On March 1st, we hosted a panel talk at Millennial 20/20 in New York City – the worldwide event with both eyes firmly on the future of commerce. Our own Andrew Piper was joined on stage by Zach Swiss, Director of Strategy at Heineken and Francesco Tortora, Brand Director for Gillette, with the talk adeptly chaired by James Hirst, one of Rare’s directors. The topic? What brands will look, feel and be like in 50 years’ time, and what they need to do today to exist tomorrow.
The following is an edited transcript of our discussion.
James Hirst (Rare): Zach, let’s come to you first. Could you tell us a bit about what Heineken are doing when it comes to future proofing the brand?
Zach Swiss (Heineken): Sure. So alcohol, beer, wine and spirits have been around for decades, if not centuries, so as an overall category there is not that much difference now to what was in place decades or centuries earlier. When we look within the category though, that’s when we’re seeing an explosion of choice and a pretty rapid proliferation of different brands and styles, and so many options that a consumer, retailer and distributor have to choose from.
On the one hand, it’s great. It’s exciting. There are so many options you can go with. On the other hand, I think the danger is that we are very rapidly approaching a point where we might hit saturation, and the amount of space on the shelf in any given grocery store, convenience store or liquor store is not necessarily growing to accommodate all of these new options.
At the end of the day, we reach a point where, yes, there is all this opportunity out there, there are all of these options, but some of them may fall away if they can’t generate enough rate of sale or velocity to justify their space on the shelf. If and when that happens, we think that a strong, long lasting, time-tested brand like Heineken or Dos Equis or Tecate could be where consumers, retailers and distributors go.
I know we talk about today as a ‘post-trust’ era, but I think those brands do have trust and, when you drink them, you know what you are getting: there is an inherent message of quality that you can get that you don’t necessarily get with something that’s brand new.
James: Francesco, how about from a Gillette perspective?
Francesco Tortora (Gillette): Well, it’s somewhat similar. I like to think we [Gillette] are both 50 years young and 50 years old. We’re actually 110 years old and another 250 years young. I think the point is that there is a reason why a brand has been around for such a long period of time, and most of the time it’s because they are very special in what they do. They put a lot of passion – we call it possession – in whatever they do. You have to stay true to that.
The reality is they have to be meaningful and relevant in these times, and intercept whatever change is going on. The world is changing, there are a lot of disruptions, there are a lot of strange events. In our history, we’ve had two wars, we’ve had revolutions. There has been the rise in communism, the fall of communism, the rise of China. Our whole lifetimes have been full of change.
The point is, a brand needs to stay true to its home roots, and be very clear about why it’s there and the service it offers to the people it sells products to. You have to just keep your antenna out, stay true to that and you will never get old!
Specifically, we believe that these personal care moments have always been the reason why Mr Kinsey Gillette decided to invent this disposable razor, because he thought that guys should only have to go to the barber only once a week and they should have a solution to do it cheaper.
He wanted to offer better personal care for more people. It was revolutionary then, and continues to be an important element of why we do what we do now. Those two, three, four, five minutes in front of the mirror when you shave are important for a guy to get ready.That’s why we put so much passion in making sure that experience is so special.
James:Thank you. Again, to both of you, is there anything in particular you can share about you as a business, what you are doing to counteract some of the points you’ve just touched on?
Zach: From our perspective, it’s two-fold because I think again, going back to the theme of this – 50 years young, 50 years old – you want to be both, simultaneously. So we don’t just want to be the company that is up there talking about the beer that your father or grandfather drank, because that is not necessarily exciting to millennials but, on the other hand, there is something special about having that heritage and that tradition and that quality.
The question is, how do we take that message and translate it to a new generation of drinkers? I’ll talk about our flagship brand, Heineken. We have a whole credentials campaign fronted by [Hollywood actor] Benicio Del Toro where he takes some of the surprising facts about Heineken’s heritage and history and presents them in an interesting way to today’s consumer.
Heineken, as big as it is around the world, is still family-owned. That’s something we take very seriously. It’s a part of our culture. We have people here at Heineken who have been here for 15-20 years. That’s a message that a lot of drinkers out there do not necessarily know, so that’s a message that we try and promote.
Heineken is a global brand. If you go to any country around the world, you are going to find it, and it’s going to be made from the same three ingredients in any of those countries that you would get here. That degree of consistency and quality, especially when we think about today’s millennials constantly travelling, having that source of comfort really, knowing that if you go somewhere you can find this product that you know and like, that is a message that we think resonates.
So that’s for a brand like Heineken that has that rich heritage. On the other hand, we are also very cognisant that we don’t want to just bury our heads in the sand and ignore some of the other trends that are disrupting the industry now too.
So for us, obviously, craft is a big one that’s been going on for several years. We do see growth starting to slow a bit, but we have entered into a joint venture with Lagunitas, which is one of the strongest craft brands out there. We are very excited about it. Tony Magee founded that and has done a fantastic job fostering those brands, so it’s something that we are looking to build on.
Another exciting segment of the market is cider, which globally is a big segment; I’d say about ten percent in certain markets around the world. Here, in the US, it’s very small. People try it in pockets. It’s more on the flavoured beverages side but we have Strongbow Cider and we see that as one of the bets that we’re making now as a company for 10, 15, 25 years in the future as this continues to grow as a segment. I think it’s striking that balance between appreciating our history and our heritage, while at the same time being cognisant of other trends and taking advantage where we can.
Francesco: I guess the most important thing is that we stay relevant and look forward. There is the element of innovation, of course. But the reality is that innovation has to be seen through slightly different lenses: there is innovation in the way you would market, giving a better product, but it’s also giving a benefit to more people.
One of our biggest innovations was a very simple product that we launched in India that actually got thirty million users in the first year. The beauty of it is that it’s accessible and more men can actually buy it. That to me is innovation.
And there are other ventures we are investigating into innovating for the underserved consumers. We’re asking what it’s like to shave when you have to shave somebody else instead of shave yourself. What is it like to shave when you don’t have water, or access to water?
There are ways we think it is important to innovate that are more meaningful to more people. Yes, five blades are better than three blades, believe me, but it is important that if you don’t have access to running water, we as a brand create that solution. That is innovation that is actually meaningful, purposeful, and I think it’s the one that a lot of the new generations are really looking forward to and embracing.
James: Thank you. Andrew, taking Francesco’s point about meaningful innovation, obviously we talk a lot to our clients about innovating for the future. What do you think is the key here when it comes to looking ahead in 50 years’ time?
Andrew Piper (Rare): Well, I’m not sure about 50 years’ time, but in terms of our response to some of the challenges that clients Gillette and Heineken have, and some of the clients we work for, such as Kellogg or Heinz, present, we talk a lot about how we deploy what we call hard power: the brand’s hard power, versus its soft power.
Hard power is, if you like, high investment, high return. So that would be product development, supply chain, business model. It’s about balancing that with soft power – brand design, social media, tone of voice – obviously, relatively low cost but still with the potential for high returns. As an agency we are looking at the balance between these two powers, if you like, and how we can present solutions and respond to address both of these channels.
Very often, we are more excited by the smaller low cost, high return soft power projects: how can tone of voice impact on consumer perception? How can key imagery impact? What can Instagram do? This is a conversation that has been going on all day, to adjust and develop a consumer perception. This is all very low cost and it’s very quick and can be hugely effective.
James: Just staying on that subject, is there anything you think that we, as a consultancy and agency, offer in this area?
Andrew: There are two main things. One is the bravery to show disruptive solutions, even when both of the brands that we’re talking about here are loaded with heritage weighed down with brand guidelines and all sorts of stuff around it.
It’s still our job to go and say, “Hang on a minute. What about this? This is interesting. We think people might find it interesting. What do you think?” A lot of agencies on record are not necessarily prone to that kind of behaviour, and are pretty risk averse. We set ourselves up to be very pro-risk when it comes to these kind of conversations.
The second idea is the fact that we’re an agency in a new era. We heard a little earlier Orchid Bertelsen from Nestlé talking about the need for agencies to respond very quickly, to be able to be flexible and agile, to see the commercial objectives through the same lens as the client sees them, as opposed to through the creative perfection lens that we might be tempted to look through, and to be sharing and collaborating and co-creating even with partner agencies in the mix. This is not a closed shop anymore. I think we’ve moved on and we need to be on the same page as our clients and on the same page as other agencies in the mix.
James: Andrew spoke there about risk, but what characteristics do you think you need to grow tomorrow as brands?
Zach: Characteristics we need to have to grow, that’s an interesting question. I think there is a fine balance. I go back to what I was saying before about heritage and tradition and talking about the history of a brand.
I talked about Heineken, which is one of our brands, but we could look at one of our competitors that’s doing well, which is Stella. Stella is a Belgian brand that has a heritage similar to Heineken’s. If you look at some of the marketing they’ve done, they have actually managed to take an idea about sophistication, and they also talk about their founding.
They are taking this old time idea and they are relating it, I would say, to consumers in a way that is still relevant today. That is they are, credit to them, actually doing a good job of striking that balance. I think we’re doing a good job on Heineken with that as well. It is about making sure that you are mindful of the history and the attributes that your brand has without getting bogged down in nostalgia and forgetting to communicate that to consumers.
So you want to be mindful of trends; you want to be mindful of innovating. But you don’t want to throw the baby out with the bath water either and forget about what a major brand it was to begin with.
Francesco: I think it’s a matter of being… we heard today this theme of transparency, of authenticity. You are who you are and you can say whatever you want, but it’s what you do that will actually show to everyone what you’re made of.
It’s the great things you’ve done – not talked about but actually done – that actually can help anchor you in what you’ve been doing. The narrative, though, has to be very mindfully rooted in something that is timeless. If it is rooted in a human insight, it tends to go on for generations. Guys take care of themselves today in a different way than they did one hundred years ago, but they are taking care of themselves.
Guys believe that when you take care of yourself, you are actually ready to challenge whatever you want to challenge, and I think that is a human insight and it’s something that is true now, it was true one hundred years ago and it will be true always. Our unique role [as a brand] is in having been a company that has done it for such a period of time in a successful way. We have to stay true to that insight, really serve that human need, and then always look at innovation in a very lateral way. It’s not just product. It is the way you talk to people, the way you interact, the passions and interests and making sure you stay relevant, but that human side won’t necessarily change over time.
Andrew: At the end of the day, we are challenged as an agency to not just tip toe around the edges but to get into the meaning of a brand. Our job isn’t simply to gloss up or colour in, but actually to bring to life those sentiments that Heineken and Gillette are expressing, that all of our clients express. There is more to this than simply a superficial layer of execution of excellence. At the end of the day, if we don’t understand that principle, that purpose, it’s not going to show up, no matter how beautiful things look. That’s our job, to get below the skin of a brand just as well as our clients themselves are.
James: Any questions from the audience?
Audience: My question is for Francesco. How are you guys keeping up with brands such as the Dollar Shave Club? And since you guys are well established, you have a lot of razors on the market, how do you deal with oversaturation?
Francesco: Okay, so I was waiting for the question about the Dollar Shave Club. The fun thing about that is that actually we always say competition exists, okay. Now, funnily enough, we were in the subscription business a couple of years before the Dollar Shave Club; we were doing it with Amazon. It was one of our disruptive tests, trying to see if it worked and, of course, since we weren’t driving it directly there were some hiccups. Then they [Dollar Shave Club] came out and they showed the world the possibilities when you actually put a lot of focus.
There is a marked difference between us and them in the sense that we not only make our razors, we make the machines that make our razors, we make everything. We don’t distribute and we don’t sell the product directly to consumers, but we do manufacture, as opposed to just distributing something that comes from overseas.
To ask this is extremely important – I was talking before about the importance of innovation when you really know your consumers, all of them, and we happen to have around 700 to 800 million consumers around the world. We sell razors for probably less than ten cents a razor, all the way up to things that cost five dollars.
The reason is that a lot of people are less or more involved in their shaving. They are less or more prone to pain management or just have smaller pockets and so the real razors we focus on are any razors that says Gillette on it. It’s the cheapest disposable razor to the most expensive. All of that carries the same promise, as in that you have quality products with which you can take care of yourself.
James: Thank you, Francesco. Zach, just on the prescription-based business model, I read recently about how you can get wines and craft beers to order. In your world, how much do you see this impacting?
Zach: It’s definitely something that we’re aware of. I would say beer and alcohol in general is different from a lot of other consumer products in that there is so much related to the legal concerns you have to go through. As a legacy of prohibition, we have a tremendous patchwork of different laws in this country around how beer can be sold.
Basically, everywhere, it has to go through distributors, but each State has its own little intricacies and idiosyncrasies in terms of what can be sold where and when. Having e-commerce as a potential channel, obviously, it’s something that has been impacting the world for a while, but it hasn’t quite made its way in the US into alcohol sales yet.
Part of it is also verifying that whoever is making and receiving the purchase is the one consuming it, that they are of age. That is another huge barrier that has to be overcome. I think it’s an exciting opportunity in something that, as a company, we are looking at a lot. I think we’ve been talking to a couple of different potential partners and we hear more and more from distributors and retailers that it’s a channel that they would like to get into, but I think we are still in the infancy of figuring out what that looks like going forward, given some of those complexities.
James: Thank you. Any other questions from the audience?
Audience: A question for all you guys whose businesses are well over 50 years old. At what point did you start saying you’re 50 years young rather than old? How has that transition happened?
Francesco: The moment you think you have to make a transition, you’re in deep brown material. What I mean by that is that you should always look at your consumer base and look at being relevant any time. So you always have to be one, two, three, 20, 40, 50, 70 years young. Then, at a certain point in time, you look back and you can think about how old you’ve been and look at what that meant. But if you don’t always keep your mind relevant today with the people that advise you, some of whom are 80 years old and some of whom are 50 years old in our case, it is important that you’re always relevant there.
The moment you start saying, “Actually, there is there is this new generation,” you’re probably screwed. This is very important, especially for young start-ups. We consider ourselves a 100-year-old start-up. There was a guy at Gillette who had an idea. He started to do that and then he said, “I’m going to keep on doing it and I’ll stop doing it when I don’t feel any better.”
We keep on thinking about that. There’s something outside there that we haven’t thought of, and we have spent a tonne of time and a tonne of resources in looking for what’s next. And, again, the difference is that whilst maybe in the past we focused only on the product, we now look at what’s next. What is our input? How can we intercept? We think about things that even mean a little bit more than personal care.
Zach: I go back to what you said before as well about how a great product is a great product and a great idea is a great idea. So to tie back to something I said earlier, with brands like Heineken we take pride in the tag that this is a brand that your father or your grandfather could drink and enjoy and now you can enjoy it too. Personally, I think we as a company take great pride in hearing about people of different ages who have that loyalty to our different peers and love the product and enjoy it, and then thinking about how you communicate that out, some of the marketing campaigns and the advertising ideas we had.
I talked a lot about Heineken but Dos Equis is another great example. We have had ‘the most interesting man in the world’ for a while. That’s an idea that, when it first came out, drew a lot of scepticism from many of the distributors that we first pitched it to because the idea was it’s an older man who is talking about… he’s drinking beer, how is this going to play as a concept if you are trying to sell beer to the young consumers?
It ended up becoming one of the most iconic campaigns of the past however many decades, and it is still going strong. We reviewed it to make sure it was staying fresh and relevant to a new generation, but I don’t know that there is necessarily that composite moment where we sat and thought, ‘are we 50 years old or are we 50 years young?’ I think it goes back to what Francesco was saying before about how if you have a product that connects with consumers and is meaningful to them, if you have an idea that works and gets people excited, that’s going to resonate regardless.
James: Thank you. I think we’ve got about one minute left, so Andrew, anything you want to add to that?
Andrew: As a business, we’ve got a few years to go before our 50th birthday. As an individual, on the other hand, I am well aware of what that feels like and as a creative director, as a founder, as a director of a business that is talking to brands about these challenges it is a personal responsibility to keep looking forward, not to be considering how it used to be, not to think about agency models from my own experience which were very comfortable in their own ways, but actually are well past their sell by date, to be exploring the sort of people we want to work with, the sort of business we want to be and the sort of attitudes we want to have as a business that are going to respond to these challenges dynamically in a fashion that is going to solve the commercial challenges of the current and the coming eras, so that’s my sermon.
James: Francesco, Zach, Andrew, thank you. I think that’s time for us.