Building from the outside in
Miles Eddowes, the director of open innovation at Kraft Foods, knows the value of collaboration and of looking beyond the company for good ideas
AT FIRST glance, Formula One and coffee machines do not appear to have much in common. But global food producer Kraft Foods identified a link and used the modelling technologies expertise of F1 engineers to improve the flow of water through its Tassimo coffee capsules.
This type of collaboration is not unusual for Kraft. The company has a long history of working with third parties to develop new products and its interdisciplinary approach is relished by the company’s director of open innovation, Miles Eddowes.
Open innovation means drawing on the ideas of thirdparties (from academics to interested consumers) to supplement in-house innovation activities.
Eddowes is an Oxford engineering graduate with a master’s degree in scientific instrumentation. “I started to get a real kick from working across the boundaries of different scientific disciplines whilst working for my PhD at the National Medical Laser Centre at University College London Hospital,” he says. “My most cited paper is on why you should never let a surgeon near your prostate with a laser.”
He subsequently joined Unipath, a high-tech spinout from Unilever, and was part of the team that developed the digital home-pregnancy test.
“It was there that I learnt the art of open innovation – stretching the ambition of the parent company by building strategic partnerships to do what neither company could do by themselves,” he says.
Eddowes describes himself as Kraft’s “global landing strip for bright ideas from the outside world”. He maintains the company’s innovation “needs list” and acts as the filter between what Kraft is looking for from the outside world and what the outside world has to offer.
Depending on the need, this means tapping into a worldwide community of academics, suppliers, innovation brokers and consumers to get whatever it takes to keep Kraft ahead of the game.
“We employ very talented people, but we know that we cannot develop all of our product and technology goals alone,” Eddowes says. “We try not to differentiate between conventional RD and open collaboration. It’s all part of a process aimed at ensuring speed to market and maintaining our competitive edge.”
Right now items on Kraft’s “needs list” include a method or technology to improve the flavour of robusta coffee, more environmentally friendly chewing gum formulations and non-dairy ingredients that taste like the real thing.
Kraft has more than 3,300 people (food scientists, chemists and engineers) working in the broad area of RD and Eddowes’ immediate network is a group of around 30 people based in the company’s 15 major RD centres in Asia, Europe, North and South America.
They in turn work with local teams of around 30 “change agents” apiece, and there is daily interaction between the groups.
Innovation at the company is set in the context of Kraft’s global business. For example, how could improvements to the company’s coffee-bean roasting process be applied to the roasting of cocoa beans for its chocolate-making operations?
Kraft is one of the world’s largest snacks/food producers with revenues of $54.4 billion in 2011. It owns household name brands such as Cadburys, Jacobs, Kraft and Philadelphia.
In 2011, the company spent more than $700 million on RD, up from $583 million in 2010. New products generated 10.5 per cent of revenue in 2011, up from 9.5 per cent in 2010 and 7.4 per cent in 2009.
Getting “buy in” for the innovation process is not a major issue at Kraft, Eddowes says, not least because the company’s chief executive, Irene Rosenfeld, is a 30-year veteran of the food and drinks business with a strong background in consumer research who recognises innovation when she sees it.
“She is very in tune with what makes a product successful and has set the company very ambitious targets in this respect,” Eddowes says. “The culture of a business is central to how well it handles innovation. How receptive is the business to others’ ideas and how willing is it to build on them?
“One of the problems in organisations can be resistance from those caught up in the ‘not invented here’ syndrome. We work on the assumption of a positive attitude towards innovation.
Once the need for a product or technology has been identified, it goes through a conventional stage gate process with the cost of bringing it to market a key factor.
Eddowes says Kraft “seeks to be the partner of choice in the innovation community” and recently launched a new open innovation website aimed at anyone interested in working with the company.
A typical way a collaboration would pay off for is through a licensing or supply agreement.
“Some of what we do is relatively invisible to consumers because it’s around productivity, or building a competency or it may be a twist on sustainability or packaging. It’s not all about new products.
“Innovation may also be to do with geography – introducing an existing product to a new market. For example, chewing gum to China or something even more target-audience specific. In the US, we have a new flavour concentrate to add to beverages and the target market for this is women on the go.
“Personally, I love seeing products getting to market. I get a huge kick out of going into a supermarket and seeing a product that I was involved with on the shelf.
“My job is really varied. One day I’m working on something to do with packaging; another, I’m talking with our researchers about how we alter our Belvita breakfast biscuits to change how they release energy.”