How collaboration and culture underpin innovation, insight at Pernod Ricard Winemakers
Pernod Ricard Winemakers places immense focus on innovation as core of its strategy when developing wines for different markets and tastes worldwide. Samuel Tait met with Gwenola Hanaut, innovation director, to discuss their broader approach to innovation and how it is driving growth for the business at a global level.
Samuel Tait: How did you come to be the innovation director at Pernod Ricard Winemakers?
Gwenola Hanaut: I’ve been fortunate to have a varied career history, which actually started 20 years ago as a graduate at Pernod Ricard’s headquarters in Paris. This business stole my heart, from the people and its values, to quality of the portfolio and unique business model – so much so I returned to the business in 2010. I moved to Australia in 1999 and innovation has always formed part of my roles, from the time I spent working on the Olympic Games in 2000, to the positions I held with Louis Vuitton and Club Med in the Pacific.
When I returned to Pernod Ricard in 2010, I took on the role as marketing manager for the spirits business in Australia. This was a great role that gave me the opportunity to work with prestigious brands like Absolut and Chivas Regal. My next step was a move into the strategy team for Pernod Ricard’s wine business, Pernod Ricard Winemakers, known then as Premium Wine Brands. Innovation was a pivotal part of this role and created a nice stepping stone to my current role as innovation director.
My current role uses consumer insights, to bring to market, new wines people will want to share with their friends and family. The innovation team work in collaboration with our teams of experts across the business to create the best possible wines for the portfolio. From the conception of an initial idea, to crafting the wine and creating an engaging marketing campaign, every piece of the puzzle is vital to the success of a new wine.
ST: How do you define innovation at Pernod Ricard Winemakers?
GH: For us, innovation is a mindset. It’s crucial. In fact, it forms part of our vision “Leading Wine Innovation”, which demonstrates the importance of this as part of the strategy. Innovation doesn’t happen in isolation, it is the collaboration of all departments and markets that enables us to create new experiences and wines. For example, innovation and creativity go hand-in-hand, but the roles are different. Economist Theodore Levitts had a good way of summarising this, he said: “Creativity is thinking up new things. Innovation is doing new things.” I think it’s a perfect way of explaining how we view innovation at Pernod Ricard Winemakers.
ST: Is there a specific role for innovation within the broader business strategy?
GH: Actually, yes. For us, it’s a key growth driver for the business. Not just Pernod Ricard Winemakers, but for Pernod Ricard globally. It is key to the business as a whole, and definitely for the wine business. Our job is to bring new ideas to life, to deliver new wines, and provide the best value for the business. It is important we work cross-functionally and act as a conduit between departments. Our creativity department is a key part to feeding our innovation pipeline; in fact every single department plays an instrumental role in this process.
ST: What is the role of the customer with your innovation process at Pernod Ricard Winemakers?
GH: It’s crucial. Our aim is to create wines that people will love all over the world, therefore we place them at the heart of everything we do. We work very closely with our consumer insights team to ensure any innovation coming to market is on point. I can give you an example, which is very close to my heart. It’s a Japanese wine we developed for the meal occasion. Our insights showed that, generally, the Japanese don’t really drink during meals, because they were not exactly sure how it would taste. So we tried to see how wine could participate in the meal in Japan. We conducted research in partnership with the Japanese team, and saw that collaboration is very important in this region. As a result, we collaborated with a top Japanese sushi chef, who travelled all the way to South Australia to develop a wine with our winemaker. That’s how we started the Jacob’s Creek ‘Wah’ range. This firm, dry white wine partners well with the taste of soy sauce, umami and the delicate flavours of seasonal seafood. The texture of Japanese food is pretty special, so we had to make sure the wine acidity worked. We had lots of different iterations before we settled on the final wines, it was such an exciting time. It worked so well that this range now accounts for more than 10% of Jacob’s Creek’s wine volume in Japan. In just three years it has grown very, very well.
ST: Is there a way within which strategy, leadership and innovation are linked within the business?
GH: A fundamental part of the success of innovation is to have these elements intrinsically linked. At Pernod Ricard Winemakers, they are well-connected to the global business to ensure there is a joined up approach worldwide. This helps to drive connection, passion, energy, and a commitment to innovation across all areas of the business. For example, our CEO and chairman, Jean-Christophe Coutures, leads our Innovation Steering Committee. The steering committee is a collaborative process made up of key departments involved in the innovation process (legal, wine-making, operations, strategy, finance and marketing). The innovation team, made up of four senior brand managers, are responsible for driving projects from start to finish and drawing on the expertise of the talented team across the business, including consumer insights, brand teams and creativity.
ST: Can you talk about the role of the winemaker, and how they are used in regards to innovation?
GH: Because entrepreneurship is a mindset, our winemakers are encouraged to come up with new ideas, take risks and challenge the traditional way of doing things. The creation of Jacob’s Creek Twin Pickings is a good example of this. We know consumers are enjoying sweeter wines, so the winemakers used this insight to create a light and fresh wine with a dash of Moscato Bianco, which provides that sweetness our consumers were looking for. Another amazing example of winemakers’ innovation is the idea of aging wine in whisky barrels – an idea that challenged traditional wine-making techniques. The winemakers all embraced an idea and used their skills and knowledge to bring it to life. The Jacob’s Creek Double Barrel project took more than two years to develop, and as you can imagine it also took a lot of commitment, passion and dedication. After a lot of trials, we found a taste we knew our consumers would fall in love with. Since then, the success of ‘Double Barrel’ has gone from strength-to-strength and we are in the process of a global roll out.
ST: How does Pernod Ricard Winemakers’ Innovation Steering Committee make a decision to invest or take an idea to market?
GH: There are three main factors. First, we want to make sure it addresses a consumer opportunity and creates something that makes sense from the consumer’s perspective. We also ensure there is a positive impact on our brand equity. Underpinning all of this is the quality of our wines, which is the most important consideration when we’re developing new additions to the portfolio.
ST: Are there other ways in which you drive collaboration throughout the process?
GH: Having everyone involved is an important part of the way we run our projects, so I’ve got a team of senior brand managers who manage the process, but involve a cross-functional team across many different areas of the business. Collaboration really is key to innovation and our business. Everybody can, and is encouraged to participate. This collaboration can be seen in the innovation projects we run internally, including our ‘Blue Sky’ project in Australia. This is where employees have the opportunity to develop and test new ideas, working with different members of the team from across the business locally, from wine-making to finance. We’ve also got an experimental winery at Campo Viejo in Spain, where the winemakers and technical staff try all sorts of new and exciting possibilities. Something we are very proud to offer, thanks to our creativity team, is an in-house ‘Think Creativity Lab’ where people learn creative tools to drive creativity across the business. It touches pretty much everyone, so it’s definitely a mindset here.
ST: What is the value of culture as part of the innovation process?
GH: Our core values don’t just live on paper, they’re a culture in the business – this is something I am very proud of. For example, every member of the team is encouraged to be entrepreneurial. No matter where you are located in the world, the team promote personal initiative, autonomy, rewards risk-taking and recognises the right to make a mistake. Most importantly, it encourages the development of new ideas and creativity, which are needed to drive innovation.
ST: You have talked about the difference between innovation and creativity. How are these sides approached at Pernod Ricard Winemakers? Is there a different team for ideation, and a different team for execution, or are they both together?
GH: It’s actually different teams. We’ve got a creativity team and an innovation team, but we all work together very closely in the global marketing team and will partner on the development of new projects and ideas. From an execution point of view, you need to have a very rigorous project manager. This person needs to be able to understand everything from the creation of a new label to the financial support required to take that new wine to market. The team will do whatever needs to be done to develop a new wine to market, they often have to think creatively about ways to overcome market challenges.
ST: Are there any tools that you use as part of the innovation process for ideation or creativity? Is there an example you can showcase?
GH: There are a few tools, and one I mentioned is the Think Creativity Lab. It’s an opportunity to instill a culture of creativity in our business and this is what is going to drive long-term change in innovation for our business. Every innovation starts with an idea. This training allows managers to drive and organise ideation sessions, this can be around anything from the name of a new wine to the development of the launch assets.
ST: Is there a way that you measure the impact or success of innovation? How do you know if you’ve succeeded?
GH: Yes, we have a way, it is the final stage of our innovation process. It’s actually a review of the performance of the product in market within six to nine months of launch. We evaluate the performance against KPIs, including volumes, pricing, distributions, rate of sale, and impact on equity. We evaluate these and will then make some necessary adjustments if required. It’s always important to get some key learnings out of all our key projects so we can continue to develop and improve. We are not setting our KPIs at the end or at the last minute, we build these along the way. We work very closely with our markets in charge of distributing and selling the wine every step of the way through this process.
ST: What are some of the major challenges in delivering innovation at Pernod Ricard Winemakers?
GH: Time. It takes time. It takes time to create amazing new wines. In its simplest terms, we have to grow grapes to make our wines and this doesn’t happen overnight, it is a process that takes the expertise and skill of the team, as well as the elements working in our favour. However, the beauty of working for a global business, and having six countries of origin, means that there is pretty much a harvest somewhere in the world at any one stage. It’s a lot of human commitment and hard work to drive innovation in this industry. So, for me, it’s keeping the momentum along the way. There is no exact time frame for every project. It depends on whether you’ve got a more mature wine – that takes a bit more time. White wine is a little bit quicker because they are not aged in the same way. For example with Jacob’s Creek Double Barrel, I mentioned earlier it took us nearly two years to get it to market. There was a lot of trial and error in order for us to get the perfect balance.
ST: What are the three companies you most admire for the way that they innovate?
GH: Innovative companies are transformational and create exciting new products, experiences and services. I’m always quite intrigued and fascinated by what they do. You’ve got the obvious, Apple. I think I’ve got to mention Apple. Why? Because it’s amazing in the way it created a need we didn’t have before. I also admire Dyson. I don’t have a lot of time to vacuum clean, but, they’re super innovative in the way they have used technology to make a product – a vacuum cleaner – that was not sexy, into something that is super appealing. You’re happy to pay the price for it because you’re confident in the product and its ability. For me, Dyson is an incredibly innovative company as they turn quite mundane items into something very appealing. You even want to use your vacuum cleaner, which is quite fascinating. Also, there is a company I discovered recently, which I think is pretty smart. It’s called ‘One Blip Car Sharing’. It’s a car sharing community that allows you to share your vehicle. Using your iPhone, it’s possible to find and borrow another person’s car safely and securely, which is great for people who don’t need frequent access to a vehicle. It’s developed here in Australia and it’s quite new – I think it’s a great idea.
ST: What advice would you give to people to be successful in their own innovation programs?
GH: I would say, you’ve got to establish an innovative culture. It has to be said loud and clear. Therefore, you’ve got to commit to challenging the status quo, and to testing new things. The commitment has to come from everybody in the organisation. Last, but not least, you need to have a robust process, led with passion and conviction.