STRATEGIC BUSINESS DEVELOPMENT
AWAKENING TAZO, THE BLISSFUL GIANT
Situation: Tazo Tea was built upon the legendary passion and story-telling of Steve and Steve, two tea-loving hippies who lived in Portland, Oregon. Tazo brand positioning was strong and, as important, a heritage of alluring narrative that built both curiosity and commerce. Through the 1990’s, Tazo took the US by storm, creating a magical and mysterious new brand in the premium tea segment alongside Celestial Seasonings and Stash. Tazo also up-levelled cold teas with its ready-to-drink juiced teas, an unexpected beverage combination that competed head-on commoditized cold teas like Lipton and Nestea Iced Teas. The industry took notice and Starbucks Coffee – seeing an opportunity to extend its coffee concept – purchased Tazo as a day-part compliment to its coffee business. After many years at rest in a larger coffee company, Tazo eased its pace and gradually lost momentum.
Challenge: Re-ignite Tazo brands visibility, credibility and business growth
What We Did: Research confirmed the brand positioning and multi-channel business model for Tazo was advantaged; the issue was innovation. Returning Tazo to the highest levels of the category required significant change across the portfolio of fresh, shelf stable and ready-to-drink tea products. Research confirmed discerning tea drinkers looked to hot tea to legitimize brands. And hot tea is the majority of consumption globally. After taking notes from US and international brands, such as Mighty Leaf Teas and Numi in the US, loose leaf tea in sachets had become the new premium. While moving from “cut leaf” to “loose leaf” teas was relatively straightforward from a brand and market perspective, the platform introduced significant operational and financial challenges. Building and evaluating the financial model, the capital investment for new packaging equipment for loose leaf teas in sachets paid-out at a price point that Starbucks customers were willing to pay for. A series of “rapid tests” in Starbucks stores and survey results with customers revealed solutions to make it easy for baristas to give customers a great tea experience easy and limited distraction from serving coffee. After a long and measured transition to the new platform, the team launched a consumer campaign including all aspects of the Starbucks marketing engine – from public relations to signage to in-store sampling.
The US remains Starbucks largest market and the US was dominated by iced tea. In order to serve the US market, the team ramped up Tazo’s cold tea innovation. With carbonated soft drinks in a nose dive, consumers were seeking healthier iced beverages. Most iced teas were compromised by sugar and other ingredients. With a strong “shaken tea” platform and “ready-to-drink” business in supermarkets, Tazo had the opportunity to add fresh new combinations of fresh tea and juice beverages in Starbucks stores. In addition, consumers wanted more refreshment from their iced tea drinks creating an opportunity to introduce a new size of healthy iced teas. We researched, developed and launched the new 31 oz. “Trenta” size for Tazo iced teas only, a healthy refreshment solution. Despite early concerns from consumers, our research showed that a well-defined 31 oz. product positioning built around “more healthy refreshment” transformed perceptions and purchase intent. As tea is always a secondary thought for Starbucks and its customers, we worked to create more in-store visibility, placing the cold tea product alongside other iced beverages in marketing during the hot summer months.
The Result: The hot team platform accelerated to the highest growth rate in the Starbucks beverage portfolio. A number of major supermarket customers launched the loose-leaf line with new packaging, eventually accelerating Tazo sales across the CPG channel. The launch of Trenta delivered double-digit profit growth for the iced portfolio. The line-up of new iced tea concepts inspired the future launch of Starbucks Refreshers and Iced White Tea beverages. The brand’s visibility across stores in the US had reached new levels, putting Tazo back into consideration of daily visitors to Starbucks stores and setting the stage for long-term rise to its deserved leadership position in premium tea segment.
“Stuart is the ‘Total Package Leader’ who brings together sales, marketing, product and operations to effectively plan and grow a brand. I saw him very quickly set strategy, build the plan, organize the team around it, and inspire his people through execution. Stuart led the brand and team through unprecedented growth.”
CEO, Smith Teamaker
TRANSFORMING ECOMMERCE FOR STANLEY BRAND
Situation: Built in traditional retail channels over 100 years, Stanley brand had limited understanding or comfort with online marketing and ecommerce. An iconic outdoor brand in traditional channels, Stanley was invisible in online channels. Growth was anemic on Amazon. Branded online stores were troubled with shipping the wrong product, shipping late, and experiencing damaging customer service issues. Multichannel retailers were frustrated with the limited response and support they were getting from the brand for online sales, a major initiative for most of its larger retailers. The CEO and board were increasingly frustrated with the lack of progress and results with digital and made it the number one initiative for the company.
Challenge: Transform ecommerce channel sales and build new capability for the company to sustain and expand growth for the long term across online channels. Transform the Stanley online customer experience to meet the stature of the 100-year-old iconic brand.
What we did: Knowing the key drivers of online, we opened the effort to anyone who desired to join, ultimately having a 5-person team across the organization. We moved fast. Taking a holistic view across Amazon, direct and multichannel retailer, the team addressed first the fundamentals of merchandising, demand generation and operations. Seeing immediate upside on Amazon, the team rapidly re-staged the entire branded catalog and content, built a new operational/product supply forecasting process, and test and scaled a portfolio of new ads. After a comprehensive evaluation of branded direct platform, we successfully sourced and negotiated a long-term partnership agreement with a new global “end-to-end” online platform and partner for the direct store. Upon completion, the team led the redesign and re-launch of the new Stanely.com in a 75-day sprint. More than a new storefront, we built all aspects of running the online store including processes for merchandising updates, site optimization, promotion execution, forecasting and shipping, customer service, demand generation and weekly business reviews.
Results: In 9 months, Stanley’s online business more than doubled, outpacing every business and far exceeding even the highest expectations of the CEO and board of directors of the company. In addition, the larger organization developed new expertise and processes to support on-going expansion of the online business.
START-UP: LAUNCHING A BREAKTHROUGH SPORTS-TECH BRAND
Situation: Coros Wearables is a technology developer and manufacturer who invented a breakthrough product for the cycling market, the Coros LINX Smart Cycling helmet. LINX allowed cyclists to ride “hands free and ears open” while getting navigation data, ride data, phone calls, and music through bone conduction technology. LINX was a breakthrough and timely product. The investors were eager to launch in the US market but lacked an understanding of cycling, the cycling market and its highly-tuned culture.
Challenge: Build and implement the brand positioning, brand strategy, launch plan and infrastructure to launch Coros brand and the LINX Smart Helmet. Implement phase 1 of the launch.
What we did: We led Coros from brand positioning and strategy through the launch and built the infrastructure for on-going operations.
Having led and built numerous brands, we knew brand positioning and strategy was critical first step for Coros. Leveraging available insights from retailers, competitors, and a broad range of cyclists, we helped Coros articulate and align the brand positioning, value proposition and key pillars of its brand strategy.
Phase 1 aimed was a full cycle launch aimed at driving awareness, interest, consideration and purchase by dedicated cyclists for a limited quantity of product Kickstarter. With highly constrained resources for this phase of the launch, we chose to build buzz and engagement by launching as a start-up on the crowd-funding platform Kickstarter.
In the 3-month sprint leading to Kickstarter, we rapidly created the ecosystem for the brand to launch. Our work was end-to-end including developing brand positioning and strategy, brand identity, the messaging platform, media and public relations, advertising creative, website development, social media channel presence, video content marketing, influencer and athlete ambassador programming and consumer and trade event execution. We rapidly assembled a network of talented partners to help us build and launch all aspects of the brand experience leading to and through Kickstarter.
On the operations side, the team effectively forecasted, produced and shipped inventory to be in a position to fulfill Kickstarter orders quickly, a key issue of the platform in the past. We constructed the systems to support these logistics and shipping of product to end-users and independent bike dealers preparing to sell the product in the prime spring season.
As an “add-on,” the team built the strategy and concepted the next generation of performance cycling helmets to strengthen its position with competitive riders and enthusiasts.
The Result: The first phase of launch was an award-winning jump start launch of Coros. We achieved 639% of the sales target on Kickstarter, placing among the top 1% of all Kickstarter campaigns. The cycling industry broadly applauded Coros LINX, gaining significant positive press with influential cycling and technology media like Bicycling Magazine, Triathlon Magazine, Fast Company, DC Rainmaker, Bike Rumor and Geekwire. Outside Magazine named Coros LINX “Gear of the Show” at Interbike 2016 and one of the “must have” products for 2017. Bike and outdoor retailers were ordering LINX for the critical spring inventory load in.
TRANSFORMING STARBUCKS INTERNATIONAL FOOD
Situation: Starbucks’ international food operated in 52 markets outside of the United States in a decentralized and localized business model. Comp sales growth were inconsistent across markets. The quality of the food product and in-store experience was inconsistent. Partners lacked focus, pride and ownership of the food business. There was little and inconsistent innovation and limited integration with the beverage business. Yet, at the same time, food was a potent and profitable strategic growth platform for the company.
Challenge: Develop and implement the strategy to profitably upgrade and grow a Starbucks quality food business across international markets.
What We Did: Through deep-dive interviews with leaders across the business, in-market visits, benchmarking best in class food brands, and working in the stores with baristas, we gained deep perspective on the business, its opportunities and its key growth levers.
Starbucks has a clear share purpose – “To inspire and nurture the human spirit – one cup, one store, and one neighborhood at a time.” Through a series of workshops and other forums, we led the team to translate the Starbucks purpose into a shared, inspired mission for the food platform. As a coffee company, the mission was apparent, although not easy to achieve: “To create a Starbucks food experience as good as its coffee experience.”
With this perspective and purpose as our handle, the team quickly identified 4 priorities to grow the business and upgrade the quality of the food experience. Over the next 18 months, we hired, trained and lead a new international food team network and, together, unleashed a long list of baseline as well as breakthrough initiatives and innovation, including over 80 new product recipes, new food management standards, and the new Starbucks warm food technology across the majority of Starbucks’ 52 markets.
The Result: International markets returned to strong, positive comp growth cross all but a select few countries. Food quality and consistency achieved new, higher levels of customer satisfaction and fit with the brand. The food team owned and led the food platform together, creating a sustainable, competitive Starbucks quality food program at the global and local level.
DRIVING EXPONENTIAL GROWTH FOR FRITO-LAY BRANDS
Situation: Multicultural consumers were a big, growing and highly influential demographic leading trends in everything from fine arts to food trends in the United States. While they were among the most frequent snack consumers, they preferred regional brands to Frito-Lay brands. Frito-Lay distribution, sales, share, and brand equity vastly under-performed with this consumer base in geographies where Frito-Lay should be strong. The company suspected significant upside by penetrating this market.
Challenge: Evaluate the opportunity and “crack the code” on the strategy to capture the upsides offered by multicultural consumers. Prove out the consumer platform, business model and strategy.
What we did: We built an award winning new business platform from end-to-end – from insight to strategy to implementation.
It was clear that Frito-Lay’s current “import model” was not working. Consumers did not now the brands and products. Revenue and margins were low. Sales was not engaged in the program. Store focused initiatives were expensive and not scalable.
Research proved our hypothesis that multicultural consumers loved Frito-Lay’s big brands but they did not address the unique culture and needs multicultural consumer. With this perspective, we refocused effort on increasing the visibility and relevance of the big brands with 4 priorities – launching targeted products with broad appeal; investing in integrated, relevant marketing; building brand and media partnerships; and launching “Power of One” customer activations.
To dial in messaging, we led research and workshops to evolve the brand positioning and messaging for the audience. Simultaneously, we developed an extensive portfolio of new products. We hired new agencies, including director Spike Lee, and created new advertising in support of the new products. New media partnerships with BET, Univision and others enabled visibility on previously untapped media outlets. To gain scale and further credibility, the team partnered with Mountain Dew, Pepsi and AND1 brands for advertising, public relations, local and event marketing. To drive trial, the team activated stores through the “Power of One” cross-merchandising of Pepsi and Doritos. With the marketing in place, we moved four new products from concept to launch in ½ the normal time, breaking the mold for rapid innovation processes at the company.
The result: The multicultural growth platform grew 35%, five times overall company growth over 18 months. The platform achieved generated over $600M in gross revenue and expanded profit gross margin by 5 points. Product test scores for innovation stood among the highest ever seen in the company. Advertising produced the second highest ROI in the portfolio. The team won numerous company and industry awards for its innovation and creative marketing. Sales was fully engaged and asking for more programming to drive sales in their key accounts.
Get a weekly email with the best of inspiration, insights and more.