In this podcast – which you can now listen to on either Apple Music or Spotify (finally!) – Ian Jindal and Jamie Merrick welcome Rui Francisco, European Ecommerce Director for PepsiCo. From growth opportunities to mystery boxes, Francisco provides a fascinating glimpse behind the scenes at PepsiCo.
Part one with Rui Francisco:
PepsiCo is a global consumer company that has a presence in nearly 200 countries. In addition to their flagship Cola Pepsi, PepsiCo owns many other esteemed brands including 7-up, Mountain Dew and Walkers.
Francisco has worked at PepsiCo for over a decade, with his first role being in Mergers & Acquisitions, followed by sales strategy. This was until he discovered a passion for ecommerce in 2015, which he has worked in ever since.
During the full podcast, he explains everything you need to know about the company; from partnerships with third-party retailers, through to the ins and outs of PepsiCo’s direct-to-consumer projects – including the thought-process and motivation behind each one.
For now, here are the key takeaways:
How did you get into ecommerce?
- Degree of passion: “I was always saying ecommerce is important – we need to make sure there are consumers who are going to find our products online.”
- Being the right fit: “We started looking into the retailers and the talent profile they have on the other side in terms of how they grow the categories and how they grow their own businesses, many of those people had a very similar background to mine – having come from consulting, people with MBAs. So the talent profile they were looking for was a bit of a match.
On making time-zone differences work at PepsiCo
“We have teams within the markets…we have operational teams in the UK, France, Turkey, and Russia that are responsible for operating and delivering the business within those markets.
“My role as the sector person and the team that covers all of Europe is to make sure we have the right strategy and the right execution within these markets because there’s a lot of things that we can learn from one market – pick it up, and send it to the other. There’s also lots of benefit in synergies and having consistency in terms of how we approach commerce and that’s basically the role that I do.”
On making space for ecommerce in such a competitive space
Francisco begins by explaining that the vast majority of PepsiCo’s efforts in selling products online are, in fact, with leading retail partners around the world, including Tesco and French supermarket, E.Leclerc.
“In this spirit it’s very important for us to have key partnerships with players in this space,” he adds.
“One of the few things I can share with you is that we’re leading behind some of the biggest players online and we have strategic partnerships with customers like Ocado United Kingdom and Tesco, which has actually rented us number one spot in commerce for the Advantage Group Survey which was a good recognition that we got last year in 2019.”
Next, we asked Francisco how the pandemic impacted PepsiCo’s demographic:
“With covid we saw many more people coming into the online channel to buy their groceries – it was the increased frequency of shoppers that we’ve seen before on this channel, but we also saw new shoppers coming in.
“We saw people that are older, like above 65 years old, we saw people outside of urban areas start to buy their groceries online and also people who are less affluent.”
“Older demographics who were staying at home for social distancing – they saw online shopping as an enabler to get their shop delivered at home.”
Do you think this is a permanent shift?
Shopper surveys revealed a little bit over 50% of these shoppers started buying online groceries this year, and will continue to do so in 2021, Francisco shared.
On changes with partnerships
“All of us need to adapt and build the capabilities to serve the shoppers of the future,” he emphasises.
“With a sudden influx of new shoppers wanting to go and do their grocery shopping online, the capacity was severely constrained by our retailers…they had to manage that overflow and so one of our first priorities as a CPG supplier was to ensure that we had availability of our products.
“In Russia we started doing night deliveries….and then in other markets like Germany instead of just fulfilling the regular warehouse that we have been fulfilling for the past year – we started working with our retail partners to understand which warehouses had less capacity and were a little more free for us to deliver to them.”
How are you approaching direct-to-consumer in Europe?
“Make sure there’s a specific objective behind it and not just doing it just for the sake of doing it.”
1.PepsiCo made their kombucha brand available during lockdown to Spanish consumers who didn’t have an outlet for buying it outside of restaurants and cafes. This was done through setting up a direct-to-consumer website with all of the flavours and all of the products, which led to a greater familiarity of the beverage and higher willingness to buy following the lockdown.
2. A direct -to-consumer proposition in the Netherlands called Unwasted – a surprise box that you buy on the direct-to-consumer website which contains products at lower shelf life versus what you would normally find in a regular retail store, that doesn’t have time to go through the regular distribution routes. PepsiCo have sold over 10,000 boxes while simultaneously, saving 30,000 products from being destroyed.
On product journey
“Specifically for this product in the Netherlands we had a playful competition called Dragon’s Den where different teams presented different options – then it was voted. Everybody was very supportive behind it because it really helped us build some of those capabilities for ecommerce but also served really well for the sustainability of our business.”
Francisco adds that the team of internal and external experts were key to the proposition’s success.
“We want to make sure we’re very consumer-centric in the products we develop, we see ourselves as a little bit of a window into the future shopper – we want to make sure that we bring innovation prepositions into PepsiCo and to develop now products online that we can then bring to other retail partners.
“We’ve done partnerships with Call of Duty, Doritos…last year at Christmas we had a Doritos box which also had a Christmas ornament and there’s a new surprise that’s coming this year as well.
“Then second, we also want to continue strengthening the partnerships we have with our retail partners across Europe to develop new ways of serving our products. I’ve already talked about personalisation at scale as one the initiatives within the marketing angle, but also in the future getting more into the operational capabilities. So we see our agenda very linked with the retail agenda as well.
“Lastly, it’s about the talent profile and the people – we want to make sure we keep developing the right profile in terms of talent, bringing skills into the organisation that will be important for us to keep succeeding in the future.”