Optimizing Innovation – Patrick O'Riordan of Anheuser Busch-InBev

We are happy to bring you some of the key points and insights from Patrick O’Riordan’s talk at the Optimizing Innovation Conference, which was held October 21-22, 2009 in New York City.

Patrick O’Riordan, Global Director of Insights & Innovation at Anheuser Busch-Inbev spoke about balancing short, mid, and long-term initiative in your innovation pipeline. Patrick sits in the marketing organization and serves the top 10 markets and focuses on filling the innovation pipeline using a decentralized, lean organization. Recently, they’ve been opening up more to their peers and people outside of their organization.

They’ve lost global share of thoat over the last 10 years (Diageo too), but they are gaining within alcoholic beverages at the expense of spirits. The Chinese are gaining a taste for beer and China is the biggest market (by consumption).

Anheuser Busch-InBev has a ‘World Class Commercial Program’ focused on creating a marketing excellence culture – focused on renovating & innovating.

It’s not all about new products, but about staying contemporary with our customers:

• Look at innovation through the consumers’ eyes
• Renovation could be a bottle or label change (same basic product)
• Renovation offers similar benefits
• Innovation offers similar benefits in a better way or additional benefits

“Never fall in love with the process”

They focus on clear goals and clear targets and their innovation culture is tied into their corporate culture. They have eight modules in their innovation process – four at the front-end and four at the back end, with four stage gates for the four stages at the end – with a fuzzy front end.:

• Define R&I Strategy & Brief
• Develop concept platforms
• Generate ideas
• Write & test concepts
• Prioritize
• Determine feasability
• Develop product
• Execute launch

They created an online innovation management system only about 18 months ago and it has had a huge impact on time to market.

Anheuser Busch-InBev focuses on Share of Throat (SOT) innovations (new skus), Share of Beer (SOB) renovations & innovations (new skus), and securing & improving competitiveness renovations & innovations (part of the core – existing skus). They distinguish between liquid and packaging innovations.

They do measure how much of their revenue comes from innovation (now that we’ve been going for a few years). They would like to work with their competitors to make sure that their category stays relevant.

In the Anheuser Busch-InBev model, different organizations have different time horizons:

• BU/Country = 0-18 months (competitiveness and SOB renewal)
• Zone + Global = 18-36 months (SOB & SOT renewal)
• Global – long-term = 36-60 months (consumer trends/growth opportunities)

One of the things that the central innovation group organizes, is InnoWeek – an innovation week workshop. They have to go and live it and work it with them including legal, CSR, and other roles. They have an Oceans Eleven type approach with functional experts that bring best practices to different countries.

They focus on satisfying the emotions of the customer, and do a lot of ethnography and observation and co-creation with pro-sumers. You have to keep in mind that the consumer sometimes says one thing but means and does another thing. They are also looking to partner with other companies (like Apple, P&G, Danone, Unilever, BMW, etc.) to share customer insights.

Braden Kelley is the editor of Blogging Innovation and founder of Business Strategy Innovation, a consultancy focusing on innovation and marketing strategy. Braden is also @innovate on Twitter.