Sustainable Innovation: R&D, new technologies, and the future consumer
Speakers: Miriam Ueberall and Alon Chen
Alon and Miriam discuss Miriam’s role at Upfield and talk about the importance of taste and sustainability in consumer preferences. They also delve into the role of AI in understanding and anticipating consumer behavior, as well as in streamlining R&D processes. They emphasize the need for agility and continuous learning in a rapidly changing industry, and discuss the importance of innovation and sustainability in meeting consumer demands.
[00:00:00 – 00:01:00]
Alon: Hello Miriam, and welcome to the Tastewise Summit. It’s such a pleasure to have you with us. With such a robust and diverse background in the food and beverage industry, I feel truly privileged to take the stage with you today.
Miriam: Thank you very much, Alon, great pleasure to be here and thank you for inviting me. I’ve been following the Tastewise journey for years, and congrats to where you now are. It’s an amazing company with a lot of impact.
Alon: Thank you, I mean it’s been shaped really thanks to the generous advice we’ve been getting from industry leaders like yourself through all the years, and Miriam, you come with quite a diverse background. You’ve been at Unilever, at Kraft Heinz, now leading the technology and transformation at Upfield. What really is your day-to-day job, how would you describe it to our audience?
[00:01:00 – 00:02:00]
Miriam: I’m laughing at this question, Alon, because I often come home and my day looks completely different than anticipated. It’s a very dynamic world, I’m working and maybe allow me just for the audience also to explain and introduce Upfield very quickly. We are leading the future of food in plant-based with a category of four distinct segments that we focus on. We launched the first plant butter in 2019 and we have started to build that market globally. We are a global leader in spreads, we have legacy brands that range more than 150 years in history and legacy such as Flora, BlueBand, Becel ProActiv, but there are some recent additions, Violife and Rama is one of our old historic brands.
[00:02:00 – 00:03:00]
Miriam: We have creams, we have liquids, and we have plant-based cheeses — so that is Violife, a company we acquired three years ago. Upfield makes about 3.3 billion in sales and we have a large global footprint. I’m the chief R&D Officer for the company based here in the Netherlands in Wageningen, where we have our Food Science Center, and from here we navigate the agenda and we deliver across the globe. So my day-to-day is a great mix of bringing products to our consumers and making sure they taste great, they perform great, and consumers repeatedly buy, but also looking at the packaging elements. We drive a sustainability agenda, we want to reduce plastics, we want to make sure our packaging material doesn’t have a negative impact. But also, leading a sizeable team and that does mean that I spend quite some of my time in conversations and team building and helping people, and then also assessing how we can bring R&D to the future and how we can create a truly future proof organization.
[00:03:00 – 00:04:00]
Alon: So actually this is quite incredible, I mean being a brand that was so much ahead of the game, of anyone else in the industry coming up with plant-based, right? Before it was cool — before consumers truly embraced and understood why it’s good for them and for the environment. And with such a large legacy, there also comes a lot of responsibility and specifically I wanted to ask you, how do you really anticipate consumer behavior because you are ahead of the curve, and how do you think preferences will evolve in your category or in the food industry at large?
[00:04:00 – 00:05:00]
Miriam: I would say there’s definitely some things that have to be right, and the very first and most important point is taste. So that’s why we put so much effort into making sure whatever we sell tastes great and really delivers to consumers’ expectations. Taste is truly the first and foremost focus, but next to that we want to make sure that the performance of the product and when we talk about spreads, you use them in very versatile ways, so from spreading to cooking, to baking to whatever new trends come up that they deliver there, but also then the price has to be right. And I don’t think that will change when you look at the future. I do think that things will be added on top of that, but that is the base level of things that needs to be in place. Consumers are willing to pay price premiums, so it’s not that price has to be lowest price ever, but obviously we need to tend to the needs of the society that covers the whole price range.
[00:05:00 – 00:06:00]
Miriam: What I believe will come as an increasing demand from consumers is more requests for positive nutrition, and what I used to think for many years in my career is that the goodness of things in terms of environmental impact, in terms of sustainability, is a big consumer demand. In reality, it’s actually an icing on the cake, it’s not an underlying need. So consumers are happy when products and packaging is doing good but it’s not going to drive the single purchase intent.
Alon: It’s fascinating, many years ago when there was a lot of meat analogs coming out to the market, we did research and we saw that actually most of the executives in the industry claimed that the main consumer driver for buying meat analogs was actually sustainability and when you look at the data, we actually see that health is the leading need. Animal welfare and sustainability are behind, it seems like it’s almost going to be a prerequisite to the product — they have to be sustainable. But this is not where the consumers’ hearts and minds are. I want to talk specifically about the consumers in the era of fast changing needs and demands. How do you see the role of AI in that context? How do you think AI will play a role there?
[00:06:00 – 00:07:00]
Miriam: It will play an important role and there’s also “watch outs” related to that, and I’ll explain a bit what I mean. When we zoom out, we know that our consumers are not yet fully aware of what happens in the products, and they have preconceptions and they are sometimes misinformed. And there isn’t always a level playing field when you talk about how the dairy and non-dairy compete or meat and non meat, so there’s a lot of things that consumers have to deal with. A lot of information and maybe information overload, but therefore it’s sometimes lack of understanding, so I think AI can play a tremendous role in helping to upskill consumers, in helping to navigate the complexity. And that is the bit to watch out at the same time, because obviously AI can also generate fake news or generate fake images so it’s really making sure the right checks and balances are in place and having the right approach there. But overall, I do think AI can make life so much easier in facilitating decisions, getting information, but also creating interaction. And we’ll talk about it probably in a little while, but when we talk about industry and consumer needs, I do think AI is a very exciting tool to explore more.
[00:07:00 – 00:08:00]
Alon: Absolutely, when you started with your opening, that this is something you and I were discussing quite a bit, in a world where consumers are changing so fast because of their environment, because of media, because of access to information that is more available than ever before, and as you said, information overload oftentimes. And it’s not necessarily always the right information. There is a great need for organizations to change and we know because we’re talking a lot about talent, getting the right people in place. How do you see your role as a leader of such a large company, in getting the right talent, but most importantly, actually doing the change management? How do you go about it, making sure that people wake up in the morning and they understand that someone moved their plant-based cheese and they need to do something differently today?
[00:08:00 – 00:09:00]
Miriam: Great question. So, I think there’s a few different elements to your question. Let me start with how do we make sure our talents are fit for the future. When we look backwards I think a historical upbringing in an R&D career has been that you learn the trade by putting your hands into the product, and spending your time in the lab and in the factories. And obviously talking to consumers, being out in the market. Looking ahead, some of that will be needed but not all of it. And what you need is a much deeper data science understanding and the skillset in that area, and we’re not there yet. At the moment I think we have strong R&D talents that understand the product and we have great data scientists, within and outside of the company, and we need to bring them together. We need to start grooming talent that have more data skills, and can then evolve further together.
00:10:00 – 00:11:00
Miriam: And I think we need to still spend much more time to define the jobs of the future and also to play a role in understanding how do we seek those talents? Where do we get them from? What educational principles are in place at the moment and what is missing and how do we need to enrich that? think that’s a very important one and then next to that, we need to drive the whole mindset shift. The mindset shift is really about thinking data first, and thinking facts first, and thinking how many, what data do I have, what decisions can I take today? What data don’t I have and how do I get them?
00:11:00 – 00:12:00
Alon: It’s interesting when talking to people like yourself, coming from large companies, Tastewise is not so big yet, it’s like 80-90 people at the moment. And what I find is that the biggest challenge I have is to constantly help people change mindsets. Because the context is changing so rapidly, so back in 2018 we came up with the first AI for food and beverage. Then in 2023, generative AI stormed in and in less than two quarters, we had to change our entire roadmap, our entire data platform, and really adapt, because if you won’t adapt, you’re just going to stay behind. One of the tactics I found to be useful is to make sure that everyone stops doing what they’re doing, and come up with a new theme, a new narrative. Our narrative for H2 is; Need for Speed, because we need to make sure that we help our customers move faster, because the consumer is moving faster and so everything is going to be under a new umbrella. I found it to be extremely rewarding when it’s happening, but also heavy lifting to be able to move there. And I want to–
00:12:00 – 00:13:00
Miriam: On that Alon, before you ask the next question, just to add, so I fully agree with what you’re saying and I think what you’re touching on is the need to be very agile. And that’s mindset, but that’s also behaviors. So what I ask my team is, what should we do differently? How do we change the status quo? Where do we want to be tomorrow? It might not be the same place as where we are today. So it’s really the combination of that and I think that requires also ongoing positive intervention in terms of changing the thinking, disrupting the thinking and learning as we move forward.
00:13:00 – 00:14:00
Alon: Yes, it’s also the need to make sure that there’s infrastructure in place, not just to make sure people are saying they’re changing, but also making sure that they do, right? Making sure there’s actually new practices and not just new names for the same behavior. Because it gets very confusing and it’s a human tendency, right? It’s like our neurotic survival mode that forces us to stick to what we know, and when the context is changing so rapidly, we need to change. It’s exciting when we do and exciting when there’s leadership that understands the need to do that. I want to ask you, given that the world is changing fast, consumer are changing fast, and there’s a need for rapid innovation, with the imperative of sustainability in R&D. How do you strike the right balance between sustainability and innovation needs in the rapid moving environment?
00:14:00 – 00:15:00
Miriam: The need for the right mindset is utterly critical but also the need for ongoing reviews on efficiency gains. I think what we need to do is we need to constantly review where we spend time on, and how do we create capacity for the new things and that means we need to unleash efficiencies where they are not yet unleashed, in order to reinvest them somewhere else. And that is then an area where we create a capacity to think, are propositions touching what they need to touch? Are we doing things that have an impact in the market, and do they stay? We don’t want to be innovation junkies and we don’t want to do greenwashing claims, we need to do that with the right integrity and rigor and for that we need to make sure we invest our time in the right thing and really create this capacity to think, which is a challenge in a very fast moving environment and in a fast moving company. And as Upfield, we have the ambition that we do elevate our portfolio at a very rapid time in a relevant manner. So, the pressure is ongoing in a positive sense.
00:15:00 – 00:16:00
Alon: And pressure always makes us better, right? It makes us think exponentially. Speaking of innovation, how do you envision or what do you envision to be the next big breakthrough in food and beverage, and how is that position to be at the forefront of this? With your leadership of course.
Miriam: I think the breakthrough for me comes from functional ingredients and from cost proposition, so it’s two things, there’s more and of course there can always be more. But on functional ingredients, as we are playing also in plant-based, we want to make sure that we use ingredients that are sustainable, that are not depleted, that are doing the job in the product, so that’s an ongoing search. We have a 24/7 scouting mentality, we’re constantly on the lookout for what happens in the external environment, we have a number of strategic partnerships but we believe that from the ingredient base, and it’s not only to provide nutrition in ingredients, it’s really functionality in terms of product structuring, product performance, taste retention, taste release, these type of things.
00:17:00 – 00:18:00
Miriam: I think that is where a big one sits for us in Upfield. And then on the cost proposition, we know that in terms of technology, and as we’re approaching the next wave, more mature technologies will enter the market, they will all play an important role to bring costs down so that we can really offer better choices for consumers and make this transition for a plant-based diet easier with our changing habits. I think the cost proposition, finding solutions that allow you to create lower price points is going to be a very important one. So that’s all a bit blurry out there, it’s nice big words. I think very concretely we see precision fermentation as an area that has evolved, we see packaging developments as an area that has evolved, and just to do a bit of self-marketing, I’m extremely proud of the Upfield team because we have launched the first ever paper tubs for a spread, for a plant butter and where there’s no oil leaking out, it’s 100% recyclable in the paper waste stream, this is truly an industrial breakthrough. So, also more ingredient, or more material solutions for packaging I think, will be super important and we have a pipeline where we’re working on very exciting things for the future as well.
00:18:00 – 00:19:00
Alon: So we’re always trying to find one big shiny thing, right? What you’re saying let’s just look at the entire farm to table process and see how we can optimize every step of the way, from the precision fermentation, knowing the ingredients that can be functional, and help the product be stable, and then all the way to the packaging, right? And this exciting, but it also creates a complex environment, and you need to be like a jack of all trades, almost. Making sure that you really look at everything and make sure that you’re optimizing every step of the way, not just like one big thing, right? It’s not just generative AI and integrate a new product, and this is great. No, actually it’s a lot of labor.
00:19:00 – 00:20:00
Miriam: And what you need to do also, and you’re probably doing that through a very different lens in your business, Alon, you need to do a lot of parallel tracking. You need to follow a number of parallel paths in order to come to an end solution or goal, and it might not be that one path leads you the way you want to be. You need to take the learnings from other paths and stitch them together in a new way. So, I think this is something that’s coming back to mindset and allowing yourself to not only follow one route, but to follow many different routes, that’s super important for success.
00:20:00 – 00:21:00
Alon: It’s really diversifying the risk, because you need to optimize a few things. One of the elements I’m seeing is that talking to leaders is like, how do you make sure that a team is also willing to take a risk? And how do you create an environment where failing is actually a great learning experience, is actually not a bad thing, it’s actually a good thing, because you tried?
Miriam: And I think we’re not there yet, right? I still see it as a challenge for people to really say, “You know what, it didn’t work.” We need to foster this culture of failing more, and we need to allow people, or give them more confidence and reassurance that it’s really okay to make mistakes.
Alon: The cultural change is as important as actually, your goals, or even the talent you have. You can bring like exceptional people, but if they’re too conservative they may not be future ready.
00:21:00 – 00:22:00
Alon: Many people that are not from the food and beverage industry don’t really understand the complexity of the environment. Some people call it the food system, and I recently heard someone say, it’s not a system, it’s all broken. What do you think could be the more meaningful efficiencies or areas where we as an industry need to focus on?
Miriam: For sure it’s shared goals, I’m really an advocate for more shared goals in order to fix the things that are broken, which means more alignment and more trust and honesty with each other. That can mean a million different things, but it’s really about what do we want to fix, or what is not working at the moment, how do we really get there? Making sure that there is food security for everybody, that’s a huge topic obviously, but it doesn’t work if every individual player across the value chain works as an individual player. It only works in partnerships. I think that’s one, another one I said in the intro already, I think consumer education is really critical. We need to make sure that we keep the consumers on a journey because we don’t always do that.
00:23:00 – 00:24:00
Miriam: And it’s not only us as manufacturers and brand players, it’s retailers, it’s general partners, so I think there’s a big need to help society to understand how it can make informed purchase decisions and to give them choices and the right information to do that. Then it comes back to how do we make information available? And then I think there’s another topic, which comes back a bit to shared goals, we need to make things measurable. When we talk about sustainability, science based targets are super important, and to create comparability of things. The last part I would say to your question maybe is we also need to fix a few holes and regulatory and advocacy environments. We’re not playing on a level playing field so we have historical advantages of some players in the food system, or some areas in the food system, which are maybe not future proof. And I think we need to remove those historical advantages and create more leverage.
00:24:00 – 00:25:00
Alon: It’s interesting, we often think that government regulation of businesses is not necessarily good, but I mean, carbon credits, right? It really has pushed so many players to think consciously and sometimes actually make profits when they took the time to think about the process, improve, and then reduce carbon and at the same time help the environment, and impact the bottom line, which is so important, right?
Miriam: Yeah, and we actually do call for governments to take more responsibility across the food system, because we feel that there needs to be a mutual body in some areas to create comparability or to create the same labeling regulations or whatever it is. I think everybody in the end has responsibilities and a stake in this, and we need to work that out together.
00:25:00 – 00:26:00
Alon: The one good thing about COVID was that it actually allowed people to have a lot more spare time, and to get more familiar with their kitchen, and there was a big movement around sourdough bread and fermented foods, and there was a really big moment, and even parents cooking with kids. Like we used to do with our parents. We used to help our parents in the kitchen.
00:26:00 – 00:27:00
Miriam: True, even I was one of those bread makers during COVID. Do you see from your data that this resonated and is it sticking?
Alon: Yes, there’s still demand for parents cooking with their kids, there’s still a constant increase of the number of people cooking at home. I think the industry also needs to find ways to make it easier. So at some point in Europe as well as in the U.S. meal kits were a solution where you can actually get the recipes ready for you. But today, the good news is that food is becoming a lot more central in people’s day-to-day, in a more meaningful way. Whether they go to food service or restaurant, or whether they cook at home, if you open the TV channels, such a big part of the day is actually cooking shows, reality shows around cooking, chefs are the new celebrities, and so I think that there’s an ongoing renaissance since even before COVID into how much food is part of our lives and the data shows that actually people care a lot more and they understand food is almost like the most important medicine that they put into their bodies and so they’re very thoughtful about it. And it’s no longer one size fits all. You can’t say oh, I have a healthy product. No, people don’t talk about health anymore, they talk about fertility, about menopause, about stress, about sleep, about energy, about brain fog, about bloating, they want their food to work for them.
00:27:00 – 00:28:00
Miriam: True. And I do think this is also going to be an area where we need to all get our heads around driving innovation pipelines and how we can make sure we have the right propositions for those. I do agree.
Alon: Yeah, so for my last question, it’s really more forward-looking, how are Upfield and you specifically, utilizing the AI in your current R&D process, or how do you plan to do that in the future? What’s ahead for R&D?
Miriam: A lot is ahead, Alon, it’s very exciting and we are building a proper plan as we speak, but let me quickly zoom out… we are using AI already in a very successful way, but in a small way. For example, in areas like portfolio management, revenue growth management, to really have the insights or the early indicators of anomalies in finance and environmental, to understand if investment is efficient, or what are the learnings, how do we pivot going forward?
00:28:00 – 00:29:00
Miriam: We also apply some generic AI approaches, helpers or bots, we want to start using bots a bit more. We’re creating images from text. Those are some of the generic things which are used in Upfield at the moment. Translating that and zooming into R&D, I would love to start using bots for getting our helpers to do a better knowledge search. We don’t have that yet, but this is definitely on the agenda for us to crack. How can we make it as easy as possible for anybody in R&D to know about the portfolio, about the product, about the question, about the problem, about the opportunity — whatever it is. That’s a big area to use AI, to really mine your own knowledge. And then there’s a big one for me, which is all about prediction and predictability, and more from a visionary point of view, we need to get to the point that we can predict consumer needs, because that is one of the huge leapfrogs going forward from an R&D point of view. So, early understanding of what do consumers want, but also matching that to what our portfolio offers, and then using AI to close the gap and to get us to output as fast as possible.
00:29:00 – 00:30:00
Miriam: The third area I would call out for R&D for me is modeling, of course it is an underlying element to go into predictability, but as an example, modeling of shelf life. We need to make sure we have models that help us to anticipate shelf life, or trends, or is your packaging surviving the truck transport across the U.S. — or whatever it is. So modeling I think is a very big area that we need to look at. We’ve started to launch a number of pilots, we’ve started to learn and upskill ourselves, we’ve started to place a few strategic roles within R&D, that take that ownership and obviously the people in these roles are playing a role in helping us to shape the future.
00:31:00 – 00:32:00
Alon: That’s exciting. One thing you were saying that is so important is almost like we have to democratize data and make sure that also R&D teams have it. And they feel empowered and they feel close to the market, to the consumer, and obviously also to the technology that is moving so fast that can help shorten time to market, and really cater for consumers. What I love saying is that if we were able to bring the failure rate of new products from 90 percent, to 100 percent success rate, consumers and the environment would have so many great experiences. Product that help them solve problems in their daily lives.
Miriam: So all of that is to have a higher success in the market, doesn’t always have to be 100 percent, I think there’s some things that we should always learn from, so let’s make it 99 percent. But for sure, we need to reverse that equation drastically, because at the moment, the things even that might fly, they don’t last long enough. So, increasing innovation impact and market success is super critical.
00:32:00 – 00:33:00
Alon: But the most important thing is really to stay close to the consumer and keep innovating, because if we don’t innovate, we’re going to lose the market, miss the mark. The point of entry is much lower today, a competitive advantage of economies of scale are slowly disappearing. It’s a complex environment, but innovation is key and we know that innovation that succeeds can generate a lot of revenue and profits, but more importantly, actually tailor products to what consumers really need, which is what we are all here for.
Miriam: Exactly. And I love your passion for consumers, and this is something that we need everybody to have who works in the industry.
Alon: Miriam, thank you so much for your time.