How Appliance-Maker Jarden is Testing New Business Models

November 4, 2015

Origins of the Program

I’ve been at Jarden for a little over 10 years now. [Around that time,] there was recognition by our executive team that our core business was really good at executing and operating the existing businesses and product categories, but it was difficult for them to work on far-from-core ideas and opportunities.

It’s not that these ideas didn’t exist. We had many great ideas across the organization. But they were difficult to develop for the core business … due to time, investment needed, and new capabilities needed.

I was one of the first external hires into that small team at the time, and this Gen 1.0, as we like to call it. That team really was a product innovation team. We focused on creating new product categories for the business. [The group was called New Sources of Growth, or NSG.]

In many ways, we took a bottoms-up approach to ideas. We identified them through the small team. We looked for members of the organization, the senior team, to buy into those ideas, [and] vote on if they liked them or not.

We were rather disconnected from the core business. We needed separation to be able to work on new things, but really there wasn’t much interaction with core teams. We were off kind of as a skunkworks team…

An Early Hit

We developed a business called the Margaritaville Frozen Concoction Maker business. We brought commercial quality beverage-making to the consumer at home.

This was at a price point that was significantly higher than our traditional price points for our core appliance businesses. This created a highly-successful franchise for us. It created a new product category, [and] strong retail sales for many years.

A few of the challenges and issues we faced: ideas took a lot of time to develop. Since we were doing white space innovation for the first time, we weren’t efficient at it yet. There’s a lot of learnings to be uncovered.

Some ideas weren’t as successful as we would have liked them to be in the long run. We had an initiative called skybar, right, around the wine and spirit space. Another [was] Zarafina, which was a premium tea-maker. In many ways, it was ahead of its time when we launched it nearly nine years ago.

Both of those were more niche businesses, and didn’t turn into strong financial anchors for the company, but were instrumental in our learning [about] what we wanted innovation to be as we went forward.

[In that era,] we were doing a little more of pushing than pulling. We came up with ideas and we were selling them into the organization, versus the organization having opportunity spaces that they felt were meaningful for their long-term business success, and us focusing on those areas.

Gen 2.0: Dedicated Staff and Funding

To some extent, we became a victim of our own success. We ended up managing the new innovations we created, and essentially became more of a small business unit within the larger organization.

We hit the reset button on NSG and we formed this new team called Transformational Innovation, which I took a leadership role on. The goal was to get back to white space innovation, but take all of the learnings and insights we had from Gen 1.0 of our innovation endeavors.

Instead of just being about product innovation and creating products to put in market, we focused a lot more on business model innovation. How do we create value and generate profit for the company in new ways?

That happened about five years ago. [Now,] we have a small dedicated team, 100 percent dedicated resources, of people that really have an entrepreneurial mindset, corporate entrepreneurs, people who are comfortable with the risk and ambiguity, but at the same time understand that we are operating in a publicly-traded company. We have processes and procedures and communication flow that have to occur.

[Having] people with the right mindset and having them be focused on innovation, rather than borrowing a percentage of someone’s time here and there…is much more effective at moving disruptive ideas forward quickly.

Another was in terms of funding. We set up dedicated funding on an annual basis. That way, we weren’t siphoning investment from other business units or business initiatives. This dedicated budget is approved every year.

Executive Oversight

Our senior [leadership] team, essentially they act to us as what I’ll call internal venture capitalists. Our team presents ideas. The senior team then releases funds as we demonstrate progress on our milestones and metrics.

It’s this [reporting to] and alignment from the executive leadership team that’s been key. We’re not a skunkworks team tucked away in the business units, and we’re not competing for funding or resources.

One of the key operating parameters that’s changed is instead of us organically just trying to come up with ideas and sell the organization on them, the initiatives that we’re working on are part of the long-term business vision objectives of the company.

The senior team has created what they call a JCS 2020 Vision. It defines the geographies we’ll play in, size of the business, profitability. We align our initiatives with that long-term vision.

I report to an SVP of Strategic Development and Global Marketing, and she reports to our CEO.

Getting Business Unit Leaders Involved

Collaboration with the business team has really been key. That’s been one of the key success factors… We help to identify opportunities that [the business units] would like to pursue three to five years out, but today they don’t have the resources, the time, the bandwidth, the capabilities to go after them.

When we align on those opportunity spaces, we actually bring a business unit champion and have them be part of that initiative team. This is typically a more senior individual, a director level or VP level or higher. They’re not involved in it day-to-day. They don’t sit with us. They’re not involved in everything we do, but they are involved in direction-setting, in key decisions, and even in long-term integration planning.

We work with our counterparts to effectively determine where in the organization this new business will reside in the future as it becomes successful.

Building the Team

We’ve had individuals in the organization that are very creative, very entrepreneurially-minded, but they may be working on a core business. We’ve identified those individuals and given them new career opportunities by having them become part of Transformational Innovation.

At the same time, working in the white space is really all about thinking expansively and bringing divergent thinking and different mindsets to the team. So we hired people from the outside, from very different industries — from food and beverage, from consulting, not just traditional consumer appliance products folks. That’s really given us a good diversity of thinking as we look at creating white space opportunities.

Developing New Business Models, like Meals by Subscription

Our Crock-Pot Slow Cooker brand is a brand that’s been around for decades, it has great heritage.

The business team came to us and said, “Can you help us to re-imagine that brand in the future? How can we take the great appliance products that we have and create new products and solutions around those?”

We took that and turned it into a new business opportunity by creating a direct-to-home meal subscription model. This is very, very different than anything we’d done before.

…Instead of being about the appliance alone and features and functions and product specs, it now became about delicious taste and nutrition and the emotional aspect of feeding your family on a daily basis.

It also was about direct-to-consumer, and Jarden, primarily our business is through retail. We’re shipping frozen meals to our consumers who already know, love, and trust the Crock-Pot brand. That was very different for us, and it was a high-frequency model where we’re communicating with the consumer on a weekly and monthly basis. This initiative has been very transformational. It’s different than anything we’ve ever done.

It’s relatively small today. It’s continuing to incubate, but it’s a business model example that for us shows how we can get into other types of spaces [like consumables.]

Partnering for Speed

If we want to move fast, [we learned that it’s] going to be a long learning curve for us to build the capabilities organically. Initially, we try to partner, and “get smart fast” by working with partners that can elevate our acumen very quickly.

[With Crock-Pot Cuisine, we] partnered with a meal development company, we partnered with a frozen food fulfillment company, and we’ve had a number of [other] partners who have helped to get this business off the ground.

[As a result, it] took us less than a year to get up and running. This was viewed as quick-to-market… Now we’re continuing to iterate on the model.

[With another new product, Draftmark,] we partnered with Anheuser-Busch, the world’s largest beer company, to develop and introduce a unique system that brings fresh draft beer to the home in a new and different way. Consumers really love this proposition. Draft beer has a perception of being fresh, of being refreshing, of being different than bottled or canned beer…

On the Jarden Consumer Solutions side, we’re experts in appliance development and go-to-market execution. On the Anheuser-Busch side, they know consumer communication. They obviously know beer and their brand, and they are world leaders in how to advertise and get consumers to want new products.

This created a market innovation that neither of us could have done in isolation. It would have taken us a really long time to try to develop those complementary skills…

It’s been incubating regionally around the country and is working towards national scale now.

Testing New Products on Crowdfunding Sites

[A team here] created a product called the Nuyu Sleep System. It’s a product that uses a temperature-controlled mattress pad to naturally adjust to your circadian rhythm, and really helps with getting a great night’s sleep without having to resort to drugs or supplements or any other substances.

It’s very different for us. We knew that putting this product on the retail shelf would probably lead to a very quick death of the product. So instead, we’ve launched that product through Indiegogo.

The campaign’s been running. We’ve exceeded our initial funding goal, and the goal was not to get money to go build the product. We were already doing that, and we knew we could do it. [The launch campaign on the site this fall has raised more than $100,000.]

The goal was really to interact with the early adopters of new technology and new products so we could get feedback before we even launched it. …How do we engage customers early and often in the process, before we’re even asking people to vote with their wallet and actually buy the product?


For us and for many large companies that like stable linear growth, we have to show more of a hockey stick curve. The question that we ask [of] the organization is, if we can get to this point where we are getting to the inflection point of the hockey stick, is that something that you are willing to wait for, willing to invest in, and willing to get there? What we’ll show you while we’re in more of the flat portion of the growth curve is we’ll continue to show progress milestones.

It’s not necessarily about how big this is going to be, but rather are we getting this initiative on the right trajectory for long-term success? Are we demonstrating that we’re knocking off these milestones on a periodic basis to work our way towards that inflection point where it starts to get bigger, faster.

That’s been real beneficial for us, [in terms of] how we buy patience and get people to buy into the future vision. Then they become part of the solution, [and it’s] not just us working in isolation…

Getting Better-Quality Guidance from Customers

We like to do a lot of concept-testing early. From the “back of the napkin sketch,” to getting out, talking to consumers, and asking for constant validation. Asking would they buy into this concept.

I can give you an example that I can talk about at a high level. For us, durable/consumable is an important business model for us. We have something like FoodSaver, where we have vacuum seal appliances and the bags. The bags create a recurring consumable revenue stream.

We’re creating more businesses like this in other spaces, [like] the beverage space. We plan to introduce that next year. That’s one where we’re early on, even when we had this crude, rough prototype, we put it out in front of consumers and said, “Would you buy into this proposition if you had this product at home?”

Before we ever put money into design, or we ever did a tooled-up product, we were out starting to do some customer validation of the concept. We actually learned a lot in those early stages that steered the direction of where we went with the product development process and then the tooling.

…One of the challenges that we found is trying to quantify that, when consumers aren’t voting with their wallet — when we are just asking them [about] likability of concepts and purchase intent, directionally we could get a good read, but it’s hard to take that back and build quantitative models from those learnings.

In general, consumers want to like new things. More recently, we’ve done an IHUT [in-home use test] with a concept that is getting very close to launch. There, we did a deprivation study. In the early stages of the IHUT, we paid [the consumers] to be participants in the study. At the end of the study, we said, “If you give us the money back, we will let you keep the unit in your home for X amount of weeks going forward.” It’s a way to put financial economics in the consumer’s mind to find the likability of the concept and the purchase intent before we’ve even gone to market.

Spot, Shape, Seize, and Scale

In the innovation space, we realized that we’re working with high ambiguity and uncertainty. We worked with Innosight, the innovation and strategy consulting firm out of Boston. They helped us create a process that was more appropriate for white space innovation.

The spot stage is about identifying, evaluating, and prioritizing what we call the “jobs to be done,” getting deep into consumer needs. It’s not about the product yet. It’s all about the opportunity space that consumers need.

The shape phase…is the core of business development. It’s starting to create potential solutions, but even more importantly, it is developing our business model hypotheses. We progress through the product and the initial start on how to get to market. We’re doing a lot of iterative work, a lot of customer development, [putting] quick concepts in front of people, quick iterations of solutions.

The third phase is called seize. This is really where the rubber meets the road. This is the iterative test-and-learn phase where we’re putting products in market. So, earlier in the Indiegogo example, that’s an example of test-and-learn. That’s where consumers are voting with their wallets, and it can take a while to get the business model dialed in and working as desired. That’s the seize stage. At that point, we begin transition [the project] to the business unit.

The fourth phase is scale. That’s where we know what the business model is that works. We’re investing behind it. We’re putting more organizational resources behind it. We’re leveraging the full scale of the company to drive the business and grow it quickly.

Engaging with Startups and Entrepreneurs

We’ve met some great entrepreneurs, great startups, great technologists on the outside. We’ve begun to develop what I would call it a more porous membrane between the walls of our company and the technologists and entrepreneurs…on the outside.

We engage with them in different ways. We’ve actually brought in an entrepreneur who created a food startup company in New York City; he helped us to run Crock-Pot Cuisine and get it off the ground. That’s an example of bringing an entrepreneur in to lead an initiative and get it moving. We knew it would be a short period of time that he would be working with us, but it was to help create the trajectory for the business.

Similarly, on the technology side, we have found technologies in the appliance space that are unique. We know it’s going to be hard for a small company to commercialize [the technology,] and we’ve partnered to bring those technologies in through licensing or acquisition. We can leverage our might and our scale, manufacturing know-how, our distribution power to bring those to market much faster. It’s more efficient for both parties.

We’re not creating technology from scratch, and the small technology company isn’t trying to figure out the whole long road to commercialization of their startup technology.

For us as a company, that may be the next frontier — Gen 3.0, if you will — of transformational and white space innovation for the company…developing an ecosystem and a more robust process for interaction with those on the outside.