In the course of talking with PepsiCo Foodservice Global CMO Scott Finlow, the word “empathy” came up more often than one expects in marketing conversations. But this B2B side of the Pepsi business serves the very sectors that the COVID-19 economic fallout hit hardest — dining, lodging, events, retail.
The best response for Pepsi was just to check in. How is everyone in the supply and customer chain doing? Using everything from relentless Zoom meetings to market research, Finlow and his team worked on the best ways one of the world’s largest CPGs could offer genuine help, not just lip service.
As we discuss here, both the COVID-19 crisis followed by an increased focus on social inequality require that all major consumer brands rethink their relationships with their customers' lives and values.
And Finlow will be the opening keynote speaker at MediaPost’s CPG Brand Insider Summit Aug. 18-19.
MediaPost: Pre-COVID, under standard operating conditions, what is the media mix for the foodservice side in terms of who you are marketing to and what channels you use generally?
Finlow: With beverage brands, we start with what their objectives are and, because foodservice is a diverse set of contexts, we're working to develop plans in that context. What we do at a stadium is different from what we do at a college, which is different from what we do at one of our restaurant partners like Taco Bell.
Foodservice represents, in many cases, an incredibly relevant moment to connect our brands to people at a time when they're celebrating or enjoying something with their friends in a social moment.
MP: Does that mean that the majority of your work is often co-marketing agreements and projects that are happening more onsite than in, say, media buys?
Finlow: It's a combination. A big component is what we're doing from a portfolio and an innovation point of view. An example would be Mountain Dew Baja Blast with Taco Bell. That's a foodservice innovation we've developed with Taco Bell. It's an intrinsic part of the Taco Bell experience for a lot of guests.
MP: Walk us through the timeline back in March as you were seeing COVID-19 happen elsewhere, before it even got to the U.S. Where did you start seeing it and how did you respond?
Finlow: We had the benefit of learning from our team in China. That was helpful for us in terms of giving us a fast start in foodservice, to understand the importance of being responsive, acting quickly and being transparent. We listened to our customers and our employees. What that showed was real empathy, starting with our own team, making sure that everyone was okay, safe, that their mental health was okay.
We spent a lot of time with our customers and the challenges they were facing, and that continues. We've done a lot of research to make sure we're understanding consumer action but, equally, how consumers are feeling.
MP: About transparency -- what did it look like in this context?
Finlow: From Ramon [Laguarta], our CEO, on down, we've been clear about our position as a company in terms of looking after the safety of our employees, investing and supporting our frontline employees who were in and out of stores and in a high-risk environment. We've been transparent in terms of our communication about our plans, what changes we are making, understanding how our employees are feeling. We've worked hard to maintain that connection.
MP: How did you actually execute that transparency across such an enormous organization?
Finlow: Ramon was communicating on a weekly basis. There were a series of Zoom town halls. Three times a week, I had my full team on Zoom, sharing relevant updates and tapping into organizational listening, asking my leadership team to do the same. Making sure that we were connected and understanding how they were feeling, how they were doing. One of the benefits of Zoom is you can read people, versus on a telephone. You can see them, you can, in many cases, see how they're feeling.
MP: You mentioned you were also trying to be responsive to consumers and you were trying to read the data or read how they were feeling. What were some of the key insights you got about consumers early on that you felt you responded to well?
Finlow: We mapped out a series of phases that we believed the consumer and our operators were going to go through, from cocooning to restricted recovery to full recovery.
MP: Did people follow that map, or were there surprises along the way?
Finlow: It hasn't played out perfectly in terms of a linear progress nor some of the timelines we mapped out. We operated as a more agile marketing organization in foodservice over the last four months than we had done for any period prior to that. There are things we did that, historically, would have taken three months to develop that we did in three days. There are trade-offs, but we've proven that some things are possible that we didn't think were.
MP: Let's drill into a few examples of the ways you rapidly responded to circumstances.
Finlow: We worked with the National Restaurant Association and Guy Fieri to stand up the Restaurant Employee Relief Fund, and over the course of about a week we committed as the first big corporate supporter of that initiative. And then we worked with Guy to amplify that program and over the course of the program helped raise $23 million to support those workers.
There were a couple of magic moments like the "Some Good News" [SGN] work we did with John Krasinski that raised an additional $3 million that we committed in that moment. It helped drive investment in that. The SGN moment came to us on Friday afternoon and that happened on Sunday, so in all, 48 hours.
MP: You also had your restaurant clientele moving themselves radically to a delivery structure. What adjustments did you have to make and what help could you be to that sector?
Finlow: For those who already had those systems in place, we did a couple of things. We were early partners in the Great American Takeout, which was an initiative to drive delivery. We helped by building awareness and driving the frequency of delivery on Tuesdays.
We did the "Drinks On Us" program in partnership with our One World event that brand Pepsi supported, that big online concert. We ended up doing that not just in the U.S. but scaling that across 24 countries, impacting 50 or 60 million people who engaged with that over the course of two weeks.
MP: What does success look like for some of these programs? Are you trying to come up with metrics of success that helped you replicate these programs or use them in different forms later?
Finlow: There is an expanded set of metrics in play right now. I wouldn't have thought I was coming into 2020 with a metric about raising $20 million for impacted restaurant workers. There's a relationship metric in terms of the way we've brought insights and partnership and support on a number of fronts to our customers to help them navigate and survive. But to your point, there are some of the more traditional brand metrics.
We're looking at levels of beverage incidents in delivery, which was the metric we had going into 2020 and it's still a metric that we're conscious of and trying to impact in our programs. We do want to connect our brands to delivery and make sure the consumer has the right beverage to pair with that meal.
MP: You've mentioned the word empathy several times, which is not something that marketers talk about generally. Does this change our relationship with our consumers? With our partners? Can we start thinking about empathy as just one of the variables a marketer has to keep in mind?
Finlow: Marketing is about understanding people and the needs that they have and providing a proposition or solution or product to meet that need. I'm intentionally calling them people and not consumers or shoppers because I think people is how we need to understand individuals in a fully rounded way.
It's not a new thing. It's never been more important than now or never been more dynamic than now as we live through unprecedented change in the world we're not just working in but the world we're living in.
The pace of change and the degree of change is incredible. And it means as a marketer, you have to be trying to understand what is really at play. I intentionally use what are the actions and what are the feelings, because I need to understand both. That's going to be more top of mind.
MP: What do you think permanently changes in a marketer's perspective from this?
Finlow: What we can control is our own behavior and the way we respond. Empathy, obviously, is one of those in terms of being hyper-tuned in to people. The second is speed of action and responsiveness or agility. Especially in a big multinational organization like PepsiCo, making sure that processes and structures don't get in the way, to allow us to respond to that insider understanding.
MP: Does that mean being less fearful? For a major brand like Pepsi and for all big brands, part of that bureaucracy and that lag had to do with people being careful about the brand.
Finlow: It's important to have courage, to be brave, to take a position. Companies and brands increasingly need to have a purpose and then act behind that purpose. It's going to be something that we take forward. As a company, PepsiCo increasingly does that. I'm proud of the company and the way we've defined our own purpose and the way a lot of our brands have defined purpose. Our company and our brands have stepped forward in the current unrest moment around racial equality.
MP: It seems like a natural extension of everything you're talking about: How does a brand respond in this moment?
Finlow: In many ways there's an evolution in terms of supporting, being empathetic, understanding and taking a stand and making a commitment to help. In this instance, it's a different kind of help. We have to recognize that this is centuries of structural injustice, racism and inequality. That's not a typical problem that we as a food and beverage company are equipped to solve. So we've got a lot to learn.
We've got to make sure we're tapping into different voices and really understanding the situation to a much higher degree, and you've seen our commitment. We've made a $400 million sustained commitment at PepsiCo in support of that. I'm really excited about the commitment we've made to support Black-owned local businesses with a focus on restaurants. I'm really committed and excited about the value that we can bring, the help that we can provide in that regard.