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Reinventing Innovation and Re-Thinking Possible at the Front End

QUICK SUMMARY

The session features Tim Joyce from ZS Associates interviewing Erica Norton, Senior Director of Consumer Insights at Hershey Company, about their AI-driven innovation approach called Atlas. Hershey has transformed their innovation process by leveraging AI to analyze thousands of consumer data points and generate compelling product ideas, brand concepts, and partnership opportunities rather than relying on traditional ideation sessions. The AI-powered approach has proven more efficient, effective, and enjoyable, delivering better innovation outcomes while providing clear rationales for each idea and inspiring more creative product visualizations.

KEY QUOTES

  • “We’re looking at thousands upon thousands of organic consumer pieces of information being fed in, so right there, obviously much more compelling, right? Really grounded in consumer insight and the organic information that consumers are offering up on these product reviews in different forums digitally.” – Erica Norton
  • “We have fully drunk the Kool-Aid at this point and are finding us in such a better place in terms of innovation pipeline because of that.” – Erica Norton
  • “We’re no longer talking in the abstract. We are shopping for ideas instead of trying to create them. And we’ve got hundreds of options and they’re beautiful and we can talk in specific detail about why those individual ideas work and don’t work.” – Tim Joyce

FULL SESSION SUMMARY

The AI-Driven Innovation Approach

Tim Joyce from ZS Associates opened the session by introducing their AI-driven innovation approach that helps clients develop more rapid, scalable, and productive innovation programs. The approach combines raw consumer data with AI capabilities to create powerful innovation outcomes. As Tim explained, “The consumer is an outstanding innovator, but is not very articulate and is not good as an individual at representing the desires of large segments of consumers. On the other hand, AI is incredibly articulate, but a very poor innovator.”

Their solution involves two key data collection methods: scanning the marketplace to understand existing propositions using vision models, and gathering consumer feedback at scale from online marketplaces and social sources. AI agents then aggregate and synthesize this data to identify emotional trends, product trends, functional needs, and cultural touchstones relevant to specific demand spaces or categories. The result is the development of new brands, items, experiences, and products presented as testable concepts.

Transforming Innovation at Hershey

Erica Norton shared how Hershey has been working with ZS for nearly two years, completely transforming their innovation approach. Previously, Hershey relied on traditional ideation sessions with 15-20 internal team members trying to generate ideas for their iconic brands. This approach had limitations:

  1. The same group of people repeatedly ideating on the same brands
  2. Difficulty generating truly novel ideas
  3. Time-consuming and resource-intensive processes

With ZS’s Atlas tool, Hershey now leverages thousands of organic consumer data points. The AI connects dots across consumer behaviors, motivations, preferences, and cultural relevancy to generate more compelling ideas. Importantly, the AI also explains how it arrived at each idea, providing transparency and credibility to the process.

Erica emphasized that this approach delivers both effectiveness and efficiency, stating they have “almost not gone back to traditional ideation” and “can’t really envision” returning to their previous methods.

Product Innovation Applications

Hershey has used Atlas for product innovation in two principal ways:

  1. Innovation within existing forms: Directing Atlas to focus on specific products like Reese’s Peanut Butter Cups or Hershey Kisses to generate new ideas within those established formats.
  2. New forms and pack types: Exploring how to deliver different experiences using iconic ingredients or brand equities. For example, they asked Atlas to reimagine s’mores experiences beyond traditional formats and to explore new ways to deliver Reese’s perfect combination of chocolate and peanut butter beyond the cup format.

The tool also helps with product details like ingredients and claims, allowing Hershey to set parameters (avoiding allergens or expensive ingredients) while generating ideas that align with manufacturing capabilities and brand equities.

Non-Product Innovation

Beyond product development, Hershey has leveraged Atlas for:

  1. Partnership identification: Finding co-branded partnership opportunities, such as the successful Hershey’s Cinnamon Toast Crunch Kisses. Atlas can identify potential partners that align with specific benefit territories where Hershey might lack equity.
  2. New brand development: Exploring white space opportunities in chocolate candy and developing comprehensive brand identities. Atlas delivers detailed brand concepts including logos, mood boards, packaging designs, and visual elements that contribute to the overall proposition.

Erica noted that Atlas creates “really beautiful renders” of finished products that help sell ideas internally, as “people get excited when you show them fully baked ideas.”

Category Entry and Market Intelligence

Hershey has incorporated Atlas into their M&A due diligence process. When evaluating potential acquisitions like Sour Strips, they use Atlas to quickly understand consumer perceptions of target brands and their competitive positioning. This is particularly valuable for smaller companies where traditional research might struggle to find sufficient sample sizes.

They also use Atlas as a “get quick smart tool” to understand interesting marketplace developments, including international trends that might come to the US. Erica shared how they used Atlas to analyze Mr. Beast Feast Bowls when they entered the market, gaining deeper insights than traditional survey research could provide.

Data Sources and Methodology

The Atlas tool leverages two key data sources: product details (nutrition labels, claims, logos, packaging) and consumer feedback from various platforms (Reddit, Amazon, Walmart.com, and other e-tailers and social media). This data is then integrated with Hershey’s proprietary consumer insights, including demand spaces work and palette studies.

KEY TAKEAWAYS

  1. AI-powered innovation delivers superior results: By analyzing thousands of consumer data points, AI can generate more compelling, consumer-grounded innovation concepts than traditional ideation methods, while providing transparency about how ideas were developed.
  2. Efficiency and effectiveness gains are substantial: The AI approach is faster, requires less internal effort, and produces higher-quality outputs that perform better in testing than traditional methods.
  3. Applications extend beyond product development: AI-driven innovation tools can support partnerships, new brand development, M&A due diligence, and competitive intelligence, making them versatile assets for innovation teams.

Delivery on Event Focus:
Aligning Innovation with Business Strategy

This session directly addresses the focus of aligning innovation with business strategy by demonstrating how Hershey has integrated AI-powered innovation into their core business processes. The approach ensures innovations are grounded in consumer insights and market realities rather than internal assumptions. By incorporating parameters related to manufacturing capabilities and brand equities, the system produces innovations that are both strategically aligned and practically feasible.

Alignment with Event Theme:
Harvesting Innovation & Sowing the Seeds of Future Growth

The session exemplifies the theme of “harvesting innovation and sowing the seeds of future growth” by showing how Hershey has harvested consumer data to fuel their innovation pipeline. The AI approach allows them to efficiently explore white spaces and identify growth opportunities across product innovation, partnerships, and new brand development. By transforming their innovation process, Hershey is sowing seeds for sustainable future growth through a more effective and scalable approach.

Action Steps for Innovation Experts and Corporate Changemakers

  1. Evaluate current ideation processes against AI alternatives, considering both effectiveness (quality of outputs) and efficiency (time and resources required).
  2. Pilot AI-driven innovation approaches in specific areas like product innovation or partnership identification to demonstrate value before broader implementation.
  3. Integrate consumer data sources to ensure AI tools have access to rich, diverse inputs that reflect actual consumer preferences and behaviors.
  4. Set clear parameters for AI innovation tools that reflect manufacturing capabilities, brand equities, and strategic priorities to ensure practical, aligned outputs.
  5. Use AI-generated visualizations to build internal support for innovation concepts, leveraging the power of seeing “finished” products early in the development process.
  6. Incorporate AI tools into M&A due diligence and competitive intelligence processes to gain deeper insights into market opportunities and threats.