no, um, and then take it from there. And it has a bit to do with, um But these type of methods, you can also build a roadmap, right? You can also see in terms of things that you have learned, what is working, can we find it, can we find new consumers fast enough, or do people find traction with our renovated product fast enough, how does that work, the speed, etc.

Maybe also question to Sebastian, Nicolas, right? So because it's easy for us to kind of take risk So we're used to it as kind of startup founders, and I can take small steps and probably I can fix those things. But I can imagine—

we can move fast and break things, right?

Yeah. Or at least, right, we can also then fix things fast again, right? Without— yeah, with risk. But the question I think is the— so what's the balance between this risk and taking steps, right?

And it's—

and how much is that holding you back in moving forward? If I frame that correctly as a question.

Yeah, I'm happy to try and kickstart that answer. What's holding us back? I think just coming back a little bit to what Mischa was referring to in terms of, you know, organizations tend to have a lot of information, a lot of data, but maybe they don't know what to do with that. You know, when I was reflecting on it, and I don't know how to describe it, but all that information, if you look at it as the what, you know, you have all of this what, but it's how then you make that come to life in a way in which, you know, it's going to help you to actually understand whether or not you've got something from there. So, to Misha's point, you distill it to something that then you go and you need to validate. Is it actually going to do that? And the how is really important here, and I think that's the stultifying point in a lot of ways, in a lot of places. And that's probably what's holding people back, and I think organizations back is, and you know, that how is not that difficult really, because you can do it in very lean, quick ways with minimal resources. You don't need to invest a huge amount of money. I think Misha has already said that, but organizations don't seem to be able to feel that comfortable with that kind of methodology. It doesn't feel like it sits very well with the traditional processes, which are, you know, really, really important for organizations to have in order to make sure that the whole organization has something structured that they can follow. But I think there is a place to put in these quicker kind of methodologies that help to validate. So I don't know that There's always an element of organizations don't like to take risks, so they want to see a business case. It, you know, the business case needs to, it needs, needs to, to provide the basis for which you apply the resources. But for me, that business case, you know, it could be a— you could have early validation with, with that sort of quick thinking. So all of that information, resource, data needs to be translated in something, you know, that you can validate quickly and then apply it back into the business, the big business process. That allows you to garner the resources and get scale and things like, and that kind of thing. So I think, yeah, I don't know if I've answered specifically your question on risk, but—

Well, I think you're starting to get into like how we can measure success in the short term a little bit, right? And yeah, even if we, you can validate things fairly quickly in a small fashion, right? These bets that you might make today, you're not even gonna know if you're on the right track. You might know if you're on the right track, I guess, if you can define some kind of interim KPIs, right? But it's the time horizon on knowing if your bet's going to cash in or not, right? It's probably pretty challenging. Sebastian, how have you guys, or just what have you seen in the space in terms of starting to define these KPIs or something like that?

So yeah, so the first observation is Large food and drink companies are huge ships, so they have a lot of inertia. So getting them to move takes a long time, but also to stop them is also a hard challenge. So I think a lot of the risk we're seeing is not getting there on the right time, or also not stopping things that you already started moving and you should be stopping, but the inertia of the ship force you to continue it. And for that, tools like accelerators and all the initiatives help you to de-risk those approaches. So I think that's a way different large corporations are trying to deal with this idea of that the mothership is so large that once they're moving, it takes a long time to start it, and then also to stop it is a challenging element. The main The difficulty we'll have with this, we have all these exploring small ships around this mothership, if you want, but they still need to connect and have a conversation and a relation with the flagship. And there's always a little bit of friction there because this big corporation has its natural approaches and process that were built in decades of learnings and developing. That are great for already developed brands and concepts but makes testing and improving hard. So trying to protect these independent areas that have ability to explore quickly and that making mistakes is okay and to learn fast is okay and trying to bring a little bit of those elements of more startup culture into a corporation. It's, I think it's a great thing that both of these accelerators are doing, uh, and, and it's a big challenge also with the people who, who run them to constantly bring this, this culture into, into the, the, the corporate culture that by nature is different, by nature is different. So, so you, you need to transmit a little bit of, of both. If you're too entrepreneur in a large corporation, you will have a problem. But also, yeah, if you have traditional corporate man in this innovation and actually, you also struggle. So you need to have one foot in both ends to succeed, I believe.

So I wanted to bring, just, there's been some great questions from the audience here, so I want to start to bring some of these up, and this one is pressing, right? It's exactly what you were just saying. It's, you know, you want to be trying a bunch of different things, Right? But, you know, and wrapping testing of bets is key. So how can you be sure, or in an organization, you know, how do you kind of go through the different dynamics of an organization to make sure that where you're operating and trying to move fast and learn and things like that is sort of protected?

Right?

Because that can be a challenge, I'm sure. And again, it all gets back to company culture and how conservative some companies may be. But I don't know, Sebastian, or anybody, just kind of what you have seen as some strategies that can ensure that freedom to—

So it's a great question because for one end, you need to create a protected space for trying these new things. You need to protect it from business as usual. But on the other side, you cannot have this into a bubble that never applies into the, into the corporation, because at the end it translates to what Misha and Nicolas said. This is all about growth. So this innovation, unless it can translate into things that become real growth drivers at some point sooner than later, they make no sense. So the hard challenge is is one, create a space for these environments to explore much faster than you would do in other environments, to have flexibility that, that is, it's normally not in the right ways to do things in large corporations. But at the same time, making sure that this applies and goes directly to the way it, it, it fits into the corporation sooner than later, rather than keeping an experiment sounds great, but they cannot be inserted into what the company needs for growth.

Now, in terms of finding these people, what I think is a very good signal is if these people are actually knowledgeable and interested to learn the business problems, because they all like their own innovation ideas and the new stuff and hoping that the new stuff will bring something new. Well, that never really happened, right? So yeah, sort of a lens on, am I understanding what I need to solve for that brand or business? What is their top 3, 4 challenges that I think I could contribute to solve? And that sort of, that makes that us versus them thing also much smaller because we're all in the end here ideally to solve a business problem, right? And And I'm sometimes, yeah, quite surprised by the ideas that are being pursued, which I can't root to any core business problem, right? So are we doing this because it's new? It's bad. It's really a dumb reason in my opinion, right? So, and it will not lead to anything because in the end we all compete with the same type of resources, right? So then if you want to scale something, you come with an idea that yeah, maybe nice in the future, uncertain, and it doesn't even solve a real core business problem, it will not survive. So I think sort of realistic, curious, uh, mind to what is the business that I'm actually working in.

Yeah. And maybe just to build on that, because I think, um, it was the 2018, 2020 And when accelerators were really popular, the thing was to build new things. And new things have two problems: they always stay small, and usually we find things that we cannot produce at a large scale. Also, to Sebastian's point, right, it needs to be practical at some point, right? So, um, also in order to be relevant, you need to work on things that solve a real business problem but also stay connected to the organization that we can actually build it. And it's a simple thing as packaging, right? If I need to build a liter pack, we all design these things that are beautiful, etc. Does it really matter if a consumer does it in a liter pack I already have so I can produce it straight away? And that's the difference in nuance where you stay relevant because you build, you find something new, but I can also produce it straight away in a product line and in a brand. Or I do something that's automatically is too difficult to produce within the company and then it gets shelved away. So there's a thin line there, but I think we learned the hard way, Michel and myself, that we built beautiful things, beautiful business cases, but those were startup ideas, those were not corporate ideas. So, right, the method works, but the application, it needs to be closely linked to. So whatever you build is practical. I think that's by far the best advice.

And it comes also back to, um, your P&L, right? So what are— can we build a P&L? What are the margins? Uh, and And that's lacking, right? So there's a lot of testing going on, but then I still don't know why do you test this? Does it bring us profit? Does it bring us growth? Any of those, uh, why are you testing in this direction? You could also test 20 other things, right? So, um, and that comes back to that, that person that if you understand your core business problems well and how the management is looking at margins and profits, etc., etc., you can link it back to something relevant. And then most of the things you don't even have to test, basically you don't even have start.

I get—

and that's sort of, um, yeah, it comes a big bet— sorry, it comes a big bet— comes a big bet too. Sorry, big and bet is almost the same, but it comes a bit back to, um, what am I investing in, and how do I know what is big versus small, etc., etc.

And probably it's also the time picking—

yeah, picking the right bets again that are aligning to the core of your business and leveraging core assets that you have. Otherwise you might as well just be any other startup out there. Just doing something random, right? And I think I got a great question here too, just kind of looking at, you know, some of these trends and you mentioned margins, right? I mean, since this little bubble that we've, you know, seen ourselves come out of in this post-COVID landscape, there's a lot more pressure on margins and profit, right? Across the board, Wall Street, anywhere. So before, right, as if AI and the speed of innovation wasn't hard enough, now, you know, a lot of, you know, what we're seeing is that it used to just be about growth. Now it's growth and profit, right? I mean, is this something that you guys are seeing across a lot of businesses in the space? And is that fundamentally changing anything, do you think?

I'll let others comment after me, but in the end, it's of course about profitable growth. And, and what I said, if you do your homework in terms of, uh, the decline, the growth gap as we call it, so what are the gaps that we need to bridge with the interventions that we do, might be new products, repositioning, etc., etc. That is all. So if you understand this well, you can sort of filter out on what type of pathways you should start to look at. I mean, there's also many examples of basically that, um, how can we invest better in, in even our media, right? There's so many things on— if you understand your business case, your P&L, and how the business is built, and you dissect each of these elements, you can find first of all your efficiencies, a second You will learn also where do we decline, why, a bit to the point Joan mentioned, and see how we could improve that case.

Yeah, I was going to not say it quite so eloquently as you do, Mischa, but I think it does come back to, yeah, that question of the P&L. And I suppose I would play devil's advocate and maybe challenge what does profitable growth mean, because surely that's what everyone wants anyway. And each each different product comes with a different flavor in terms of what profit is from whatever gross margins there are, volume, etc. So there's a number of different dimensions. It does essentially come back to that P&L question and what does it look like and what are you trying to fix within there. And then what are the mechanics that will help you fix that? To Misha's point, it could just be how you invest better into your top line. How you create better efficiencies, how you maybe mold the portfolio together that makes it just operate better as a total when you reposition it. So there's a number of different ways to look at it. But I guess, yeah, I would challenge the question of profitable growth versus growth. That's— the aim is for it to be profitable.

Sure.

I see a couple of— challenges in general for CPG. So one end is private labels growing sustainable over what, 20, 30 years and taking more and more space off the shelf. And the other stream you have startups doing niche products that solve specific solutions and grow directly. So traditional CPGs have those two challenges. So If they continue to do the basics, we'll struggle from one end with the private label winning there. And if they are not engaging with the consumers well enough, well, small startups might be actually going to these niches and taking it. So I think that's a transversal thing for all CPGs. And for me, the only reasonable solution is engaging well with that long-term base of consumers they have built through their stories, understand them well and serve them well through innovation. And that's where innovation makes sense, to understand well these consumers that they've been in many cases serving for decades or through all their other lives and understanding how their lives have been developed and what their lives have changed in terms of consumptions, in occasions and so on. but they will still want the company of a brand that's been there with them for their life. But it's fundamental to innovate understanding that paradigm, that it's not just being on the shelf, that their private label will have a very big space, and it's not just creating something new because then there's competition happening as well with clever startups with quick products that are addressing a specific niche.

Yeah, and we've— it is crazy how that— how much the private label stuff are going on the shelves now. We did an event recently where I was interviewing the founder of Poppi Soda, and that was about 3 days before the acquisition by Pepsi was announced, right? But I mean, just the speed at which those types of products grew and then copycats came, and it's just— it's kind of mind-boggling, honestly. So there were some questions in here around startups. So I do want to transition there a little bit more, just zoom in on the interacting with startups. And Alice from London was asking, how do we make it attractive for corporates to partner with early-stage startups? I know a lot of what we've been talking about here is either through acceleration models or other models, right? A lot of it is seeing it through the lens of de-risking. Right now, Sebastian, you said that. Is that, you know, Nicola, is that kind of the lens that you guys look at it from as well?

So this is a great topic for me. I've been an entrepreneur in my past, so I have a great connection with this and I can feel the pains as well for entrepreneurs trying to engage with startups, sorry, with large corporations. And the first thing is, is there's such different animals in a way that it's sometimes frustrating for a startup to get into a corporation and understanding their speeds and approaches. And my first advice there for startups that are looking there is advice from my own startup trying to get to the corporate world, is it might take you longer than the money you have in your wallet to get into a business with a large CPG. That was my experience in the pre-Nestlé startup world. And be cautious about that element, be cautious about that element because the timings for the two types of organizations are significantly different. The reality I've seen is most of these large corporations engage with startups, and they do engage with startups, but at the moment that they already have a level of traction or a size or structure that allows them to survive without necessarily needing the injection of short-term capital or money that you probably need as an early-stage startup. So my first advice is keep that in mind when you are approaching different corporations, otherwise you might suffer the consequences. At least what was my pain in the past trying to to go through these approaches.

I think, so to echo on what Sebastian says, this is something I hear a lot from startups, right? The impatience of getting a deal done with a corporate, and that most of the time makes it fail, right? They just don't understand that if you talk to one person, that internally they need to talk to 10 more before you can actually agree on things, right?

It makes most founders literally want to pull their hair out.

That's kind of the thing.

And the—

but they also need to understand on the flip side, so the— right, for most corporates, a startup is a big learning ground, and usually they go for the bigger ones because it's easier. But if you look at technology, you want to really— the early stage, because they can show you what's happening in 10 years from now. Um, and I think the trend where you see some corporates rather investing in a startup to do some research, to show that things are viable is becoming more interesting versus giving the same money to a research company and talk to a lot of consumers, right? So there's this shift in trend. So it's also how you position yourself in engaging, right? And it's not so much like you want to partner, but maybe just let's learn together first as a joint development, because I think most big corporates have big R&D, so they can probably build— already have built a lot of products. But the one thing they cannot do is test if it's actually viable in a consumer environment. So if you position yourself as a startup to make that happen— and it's also the point previous about the incubation— I don't believe we should do incubation anymore. Why build these things? I'd focus on what's happening from 0 to 36 months. Anything beyond, go learn with a startup or something else. It's much cheaper and faster than if any corporate would build it, right? It's kind of a mindset shift, but I think the knowledge is the— what you offer.

Yeah.

And how do you look at, at the smaller investments in this, in this context? So corporate startups—

so that's getting a little bit technical here, but let's, let's keep it to this innovation roadmap, right? So I know what I need to do to grow my business with my current assets, and then I also learned what Yeah, if there's a ceiling and I want to move beyond, I also know what I need to do to move beyond that part. I would then look at— I think, uh, it's kind of roulette, I think that's what you call it, Jonas. So, so what if I would give 10 startups €25,000 to work my product and show what they can do with it, right? It's— and, and the good ones will actually start doing it because they will know if I do well there's more coming.

Yeah.

And then you have this relationship, the, um, and if you invest small, right, on 10 places, you will learn a lot on what to do next and when or how. And we've seen this before, that we didn't realize the beginning when we built all these subscription startups, etc. Um, right, but corporates learn from that and then they incorporate it into their e-commerce strategy because they learn how to engage with companies, right? So the value is maybe not in the startup, but it might be in the application somewhere else. Um, and I think this is where, if you look at the current trend with no investments, food investment declining, etc., the value is in the learning platform.

Yeah, startups are all about learning.

Yeah, yeah. And the learning goal, I think, needs to be well aligned. Um, and, you know, to a certain extent commercially driven, I suppose, with expectations around the KPIs. Like, what are we expecting that startup to deliver? And agree those upfront so there's no myths around what the end result is going to be.

Exactly. Yeah, because the good ones will then start proving the value on your behalf instead of you doing it yourself. I think that's where— that probably doesn't sound that nice, but I think that's where the symbiosis between startups and corporates if you do that well.

Right. I agree. And it's— yeah, for the corporates, in a lot of cases, it's— and we've heard this a lot from some, some, from some corporations that it's, you know, for them, it's the customer development, right? Because that's something that, you know, requires a lot of iteration and a lot of fast-moving and stuff. And that can be challenging within the corporate context.

Yeah. And if there's only one way to learn, right, just put it out on the shelf for people to buy it.

Yeah, not focus— yeah, focus groups and things like that are only going to get you so far, right?

Etc.

Yeah. So I did have a question, another question here from Jonathan. Jonathan, great name, by the way, but you've been giving us some awesome questions. So thank you. You know, this one's pretty relevant too. And I knew that at some point we'd get to the build versus buy. Topic, right? Always a nice one. You know, it's one of those that I'm sure is very much art, not science, but, you know, build. So it's really build, incubate, or buy, right? Actually, I guess, and I know that, you know, there's no silver bullet here, but I would just love to hear, you know, just some of the trends that you guys are seeing in the space, how corporations are, you know, starting to look at this, and if you know, just recently again, like, in the current economy that we have right now, at the rate of innovation, if you guys are seeing, you know, the approaches to this change and evolve over time.

Okay, so what I've seen, it really depends how close you are from the core of your your business. So the closer you are to what you, you are, your bread and butter, the most likely you're going to build it and develop it yourself. So for a coffee company, probably coffee-related products will come from internal development. There might be exceptions, but overall, that's where your expertise is, being where your people are, and so on. The moment you go more to the outside and to new technologies or new new approaches, the, the, the more chances are that, that you are open to, to explore acquisitions or, or partnerships, because it's, it's, it's not necessarily what you know the best, or might be something completely new that is outside your comfort zone. So, uh, most likely building software for, uh, food companies, not necessarily the greatest way to spend their money. So it's, it's, it's, it's related to how close and far you are from the core I would say how open most of these companies are to do it internally or be open to explore it externally.

Yeah, I think there's always this intriguing thing, right? So what to— whom to work with and what to acquire in that sense. So usually corporates are used to acquire, also Sebastian's point is, when they're a little bit more mature, when they're a little bit more advanced and they have a footprint. The question always, when we move more from consumer-facing to R&D technology parts, working with a bigger startup usually means you're already outdated, right? Because the time they're big, right, it's common practice instead of new things. So, so I think the question unanswered, and I also don't have an answer, but right, where the market is moving to, right? So if we're not incubating, if venture capitalists are not investing in these food tech startups because they don't find this space attractive anymore, right, how do we as a corporate then partner with these early stage small 5, 10 really smart people, right, to kind of make it appealing? Because it always comes to a point when you have a technology and you want to incorporate it into your production line, yeah, you're not going to stop to build 5,000, to produce 5,000 items when you have 100,000 running per hour from the same unit, right? You're not going to do it. So at some point, that's what the struggle is. But I think the unanswered question here, that's, that's usually at the end of the week on top of my mind, how to fix this, is the, the timing for technology is small for corporate, because if you really want to learn that where it is, and what I see in acquisitions, they always buy too big. Which means it's profitable right now, but usually means for technology it's already outdated at the moment it's big because it's not future-proof. So I think that's where there's an additional dilemma to think about. This is the future challenge, and I think— and I just want to drop it here— this is what intrigues me all the time. Fix this.

It is intriguing, and we discuss it quite often. It's like It's also a bit like, um, indeed, the timing, right? So there's, there's a, a concept by— I think it was Rita McGrath— about inflection points, is that if you can understand, um, at the outsides of the market what type of new behavior is coming, which potentially can be making your business less relevant. If you get a feeling on a quantitative side on how fast this type of behavior is spreading through society or through a particular market, you can get a bit of a better sense of, um, okay, can I now find the right type of young team startups that sort of maybe are addressing this need already and follow them, right? So how is that progressing also from a commercial standpoint. But it's difficult to see those small things, and because companies, large companies especially, are not focused on these small things. So you also see, um, we can look at the same research report and we both see different things, right? So, and I think sometimes we are maybe a bit more trained to look at the things that are standing out, not because it is proven by 1,000 people, but anomalies, right? Things that do not match, right? So, and then if it doesn't match, why doesn't it match? And is it— does this match— if there's a mismatch on a bigger scale, and how fast is it? You get sort of a sense on timing, perspective, consumer behavior changing. You can look for potential technologies that are already addressing this, because you— is correct. And there's a lot of reports around these acquisitions also in the F&B And you see that a lot of them are not delivering on the expected, yeah, returns or ambition, whatever you want to call it.

Maybe just, they typically, it's the success rate, right? And you can define success in a lot of different ways, right? It's traditionally pretty poor.

Maybe just to add to what Misha said, so if you look at, I think skincare, beauty and skincare is kind of a a good example of where the trend is moving to. If you look at L'Oréal, L'Oréal is more inclined to invest 100, 250K, million in startups just to learn, right, and see how the market evolves before they acquire. Um, and they're, they're the ones that actually continue to grow in the market and outpace the trends compared to others. And so, so the From the outside, right, this looks like a good thing to reevaluate for yourself. And also to the point about startups, if this is true, then as a startup, it's not your point to sell your product, it's the point to sell your learning platform. There's a different mindset and shift on how to work with, right? So a joint development agreement is probably more interesting than selling, right? Can you purchase 5,000 kilograms of my product.

And just quickly, from my perspective too, it's— there was a point a couple years ago, I think, when, um, especially in the, you know, the CPG space, there was the funding available for startups was few and far between, right? It was really, really tough, and a lot of corporates were stepping up. But now, you know, natural ebbs and flows, there's so much money went to AI and stuff that now investors are starting to move back. We're seeing this trend happen pretty quickly, and it's only accelerating with stories like Poppy and things like that, right? Back into that space. So I think it's exciting. And I, yeah, I would assume that probably some of those bets would be increasing, right? 'Cause I mean, we set $250,000 into a lot of different companies. You know, that starts to add up, right? Even for a large business.

Yeah, exactly. But you could also do 10 times 25,000 and actually see if the technology— but it's kind of a different way of playing it and filtering it. I think the essence is to the point, I think, what Sebastian mentioned, right? So the more it's consumer-focused is today, the more R&D-focused technology probably is future. So this might be kind of already choosing what to use. And if you look at innovation as a skill set, I'm running this normally, I'm running accelerator, running incubator, invest, could also be applicable to the kind of topic you have. So you need to manage all or have all in your tool belt, but you can apply it differently based on the topic you have.

So we're coming up on time here. So I do have a last question that I want to ask, and thank you for everybody in the audience. When we do wrap up here, people can stay as long as they want. There's networking rooms, and I do encourage people to take advantage of those. But, you know, there are some startup founders here, and this is something for me as well, right? Understanding— I obviously come much more from a startup background than I do the enterprise background. You know, if you guys were if you could tell a startup, right? And there's a lot of startups, some in attendance today, but there's plenty of them out there who literally, like, they wake up in the morning and their dream is to start, you know, doing a successful pilot or POC with organizations like yours, right? With big organizations. And, you know, but at the same time, it looked like you brought up, Sebastian, right? Like they have constraints and these things are going to take time. Anyway, long way for me to say, like, is there just like one piece of advice or something that you would give to those types of organizations, those startups, to, you know, to maybe just make those, those puzzle pieces fit together a little bit, and just some advice for them?

If I can start this one, my, my best advice is, is a good startup will find a business partner at some point, and it will happen with a large corporation. Corporation, it might take long or much longer than you expected. So, so my best advice is, is you will need to do that in parallel on another process to keep your food on the table for a few years until you have the size and until you have all the procurement reviews and the financials and vettings and all those things that large organizations require. So if your proposal is good, it will find its space at some point with one organization or another, but you need to make sure that you have a long runway to make that thing happen and don't basically kill your company in the process through the bureaucracy you will find in, in any large corporation, because that's the nature of these corporations.

And I, I've seen exactly that happen many, many times. Um, you know, if the startup is relying on those types of deals for runway, that usually doesn't end well, um, at the early stages. Uh, yeah. Um, does anyone else have some thoughts on it?

They're coming.

Uh, a big A bit back to the points made, but, um, so if you, you have a company in a particular category or industry, um, if you look at established brands— let's stick to the CPG, right? You have established brands, large ones. Um, yeah, what can you learn in terms of, um, what are they looking for in terms of their next steps? Right, so what are, what are the type of challenges they now are facing? Established brands in general struggle with, for example, recruiting new generations of consumers. So it's sort of to understand really what, what is it that these, that your potential partners are trying to solve, right? A bit to Joon's point, can you step up as an actionable joint— how do you call it— joint development partners, something like that, right? To sort of help them solve their problem, right? So yeah, it comes down— it comes a bit down to understanding that better than everybody else, basically.

Yeah, I think it's a two-way street, isn't it? And sometimes that gets lost between the two parties. But at the end of the day, a partnership is goes both ways. So understanding each other is super critical, and within that, the patience to know that one has to move faster than the other one can, so I'm finding the common ground.

I think from the startup experience, I think, think about the added value, right? So what do you do different? So I talk to Gen Z, I talk to Gen Alpha, I have a product that fixes, right, something that's on the other side of the table they cannot do. Um, but then, right, so just do something different. What's the added value you can bring to the other party on the table? And because if you sell overlap, right, it doesn't happen. I think that's the second one. And then also from a startup perspective, try to understand how decision-making works. Just ask a question, right? If I would offer you 10K, right, how— what would it take to sign that? And the understanding means that you can also then manage the process a little bit. So let's talk to the other one, I need to do a demo, etc. So you can manage that. But most of the times we forget that we go out, I talk to Sebastian, Sebastian is very happy, I go out cheering outside, we have a deal. Yeah, you're far away from a deal, right? Not saying that Sebastian is not making a deal, but you also have to talk to people there. Maybe you have to talk to 3 companies because that's a company policy, right? You don't know. But so think about added value, but also think about how ask how the process works. And that's something we usually forget to do, but understanding that also makes— you understand this takes 6 months, okay, we'll manage, but I also will continue doing other things. That's, that's the, um, at least the advice I would give, because this is usually the feedback I get when they talk to corporates. They're always happy, and then it takes 6 months. Not saying nothing is happening, but you have internal improvements, and that's Yeah, that's kind of feels like things disappear.

And just as a closing note here too, we nod a lot, say yes, very good, very good, and then it takes time. Um, but as you were saying, Jerome, like bringing the value-add, right? And we've been talking a lot just about it.

It's—

I think a lot of startups look at it purely from a product standpoint, right? Like, oh, we have a product, which will solve your problem really. But what you're getting into there is that it's much deeper. It's bringing that learning, right? Oh, I understand this market better than you do, or I understand where this is going, this trend or this that you, you know, just that I think bringing that to the table as well is something that I see a lot of startups kind of overlook where they're, you know, they almost take sort of the investor pitch kind of mindset, right? Where it's like, here's the product, here's, you know, here are the features, here's the problem it solves, blah blah, right? And that's— you need to go a little bit deeper, sounds like.

Yeah, yeah. It just doesn't— maybe last example, right? So when TikTok launched for the first time, right, it was kind of a platform for 12-year-olds, etc. So there was a company here in Netherlands and they launched it, and an 18-year-old fresh out of high school, and he just started emailing corporate CEOs saying, stop talking to those 35, 45-year-old brand managers because they don't understand. You need to talk to me. And the value was that he was actually the audience. So he got a seat on the table everywhere, built his company, and he's now one of the quickest growing agencies here in the Netherlands just because the niche was my added value is I am that person, right? That makes you unique. And just, this is where understanding this, this is how you make yourself valuable. Enough for both parties to be interesting. And I think this is, as a small analogy, this is exactly what you need to do. And if you understand this well enough, that's when success will come for both parties, also for the corporate, because then they understand your one value and also makes probably more interesting and intriguing to partner with.

Amazing. All right, well, thank you guys. You all stayed over here, and I know it's It's getting time to probably commute home and things like that for those in Europe. I just want to say thank you again, Sebastian, Jeroen, Nicola, Mischa. This was a great conversation. Thank you everybody in the audience that were asking questions. We will be putting a recording together for this for everybody that did register. You can keep a lookout for that. Now we're going to close this the stage portion of the event and go back to the networking rooms. So encourage anybody, if you want to meet some other like-minded people, we leave those rooms open for as long as people are hanging out. All right, thanks again for joining everybody. Have a great day.

Thank you, guys.

Thank you.