How Kellogg Became an Effective Digitally-Enabled Organization

By John Karolefski


It’s often challenging for a large CPG company to become a digitally-enabled organization. But the Kellogg Company has found the formula to transform itself effectively. The $13 billion producer of breakfast cereal and convenience foods has successfully changed its structure to better execute digital initiatives.

“We’re getting it right at Kellogg,” Julie Bowerman, the company’s Chief Global Digital Consumer & Customer Experience Officer, said in a presentation at the well-attended  GroceryShop conference and trade show recently in Las Vegas.
 
Bowerman joined Kellogg to build and lead the transformation of its online ecommerce business and brand digital experiences. The steps taken amount to a textbook case of an approach that has worked well.

Why is it so hard for a CPG company to become a digitally enabled organization?

“If you have a 100-year-old company with process and culture, it’s really hard to change,” she explained. “There are a lot of short-term pressures on the organization. You also have The Street constantly asking the CEO about digital native brands. When you are in a low-growth category, it’s hard to find that scale to justify an investment. Also, companies just don’t hire digitally capable talent.”
 
She said smaller digitally native brands have the right talent. They move quickly and innovate. They operate at a different end of the spectrum than large CPG organizations.
 
“I came to Kellogg,” she said, “because I wanted to be one of the leaders who brought this together with a hybrid approach and make a change in a big company.”
 
Bowerman assembled a digital team “to reflect what is happening in the marketplace.” Staffed with blended talent, the team has a three-pronged focus: Consumer, Shopper Marketing, and Customer. Everything is integrated.

“The other thing that we’re getting right at Kellogg,” she said, “is that we don’t think about this as just sales and marketing. We tell the organization that the beauty of ecommerce is that it’s a platform to build brands. Most importantly, we’ve established metrics for our business.” They include:

  • Are we driving growth in the category?
  • Are our brands healthy online?
  • Are we growing the channel in a particular market?

“P&L and measurement routines are integrated into the company,” she said. “Culturally, this is how we build our ecommerce team.”

Bowerman listed several other ways Kellogg is getting it right:

  • Scrappy leaders: “I love scrappy leaders. I want people who are going to break down walls and barriers. They’re not worried about what they can’t do. They only think about what they can do. They don’t need to ask questions. They just figure it out.”
  • Cross-functional partnerships: “They feel a partnership and they build credibility and trust with the rest of the organization.”
  • Stewardship at all levels: “We’re constantly telling people the why and the benefit. Every part of the organization has to understand it.”   
  • Passionate about our agenda: “We’re super passionate. We came here to make a difference. That passion is what drives you. It’s part of our team culture.”

She gave evidence that her approach is working. Kellogg has won digital marketing awards from industry organizations and customers. It is ranked number one in online Search for Cereal and Chips/Crisps. Sales are growing in all key markets. For example, in the first quarter of 2019: +24% in the UK, +37% in the US, and +145% in Canada.
   
In the past, “we would only invest in ecommerce based on the scale. You have to invest ahead of scale to win,” she said.  
In a Q&A session after her presentation, Bowerman was asked what kind of people she looks to add to her team.

“I always look for people who act like the consumer we want to attract,” she said. 

DIGITAL SOLUTIONS
                                                                        Early October 2019
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