PepsiCo innovation chief on seaweed, insects & accessible nutrition: 'It’s through experimenting that you work out what consumers will buy'
“We have an ambition to grow our nutritious products faster than our core treat products and in last two years we have achieved that," said Karen Scott, senior director of innovation and incubation at PepsiCo, Western Europe. "If you look at the products in our portfolio that contain wholegrain, fruits, legumes, vegetables, dairy and waters – that range is outpacing the growth of the rest.”
According to the company, sales of PepsiCo's ‘better-for-you’ options have risen from 38% of sales in 2016 to nearly 50% this year, and recent years have seen it widen its portfolio with diverse products from kombucha to hummus.
In order to answer the million dollar question - what is a truly innovative nutritious ingredient and what is a short-term fad - PepsiCo spends a lot of time analysing the market, looking at the latest launches, ‘social listening’, Scott said.
“You need to understand the consumer reasons and lifestyle choices driving each trend. That gives you a much better indication of what is enduring, rather than ingredient fads. But until you’ve actually tried out these ingredients, you never really know which ones will work and which won’t. So it’s incredibly important to be in the game.”
"At the end of the day, it’s through experimenting that you work out what consumers are going to buy, and that determines where you take your brands and how you expand in the future."
Six weeks ago, for instance, PepsiCo's Off the Eaten Path brand launched a range of seaweed crisps in the UK.
But while seaweed is undoubtedly an 'on-trend' ingredient, most companies operating in that market are pure seaweed players, making nori sheets, for example. “It's not a massively accessible format,” said Scott.
The Off the Eaten Path snacks, made with rice, lentils and seaweed sourced from the Scottish Hebrides, incorporate the benefits of algae into a product format that consumers find accessible and easy to enjoy, Scott said.
Another way the food and beverage giant tries to keep its finger on the innovation pulse is through external collaborations.
Its in-house start-up accelerator programme Nutrition Greenhouse operates as an open competition whereby in PepsiCo choosing 10 start-up finalists, giving an initial grant of €20,000, assigning a senior mentor and working with them for six months.
During this time, it helps the start-ups address critical areas to their growth, from sourcing and supply to branding and communication or access to market.
Working with the start-ups allows PepsiCo to collaborate, experiment and explore new areas while keeping an eye out for any “potential partners in the long-term”.
“It’s another outlet for us to continue that experimenting. As we work with the entrepreneurs on the programme, we are learning, and observing their learning, of how consumers react to goji berries, soy-free, vegan or whatever it may be."
From personalised nutrition to insect protein
Nestlé has launched a DNA testing platform in Japan, called Nestlé Wellness Ambassador which sends users – there are currently around 90,000 of them - a home testing kit to analyse their blood and DNA. They then receive personalised dietary advice.
PepsiCo is “certainly aware of the trend” and is looking into the different players in the space, Scott said.
“People are taking control of everything in their lives including nutrition. [This is] definitely one trend that will pervade. At the minute, however, we are watching how it develops and I don’t think we’ll make a move until we are clearer on the science behind it.
“Personalisation is easy to understand , the challenge is how to harness the science to create products that actually deliver, and is it helpful and is it real? We need to be sure of science before we get involved in delivering products in a different way.”
Insect protein is another ingredient the company is keeping an eye on.
Two years ago it selected Jimini’s, a French snack company that uses cricket and mealworm protein, to take part in the Greenhouse accelerator. This year’s finalists include Gryö, another insect energy bar manufacturer.
“Protein as a category is a huge trend,” said Scott. “We need to feed growing population and the challenge is finding ways to do that sustainably […] but it’s a bit too early to conclude if insects will be in our long-term plan. It’s certainly an incredibly sustainable area but the challenge is from a consumer point of view,” she said. “Eating insects is a polarising thought.
“So is it something we are actively launching and betting on right now? No, but the whole space of alternative proteins is very important and we will continue to experiment and watch it closely.”
Accessible, affordable nutrition
Although the manufacturer says its long-term aim is ‘more nutritious food for more people’, its core brands remain sugary sodas and snack products that are high in salt and fat, and Scott admitted the new ‘alternative nutrition’ products, such as Off the Eaten Path seaweed crisps, have a higher price tag than the core portfolio as they are launched at small scale.
“We have a wide range of choices but ultimately are a large company so it’s through our scale and growing our healthy brands like Quaker and Naked that we can ensure nutritious products are accessible."