ILI.DIGITAL: Digital transformation affects all industries and companies. How does the digital transformation change the food industry and Nestlé?
Béatrice Guillaume-Grabisch: We see digitalization as an opportunity for a better understanding of the consumer: What do consumers really want? Which trends do they follow? Which experiences do they share with their peer groups? Digitalization brings us closer to the consumers – we can listen to them, we can ask them, we can interact with them. By listening and asking accordingly we learn what they need, so we can develop new products and services, especially for younger target groups.
Digitalization has a huge impact on our industry: Smartphone apps help customers pick the most nutritious or most sustainable product, help them count the calories or compare prices. Today’s consumers are more informed than they were 20 years ago – technology provides them with this information.
Digital transformation makes us faster as a company and more cooperative. And we have to be faster, more agile, more connected and open to our consumer needs. Since the product and brand portfolio changes rapidly we have to innovate permanently– that’s the only way to consolidate our front running position. Since there are changes in distribution channels and processes we have to cooperate more with retailers as well as e-commerce dealers and share knowledge. And at the end we see changes in our corporate culture – digitalization changes our mindsets. This helps us to become quicker in adopting ideas, more creative in developing new business models and more cooperative and empathic towards external and internal partners and stakeholders.
In the digitalized world it is not enough to simply offer some kinds of “products”. These must be integrated in digital and stationary services. Nestlé Germany is transforming itself from a traditional food manufacturer into a digitally agile company. While we are transforming ourselves internally, we also want to grow and operate in the market.
Many developments and trends have an impact on the future of Nestlé. What are the biggest game changers?
Actually, we identified five big game changers that we have to deal with – as an industry as well as a company.
First of all and without doubt: Our biggest challenge is reputation of the food industry as a whole – this reputation is under pressure and we have to work meticulously and around-the-clock on maintaining the high quality of our products. In digital times like these news or even rumors about a single problem with a – let’s say: a glass splinter in a product – will spread tremendously fast, and this is a good thing: It helps preventing major incidents. On the other hand: Technology helps us to identify possible problems at an early stage. We are improving production processes by using machine learning techniques, for example. We always worked hard on safeguarding the quality of our products and technology helps us to maintain it on a very high level.
The second game changer are consumer trends: Our nutritional habits are a statement about our personalities. Instagram is full of these statements: Do we eat meat or not? Do we consume whole grains or not? Are we buying exotic food or regionally grown groceries? Organic food, veggie and lactose free-products are increasing constantly. But not only what we eat, but also how, when, where and with whom we prepare and consume a meal is important. We at Nestlé Germany have developed a “Future kitchen” that supports people in preparing their food and provides individual services – including the entire knowledge of the Internet. I sometimes wished I had this kitchen at home as well…
Then there is a third game changer: It’s the way we shop and the way groceries are delivered to our homes. Drones or self-driving cars may deliver everything we need, Augmented Reality will help us shop more informed and more precisely. In the future, more and more consumers might do their shopping for basic food supplies online while supermarkets will provide more offline inspiration at the local stores. As a result, retail will change further. At Nestlé we cooperate with various relevant e-commerce merchants, share our knowledge and try to give our consumers the best possible information and inspiration of our brands and products alongside with the best offers.
Which leads me to the 4th game changer we see: Digital Enterprise Transformation itself. If classic retail cannot escape this transformation, neither can a company like Nestlé. We have to turn our company’s structures upside down to survive in the long run, be fast, agile and open-minded and review every single process in terms of efficiencies.
And last but not least we see a rapid change in the dynamics of our societies. There are more single households, people tend to live in cities and continuously eat and cook less at home. We, especially more women than before, spend more hours at work than fifty years ago – and we all consume differently: constant snacking compensates for one meal per day. This changes the function of the kitchen and the needs of people regarding products and services.
How do you make sure that you master all the challenges that come with Digitalization and use the opportunities?
Mastering all the challenges only works well if we have people with expertise taking care of it. At Nestlé we implemented more than 20 so-called Digital Acceleration Teams (DAT) all over the globe, one also at our Nestlé Germany Headquarter in Frankfurt. They are staffed with internal digital experts that consult the whole company. These Digital Acceleration Teams are at the spearhead of the transformation process and have one mission: Transforming the whole company.
They are experienced in all new technologies, are connected with managers of Facebook, Google and Amazon alike, and are specialists in new forms of leadership and organizational formats like SCRUM or Reverse Mentoring or Design thinking.
This team has already changed Nestlé Germany in the past with their enthusiasm and startup-like thinking. We arrange digital breakfasts and Digital Community Days where employees from all different departments can share their digital experience and knowledge with the company. We chat and share information via our internal “Chatter” – the entire management is just a tag away…Our goal is to break up silos, inspire and educate every single person at Nestlé Germany. Since 2016, we have trained over 3.000 employees in digital topics and realized various lighthouse projects – with real business impact. As winning project of our Digital Challenge 2016, we created our Maggi Chatbot “KIM” in collaboration with the start-up Mercury.ai. Chatbot KIM – which stands for “Kitchen Intelligence (by) Maggi” – is the first digital cooking assistant and offers 24/7 inspiration and tips for cooking with access to more than 3,500 recipes as well as numerous recipe videos and how-to’s. It also allows direct ordering of ingredients for recipes from trading partners. KIM is very successfully accepted, especially by younger users: two thirds of users are between 18 and 34 years old. We are proud of this success, and encourage all project teams and every employee from marketing over sales, supply chain or production to follow their ideas. With collective and creative power we can realize new services, innovations and efficiencies – which should in the end all serve the consumer.
The entire transformation process is structured and systematic, but with the creative freedom to test, to try, to experiment.
We show our efforts publically in Frankfurt where we exhibit the future of food in the year 2030. The “Future Kitchen” I mentioned earlier is a central part of this exhibition, our cute little robot NesPepper is welcoming our guests and showing them around. We use our Competence Center to get in dialogue with external partners and experts such as NGOs or scientists, digital consultants, retail, futurists and dietetics.
We cannot master this great challenge alone – Digital Transformation is a mutual task where everybody fulfils a role – even the CEO.
Digital Transformation is also influencing leadership. Nestlé used the reverse mentoring approach to connect managers with digital natives from Generation Z. How was your experience using this method?
I was a mentee myself! A young student led me through Snapchat and Instagram Stories and showed me how they as digital natives organize their days on a digital and mobile basis. This was a mind blowing experience for both of us – and I really appreciate the chance to learn from the best, regardless of their age or career level. Those who have the knowledge teach and help those who don’t yet – it’s such an easy but driving leadership approach for every individual person and the whole company! It is the fastest way to learn how our target groups think, what they need, what they demand from us as the leading food and beverage company. Reverse Mentoring for instance is just one of several new leadership tools we’ve adopted from start-ups. We try others as well: As I mentioned before, in our Digital Challenge we encourage diverse teams to compete with each other in digital projects. It’s like a sprint: the winners are funded by the company with a 6-digit budget but have to accomplish their project within 100 days. We really breathe in start-up atmosphere here at Nestlé Germany.
What are your goals regarding the digital transformation of Nestlé for the next 12 months?
Nestlé Germany’s motto for 2018:“Strong together – for internal transformation and market success“. Transformation is an ongoing process, a permanent beta status if you will. So the most important goal is to steady this process and to anchor this new mind-set in all levels and areas of the company. My role as the head of the German Nestlé market is clear: giving orientation, creating motivation and inspiration, and promoting start-up ideas. Together with the management level we have to identify and pick up trends at an early stage and further develop agile thinking and work. Many business models can no longer be implemented alone – we are moving from the industrial to the network economy. Therefore, we have to connect with start-ups and expand strategic partnerships, as networking is the prerequisite for sustainable growth and the best services for consumers.
All this tasks follow our mutual digital strategy that we deployed everywhere in the company. In 2018 I hope that we will see more cross-functional teams that deal with more fields of development and enablers. Agility and speed are key factors for a company today to achieve their goals – I’m pretty sure that we are on the right track thanks to all our employees who back this strategy all over the company!