Nestlé subsidiary sees sweet returns from data-driven transformation

Just months after it began a wide-ranging digital transformation project, Nestlé Brazil’s investment in data analytics had already returned $5.5 million (R$22.7 million) in new revenues – and created 11 new strategic data assets – thanks to an increasingly data-centric customer engagement system and internal analytics centre of excellence.

It was a major change for the company, which has managed Nestlé’s various food and beverage businesses in the country of 211 million people for nearly a century and enjoys a 99 per cent market penetration rate.

Despite its market success, explains Nestlé’s Director of Digital Transformation and Innovation, Carolina Sevciuc, several years ago “we realised that our level of innovation was below what it should be as a world leader in food and beverages; we understood that it was necessary to take a bigger leap and, once again, put innovation at the core of the company.”

The push to boost innovation through digital transformation was a common catchcry among businesses, even before the COVID-19 pandemic forced companies to embrace digital operations significantly faster than they might have done otherwise.

A July 2020 McKinsey survey, for example, found that 58 per cent of customer interactions worldwide were being conducted digitally, compared with 36 per cent at the end of 2019 and just 20 per cent in May 2018.

Overall, companies made as much progress embracing business decision-making technologies in 25.4 days, McKinsey said, as they would have done in 635 days before the pandemic — 25 times faster.

Yet consumer packaged goods (CPG) firms like Nestlé had been slower off the mark than sectors such as healthcare, financial services and professional services — reflecting the exact type of inertia that Nestlé Brazil was seeking to eliminate.

Building a data culture

Working with digital transformation partner CI&T — a 3,300-strong global strategy advisory that is ramping up its Australian presence to participate in local companies’ increasingly-mature transformation culture — Nestlé Brazil workshopped its data capabilities against its desire to improve the consumer experience of the brand.

This included developing new ways of capturing and monitoring market changes with, as Sevciuc put it, “a focus on fulfilling the desires of consumers fully, efficiently, quickly, and constantly”.

Transformation discussions highlighted 3 key cultural changes that needed to be put in place: 1. aligning all of the company’s teams so they were focused on the same objectives; 2. transforming process dashboards into insight-providing assets; and 3. finding new ways to disseminate information about new opportunities, projects and solutions.

The two organisations ultimately set down a transformation strategy built around three key pillars: innovation, digital sales, and data via DataLab — a new CI&T-Nestlé partnership built around a better understanding of consumer journey data.

These pillars supported an overhaul of the company’s internal culture, with data placed at the centre of decision-making and operational data finally being stored in an organised and structured way.

“Digital transformation or acceleration has been a common theme across many industries in the last few years, but without an agile and people-oriented culture in place — and a data-driven mindset to match — change can be difficult to achieve,” says CI&T’s Digital Transformation Director, Leo Abdala.

“Whether in Brazil, Australia or anywhere else, companies have realised the key to meaningful change is getting on top of the data, and helping it permeate each and every part of the organisation.”

Adoption of new machine-learning, artificial intelligence (AI) and analytics technologies helped the transformation team identify 11 new data assets within a few months – each providing new ways to encapsulate valuable information and empower business areas to use it.

Support for business culture and mindset change drove the consolidation of a data-focused culture within Nestlé Brazil, with up-to-date data providing greater insight into consumer behaviour and desires.

Teams behave in a much more agile way, working together to develop new solutions and iteratively improve them based on ongoing data collection.

Acting on this information helped drive initiatives that delivered an additional $3.3 million (BRL $13.6 million) in revenues from the company’s Starbucks business, $1.4 million (BRL $5.9 million) from its Nescafé operations, and $770,000 (BRL $3.2 million) from its dairy products.

And that’s just the beginning, with consumer-facing teams becoming much more agile and responsive as they find new ways to capitalise upon ever more useful data assets.

A rich base of consumer data and analytics is also supporting new efforts, with DataLab tapping the new data sources to power a new WhatsApp chatbot that allows Nestlé to speak with consumers through engagement with its Dolce Gusto brand.

“Having increased our repertoire using machine learning, chatbots and AI, the following years will serve to sustain these improvements and expand it within our digital assets,” Sevciuc says. “We can expect new business models to emerge in what is sure to be exciting years ahead.”