With all of the buzz about plant-based nutrition, Kellogg Company can legitimately look to its roots and assert that “we’ve been doing that forever,” in the words of Nigel Hughes.
Hughes is Senior Vice President of Global R&D at Kellogg, a role he has held since 2017. The company spent about $135 million on R&D in 2020, out of overall revenue of $13 billion that year.
Hughes spoke with InnoLead about getting plant-based protein to an affordable price point; how the company is moving from focus groups to in-market testing; and why the company hires “food designers” rather than food scientists.
On plant-based proteins. We’re a plant-based food company, and everybody started talking about plant-based foods. We’ve been doing that forever. It has been an awakening of sorts, and we’re playing in these spaces. The Kellogg brand has extraordinarily high trust levels with people.
Ultimately, we are not Impossible Burger. We are about everyday, accessible food. We’re not interesting in owning mycoprotein [production capability, a protein that uses mushrooms as a key ingredient], but we invested in it through our venture fund. We want a close link so we can design food with it, be ahead of the curve.
Getting to an accessible price point. I was inspired many years ago when I went to see the guys at Hasbro. In my fantasy head, I expected to see lots of kids playing with toys. [But they told me that] there are two drivers from their point of view. The first is co-branding toys [with popular entertainment properties.] The more interesting part was, they wanted to bring higher and higher levels of interactivity to their toys. They told me that their most important input is the cost of microchips, and they had highly sophisticated models and programs on accessing microchips. That stuck with me for a long time.
Our core skill is food design, but how can we track to the accessible price point for those technologies?
If you take an area like plant-based protein, we now can see a map to a complete cost reframe on plant-based protein. You’ve got soy protein, and you’re improving the cost through AI-driven plant breeding programs. Then you’ve got people on the front edge, who are working on fermented proteins and the like. Our core skill is food design, but how can we track to the accessible price point for those technologies? [We want to be able to say that] in one year’s time, we can introduce this benefit to that food, because the cost profile will be right. Or, in three years time, we’ll be able to introduce it to this food.
Tracking ingredient innovation. Two or three years ago, it looked like the whole food world was going to be all startups. It was like 1996 and the dot-com boom. We know what happened after that, when a lot of those companies didn’t exist anymore.
I’m not suggesting that the role of startups in food and food systems isn’t significant; it will continue to be. But two or three years ago, virtually every startup was a branded food startup. What has changed is a huge flip toward food ingredient startups. That is really important for us. If anything has happened in our agenda in the past few years, the pressure on inflation and the robustness of our supply chain mean that we have had to go back and be sure we’re as clear as we can be on our core technology basis — driving the value of the assets we’ve got, and future proofing them.
Creating culturally-relevant foods. The world of our R&D people has two differences. The first one is we have put a lot more money, time, and effort behind culinary innovation and being ahead of food trends, that has been a huge deal for us. In the end, when we do design foods, we can no longer design foods that are the colonialist flake made in Battle Creek, Michigan, that are going to take over the world. We need to create culturally relevant foods. We created a chef-in-residency program [recently, focused] around African-American chefs.
Our consumer testing completely changed. We are mass-sourcing consumer input.
New approaches to testing. The second point is, we’re doing a ton to digitize a lot of aspects of our internal capabilities. Our consumer testing completely changed. We are mass-sourcing consumer input. We’re not doing as much in small focus groups.
As an example, we’re working with a group called FlavorWiki. When you go out and buy food, you then give feedback on that food. So we’re getting much broader input with less granularity.
We’ve set up our internal pilot capabilities so they can produce food for sale, and be FDA compliant and EU compliant. We do significantly less concept testing, and way more direct test-and-learn. That involves putting food out in the marketplace. Right now we’re running a test-and-learn in Europe on a paper liner for a cereal box, with Tesco. That one is running for an eight-week period. Then, we’ll work with them to analyze the data and understand where we are. It builds stronger relationships.
Minimizing hand-offs. We don’t have food scientists and food developers anymore. We have food designers, because of that notion of design being much more integrated. They need to have the branding skill set. They need to understand the regulatory and well-being landscape, and elements of the supply chain, because that’s going to give you more solution options to drive to an ultimate consumer solution.
We’ve minimized the number of hand-offs [from one department to another.] People carry the whole project from start to finish. We continue to have some technical specialists — but there a lot more people who have a broader remit to drive against the silos that so easily occur in big companies.
Working more remotely has meant that it didn’t matter where you were — you had your place at the table.
Running a more distributed team team. The biggest difference we found [as a result of the pandemic and working from home] was that you can get more inclusive. You can get more voices from adjacent people. Being a North America headquartered business has advantages and disadvantages. Working more remotely has meant that it didn’t matter where you were — you had your place at the table.
You can enroll so many more people in communication about broader objectives of the company. In the past, we’d have done [meetings for the] top 100 or top 150 people, and then would have hoped it would cascade. You can now reach a lot more people really quickly. We can hire people across different geographies; my head of well-being is based in Dublin. It was always something we thought we should do, but there was big inertia.