Optimizing Innovation - Patrick O'Riordan of Anheuser Busch-InBev

by Braden Kelley

We are happy to bring you some of the key points and insights from Patrick O'Riordan's talk at the Optimizing Innovation Conference, which was held October 21-22, 2009 in New York City.

Patrick O'Riordan, Global Director of Insights & Innovation at Anheuser Busch-Inbev spoke about balancing short, mid, and long-term initiative in your innovation pipeline. Patrick sits in the marketing organization and serves the top 10 markets and focuses on filling the innovation pipeline using a decentralized, lean organization. Recently, they've been opening up more to their peers and people outside of their organization.

They've lost global share of thoat over the last 10 years (Diageo too), but they are gaining within alcoholic beverages at the expense of spirits. The Chinese are gaining a taste for beer and China is the biggest market (by consumption).

Anheuser Busch-InBev has a 'World Class Commercial Program' focused on creating a marketing excellence culture - focused on renovating & innovating.

It's not all about new products, but about staying contemporary with our customers:

• Look at innovation through the consumers' eyes


• Renovation could be a bottle or label change (same basic product)


• Renovation offers similar benefits


• Innovation offers similar benefits in a better way or additional benefits

"Never fall in love with the process"


They focus on clear goals and clear targets and their innovation culture is tied into their corporate culture. They have eight modules in their innovation process - four at the front-end and four at the back end, with four stage gates for the four stages at the end - with a fuzzy front end.:

• Define R&I Strategy & Brief


• Develop concept platforms


• Generate ideas


• Write & test concepts


• Prioritize


• Determine feasability


• Develop product


• Execute launch

They created an online innovation management system only about 18 months ago and it has had a huge impact on time to market.

Anheuser Busch-InBev focuses on Share of Throat (SOT) innovations (new skus), Share of Beer (SOB) renovations & innovations (new skus), and securing & improving competitiveness renovations & innovations (part of the core - existing skus). They distinguish between liquid and packaging innovations.

They do measure how much of their revenue comes from innovation (now that we've been going for a few years). They would like to work with their competitors to make sure that their category stays relevant.

In the Anheuser Busch-InBev model, different organizations have different time horizons:

• BU/Country = 0-18 months (competitiveness and SOB renewal)


• Zone + Global = 18-36 months (SOB & SOT renewal)


• Global - long-term = 36-60 months (consumer trends/growth opportunities)

One of the things that the central innovation group organizes, is InnoWeek - an innovation week workshop. They have to go and live it and work it with them including legal, CSR, and other roles. They have an Oceans Eleven type approach with functional experts that bring best practices to different countries.

They focus on satisfying the emotions of the customer, and do a lot of ethnography and observation and co-creation with pro-sumers. You have to keep in mind that the consumer sometimes says one thing but means and does another thing. They are also looking to partner with other companies (like Apple, P&G, Danone, Unilever, BMW, etc.) to share customer insights.

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Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.

Which is Heavier? - Car or Soft Drink Shipments?

by Stephen Shapiro

Last week I had a fantastic meeting with the CEO of a mid-sized energy company. We had a number of fascinating conversations ranging from Personality Poker, Open Innovation, and alternative energy.

In the meeting, I was drinking my "caffeine in a can" - a diet cola.

The CEO pointed at my soft drink and said that it was one of the worst energy hogs.

He pointed out that years ago, Coke was sold as syrup (in fact, it was originally sold for medicinal purposes). The carbonated water was added at the point of sale (e.g., the pharmacy or soda shop). Less energy was expended in the packaging process. Less material was used for the packaging itself. But more importantly, less energy was used in shipping.

After doing some digging, I found that, according to one website, 500ml of syrup makes the equivalent of 12 liters. That means that a can of cola contains <5% syrup and over 95% carbonated water. According to one study, nearly 300 billion liters of soft drinks are sold a year. Hoovers research shows that only 35% of that is from fountain sales.

Ok, so let's do some math.

A liter of soft drink weights approximately 1 kilogram. This means that a liter is over 2.1 pounds of water, and .1 pounds of syrup. At 65% bottle/cans (excluding the 35% fountain sales), this is over 400 billion pounds of carbonated water needlessly shipped with the syrup. Let's not forget the weight of the cans/bottles. To put this in context, this is the weight of 100 million cars. In 2007, 16 million cars, SUVs and trucks were sold in the US. Every car sold in the United States over the past 6 years weighs less than the weight of the excess water shipped EVERY year with bottled soft drinks.

Enough of the math. I could attempt to calculate the average distance the bottles travel and the amount of fuel required for transportation, but I just don't have the time. And I suspect you get the idea.

What do you do about it?

• Of course advocates are trying to reduce the amount of soft drinks we consume. But so far nothing points to that being a successful strategy.


• Encourage people to buy and use soda machines. There are several companies that provide this type of product. You buy the machine, the syrup and the gas cartridges.


• Another option might be to find a solution similar to Crystal Light "On-the Go." The challenge is adding carbonation to a powder. While eating Pop Rocks Candy the other day, I realized that there must be a way of addressing this.

Of course there are many more possible solutions. But the solution is not the point of this article.

Innovation is about asking better question. It is about surfacing the hidden assumptions. When looking at issues (environmental, business, or personal), sometimes you need to question everything...even the can of soda in your hand.

P.S. Soft drinks account for the largest percentage of the "liquid refreshment beverage" market. This article did not even include the oft-maligned bottled water industry, which is smaller in size. Do you want to know how far your bottled water traveled to go to you? Check out this article.

P.P.S. I am not suggesting we eliminate soft drinks. My consumption of diet cola - especially first thing in the morning - is one of my guilty pleasures!

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Stephen Shapiro is the author of three books, a popular innovation speaker, and is the Chief Innovation Evangelist for Innocentive, the leader in Open Innovation.

What are you doing to innovate for an obese America?

The Wall Street Journal reported this week on the huge price being paid in health-care spending due to America's rapidly expanding waistlines: $147B.

How are we as innovators leading companies to address this head on?

Lecturing, hectoring and "education" aren't changing what's on America's plate, or at least not quickly enough.

I recommend reading Hank Cardello's book "Stuffed: An Insider's Look at Who's Really Making America Fat." As a former exec at Coca-Cola and General Mills, he knows the institutional challenges of bringing Health & Wellness (H&W) innovation to market. He also has smart strategies for overcoming them.

Similarly at our firm, we refuse to give up on major Food & Beverage (F&B) category innovation that improves health.

We're especially excited by five H&W vectors we believe are poised to explode in F&B innovation. We advocate innovating with...

1. The Pleasure Principle - Healthier food that tastes better than not-so-healthy choices


2. Next-Wave Hybrids - Transferring ingredients from one F&B use to another to improve H&W outcomes


3. Ancient Natural Miracles - Going beyond green tea into previously obscure Asian fruits, cocoa and more


4. Process Leaps - Skipping incremental change to create a whole new thing, made a whole new way


5. Right For You = RFY - Appealing to needs for individuality, authenticity and community around food choices

Our 4-minute video "Beyond BFY: The New Spectrum in Heath & Wellness Innovation" outlines these vectors along with current and upcoming examples:





Eager to learn what you're exploring to grow your bottom line whilst shrinking America's bottoms!

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Joy Bergmann is Communications Director at innovation consultancy Fahrenheit 212 in New York.