Manu Anand’s keynote session at the Retail Leadership Summit, 2013 showed that innovation is not the prerogative of just owner-entrepreneur driven organizations.

Manu Anand, Chairman, PepsiCo, India Region

Perhaps it has something to do with the category – food and beverages – which is inherently local, but PepsiCo India has much to showcase on its innovation “curriculum vitae”.   The keynote address focused on what makes innovation “tick”.  While most people think “product” when they think innovation, its also about packaging and process

Part of the process of innovating is asking tough questions – for example, asking the question of “how much can this idea contribute to same store sales increase, to cash memo size and to customer footfalls” – the three most critical metrics for retailers in India.

Pepsi’s model for innovation focuses on insights – on asking customers the right questions. In the case of oats – they were up against a tough sell. Oats has always been positioned as a “healthy” breakfast option – which in the customers mind translates to “tasteless”.   By “repackaging” this much maligned breakfast dish with a focus on taste and including recipes on its packets, Pepsi has succeeded in breaking the main barrier to adoption.  The result? 15% of sales in the category are now flavored oats.

Other examples abound – from Nimbooz – which is part of the overall directional drive to showcase the Indian nimbu-paani in the FMCG’s repertoire – multipacks and party packs which provides serving sizes for various needs, to branded vending machines at high traffic points such as airports, to changing the visual look of a product (e.g. their limited edition “glow in the dark” Mountain Dew).

They have learnt innovation through collaboration with trade. For example – during the IPLs they found that creating campaigns which highlight the product, will result in greater sales offtake, as top of mind recall is about the experience of watching the match which includes snacking and drinks.  Thus, the IPL is now a separate “season”.

Perhaps the best example is of Kurkure. The equipment that created the product was part of a failed global experiment, and related depreciation costs were a drag on the P&L. By juxtapositioning a quintessentially Indian taste onto the product, backed by a “hatke” advertising campaign,  they delivered a success story.

Kurkure’s most important contribution is simply that it has reinforced the lesson that local empowerment can deliver innovation.  Tellingly, today, when internal teams present to Pepsi’s global Board, they are now asked “Whats your Kurkure?”.

So, all those B-school graduates who think that they have to make a trade-off between “passion” and “pay” can heave a sigh of relief. Innovation is alive and “kurkure-ing” in large MNCs.