How Kraft’s Mio Brand Built a $200 Million+ Business and Became a Breakthrough Innovation Leader with Marketing to Millennials
You probably have known Kraft’s leading beverage and flavor brands such as Jell-O, CapriSun, Tang and Kool-Aid for years. Since these iconic brands are one of Kraft’s greatest strengths, you might expect that any new flavored beverage product offering would be introduced as a line extension from these well-established brands. And, in fact, when Kraft started development for Mio, the liquid water enhancer, it was explored as a closer in line extension for the Crystal Light brand. You may also know that close in line extensions often receive low levels of marketing support both at launch and ongoing.
Luckily, that’s not the approach that Kraft took. Instead, the business team stepped back to think about how to make liquid water enhancers an incremental business platform, with a new brand and a new target. As Barry Calpino discusses in the Nielsen Breakthough Innovation seminar:
“A lot of Kraft products traditionally target the stereotypical soccer mom. For Mio, we decided on a Millennial target. We did things differently. For example, we launched digitally before we were even shipping product, and ran a campaign with a character from Second City. The campaign was viral, and had high viral content before Mio was on shelf. We were on Facebook offering free samples. We also focused our resources. Mio was the biggest launch in the history of Kraft, with over $50 million in advertising and promotion spending in the first year, and continued spending and growth in the second year.”
And Mio’s marketing and strategic positioning directly addresses one of the top needs of Millennials, allowing them to personalize their drink. As Becky McAnich, Mio’s marketing director, discusses in Ad Age:
“Millennials really personalize every part of their life…from Facebook to music playlists…you can make it any way you like. It embraces their individuality, that customization.”
This personalization and customization is clearly showcased in the brand’s advertising. For example, in “Changes” where office workers shake things up by adding Mio to their bottled water:
Mio’s success resulted from optimizing many aspects of the product offering, including the brand name, packaging, positioning, and pricing. And, as importantly, by organizational focus and prioritization. In the Nielsen Breakthrough Innovation webinar, Mr. Calpino describes how Kraft has defined three tiers of product offerings and puts more of its innovation resources on ‘Tier 1 Big Bets,’ which are “large platforms, multi-year pipelines and substantial A&C spend, margin accretive.” This multi-year platform discipline, highlighted in Nielsen’s Report, is so important to Kraft that the internal program name within Kraft contains Year 2, for example “Mio Year 2”. Another important element of Kraft’s “Innovation Recipe” is ‘customer delight’ and partnering with retailers.
Barry describes how Kraft management pushed for higher levels of spending and capital investment than would have historically been considered with a more conservative mindset that focused on mitigating downside risk. If the original innovation approach had been followed, Mio would have been a ‘nice item called Crystal Light Concentrate,’ and not the large new business platform that it is today.
Mio’s results speak for themselves, winning the Wal-Mart innovation of the year award in 2011 across all categories, winning a Gold Medal Edison innovation award in food in 2012, and winning over its target consumers: the Millennials. Many organizations are committed to building a business with Millennials, and Mio offers an instructive success story.