Standing Out in a Sea of SKUs: Nestlé Purina’s Strategy for Inflation-Era Innovation
Editor's note: This article is an automated speech-to-text transcription, edited lightly for clarity.
When economic uncertainty comes knocking, innovation doesn’t need to take a back seat. This Quirk’s Virtual Sessions – DIY Research series session sponsored by EyeSee looks into how brands can innovate during times of inflation.
Alexandre de Jubécourt, senior client service director EU and global account lead for EyeSee and Maud Hua-Bulteau, consumer insights lead for Nestlé Purina Petcare in Europe teamed up to share the tactics and insights used to decide which products should be focused on. The two speakers provided real world examples and insights found on the dog and cat food products the two organizations researched.
Session transcript
Joe Rydholm
Hi everybody and welcome to our session, “Standing Out in a Sea of SKUs: Nestlé Purina’s Strategy for Inflation-Era Innovation.”
I’m Quirk’s Editor, Joe Rydholm and before we get started let’s quickly go over the ways you can participate in today’s discussion. You can use the chat tab to interact with other attendees during the session. There won’t be a live Q&A portion, but you can use the Q&A tab to submit questions for the presenters, and they will be answered later via e-mail.
Our session is presented by EyeSee. Enjoy the presentation!
Alexandre de Jubécourt
Hello everyone and thank you for joining us. My name is Alexandre de Jubécourt and today we'll be discussing the topic of innovation and how, when it is done right, it can be an inflation proof strategy.
However, before we dive in, I'd like to give a quick shout out to Quirk’s for hosting this event. Also, if any of you have questions along the way, feel free to drop them in the chat and our organizers will collect them and we'll be sure to address them during the follow-up.
Once again, my name is Alex, and I am the senior client director for Europe at EyeSee. I have spent around 18 years in market research working across the entire industry from insight to management and sales in multiple markets.
It's my pleasure to introduce today's co-host Maud, consumer Insight lead for Nestlé Purina Pet Care in Europe. Maud, could you please share a bit about yourself?
Maud Hua-Bulteau
Sure. Hi, Alex. Hi, everyone.
I'm Maud and the difficult to pronounce name is Hua-Bulteau. I've been working for Nestle Purina for the past 10 years at European level, so working with the complexity of multi-market research and I have international experience as well.
Happy to be with you today.
Alexandre de Jubécourt
Thank you for being here, Maud.
Today we are diving into the complexity of innovation, but as if that's not challenging enough, we're adding another layer to the mix, which is inflation. It's essentially like adding extra pressure on top of the inherent risk that innovation already carries. That said, innovation and premiumization can also serve as inflation proof strategies, even if that's not the original intent.
We'll explore all of that shortly. But first Maud, I have to ask about all these global shifts impacting consumers in the pet care category.
Maud Hua-Bulteau
Inflation has significantly influenced consumer behavior but not uniformly. While many pet owners feel the pressure of rising living costs, others remain relatively unaffected. This divide shapes how people shop and what they prioritize for their pets.
For those affected by cost-of-living challenges, financial pressure leads to more intentional decision making. These owners often seek better value for money, but also they trade down to more affordable brands, choose private label products, get creative with homemade meals or even repurpose leftovers for their pets.
At the same time, a large group of pet owners continue to indulge their furry companions with premium high-quality products. For them spending on a pet remains a joyful guilt-free act of love. Interestingly, even when money is tight, pet related expenses are not always the first to go. Many owners view pet care as essential, not optional. Emotional connections often trump pet cuts, especially in the early stages of financial strain.
Alexandre de Jubécourt
That's really interesting because one might assume that during inflation people would focus on cutting costs and immediately eliminating anything non-essential. But what we're seeing isn't just a classic lipstick effect, a phenomenon where consumers continue to spend on small indulgences like cosmetics or trades during economic downturns and indulge pets with small treats. We also have an entire generation that often treat their pets even better than themselves. For many, pets are considered essential to their own wellbeing. So naturally it's not easy to cut back on something you feel so deeply devoted to.
Maud Hua-Bulteau
I agree. That's why, in the context of inflation, innovation must meet heightened value expectations.
Pet owners are willing to pay if the product clearly delivers on its promise. Fancy packaging or trendy claims are not enough. Usefulness and quality must be obvious and justifiable.
We can never forget those that simply have to cut costs. So, a successful strategy recognizes these dual needs and it builds an inclusive portfolio that respects both value focused options for budget conscious shoppers and for those who will stay with premium offerings, believing their value is worth the cost.
Alexandre de Jubécourt
It's clear that inflation doesn't impact every category in the same way. It can even vary within a single category depending on the role of each product in the portfolio and the value consumers expect from them.
So, when it comes to the pet care category, what does that look like? What strategy should brands focus on?
Maud Hua-Bulteau
I'm glad you've mentioned the category perspective. Innovation remains crucial, but it must be approached with context in mind.
Category dynamics matter. Innovation should never exist in isolation. It needs to align with the broader category strategy and hit the sweet spot that drives overall category value. While innovation should elevate the category, it mustn't compete with or cannibalize your existing offerings.
This is especially important during times of inflation when it's critical to meet the diverse needs of all consumers, from value seekers to premium buyers.
Alexandre de Jubécourt
And the first thing that comes to mind when we talk about this topic, perhaps the most obvious, is premiumization.
What I find particularly interesting is that premiumization often starts as a way for innovative brands to add value and make their products truly irresistible even before inflation sets in.
In many cases, it turns out to be a smart long-term move. Proving to be inflation resistant when executed well.
So, maybe we can dive into the perfect example of that.
Maud Hua-Bulteau
Indeed. In this case, innovation was created to deliver the ultimate pleasure experience for cats at meal times, but its impact was beyond indulgence.
When done right, it becomes an innovation worth paying more for even during times of inflation. This has not only sustained consumer interest but also continues to drive category value.
With the right research and a well-crafted proposition, innovation can build resilience, helping brands remain strong and relevant even in challenging economic conditions.
[Video plays of an ad for Nestlé Purina Gourmet Revelations cat food with soft music in the background. The video runs from 7:18-7:44]
Alexandre de Jubécourt
I am not really a cat person, but this really looks delicious.
Maud Hua-Bulteau
It's meant for your cat, not for you.
Alexandre de Jubécourt
In theory, innovation seems like the logical first step, something we're all rooting for. But, when it comes to actually executing it, things become more complex with every step.
That's why it's essential to have clear criteria and objectives guiding every innovation process.
So, Maud, how do you decide which innovations are worth investing in, in the first place?
Maud Hua-Bulteau
Yes, it's essential to understand which products are truly worth innovating and which innovations make the most sense for the category as a whole. That's why we rely on research.
Here is an example of one. In this case, the key question is whether Purina ONE or Friskies would bring more value to the category specifically by attracting users from competitors or private labels. Understanding which brand has the potential to drive genuine category growth is essential for making strategic consumer-driven decisions.
Also, it's important to avoid cannibalization or simply missing one of the two types of consumers, value seekers or premium buyers, during times of inflation.
Alexandre de Jubécourt
Speaking of in-context testing, here is how we did it.
We exposed 900 respondents to a four-stage process.
First, they were shown virtual shelves without the new packaging. This was followed by a distraction game to reset their focus.
In the next stage, respondents were exposed to a promotional leaflet introducing the new products.
Afterward they view the virtual shelf again, ideally reflecting a realistic in-store scenario.
Finally, to gain deeper insight into our respondent evaluated new dog food, we conducted a survey that included click tracking and a pricing test.
This is usually where we highlight how our realistic virtual shopping method shows a very high correlation with actual shopping behavior ranging from 0.9 to even higher.
We also emphasize the importance of in-context testing, but maybe the best way to understand its impact is to see it firsthand.
[A video plays with no sound demonstrating the virtual shopping method described. The video runs from 10:00-10:25]
Alexandre de Jubécourt
The results came in and we began analyzing product appeal and the source of new purchasers.
New products from both brands proved to be highly attractive. Especially among buyers of super premium brands.
However, the new products from Purina ONE tend to attract more existing Purina buyers, which increases the risk of cannibalization within the brand’s own portfolio.
The new Purina ONE products have a very favorable impact on brand sales, but only a modest effect on Purina portfolio due to cannibalization.
In contrast, the launch of New Friskies had a negative impact on sold value both for the brands and Purina. Keeping in mind they are more affordable than Purina ONE products and were also highly attractive to the cost of trade.
What is interesting is that small dog owners seem to be less price sensitive and willing to pay higher prices for their pets while Purina ONE medium/maxi is the only product that is priced outside its perceived acceptable price range. It has also weaker perceived value for money than New Friskies is medium/maxi.
The new product benefits conveyed through new ingredient claims exhibit low awareness and comprehension among category buyers. Therefore, our advice was to invest in education and building awareness.
Maud Hua-Bulteau
We've decided to take our learnings and continue innovating with fresh perspectives in mind. Innovation can be a powerful tool to combat inflation even before its effects are fully felt as we've seen with gourmet. But innovation must be context aware.
It should anticipate blind spots and market shifts. It's okay to fail only because that's how we learn, improve and come back stronger.
We've conducted more fascinating research, and some exciting new innovations are already in the pipeline. Once they hit the shelves, we hope to host another webinar to explore this ever-evolving topic in even more depth.
For now, we hope that sharing these insights has sparked ideas for your own innovation and testing strategies.
Alexandre de Jubécourt
With that we will wrap things up a bit.
Thank you to Maud for joining and sharing your expertise. It has been a real pleasure.
We would also like to thank Quirk’s and everyone attending today for your time, your attention and your thoughtful questions are truly appreciated.
To stay up to date on the latest trends in market research. Be sure to follow Maud, EyeSee or myself on LinkedIn.
Maud Hua-Bulteau
And if you're a pet parent, whichever Nestlé Purina product you choose, your furry friends are sure to be delighted.
Alexandre de Jubécourt
Until next time, give your pet some love and take care.
Maud Hua-Bulteau
Thank you.