Behind Fernando Machado’s marketing approach at plant-based brand NotCo

After two years as chief marketing officer of Activision Blizzard, Fernando Machado has returned to the food marketing world. The chief marketing officer of plant-based food company NotCo is about four months into the job—and he’s been busy launching new campaigns, driving partnerships, and adjusting to the business realities of working at a startup. While NotCo doesn’t have the budgets or brand recognition of Unilever and Burger King—where Machado also previously worked—he is looking to combine his food prowess with the digital-first lessons around data-powered performance marketing he learned at Activision Blizzard. “At Unilever, I would know at any given time how much I was selling to retailers but not how much consumers were buying from those retailers,” Machado said. “Then at Burger King, I knew how much consumers were buying but didn’t know who the consumers were. At Activision Blizzard, due to the nature of the business, we had much more data around the user. With that, it was easier to target, and calculate the lifetime value of consumers, among other things.” Ad Age Small Agency Awards See all of the 2023 winners Click here NotCo enjoys the backing of packaged food giant Kraft Heinz, which inked a joint venture with the company in February 2022 and created the Kraft Heinz Not Company, which is headquartered in Chicago (though Machado lives in Miami). Already, NotCo has been involved in the release of Kraft-branded vegan cheese slices and vegan mayonnaise in the U.S. NotCo also recently worked with Philadelphia Cream Cheese to make a vegan version of the schmear. View this post on Instagram A post shared by The Not Company US 🇺🇸 (@notcous) NotCo also won attention with “We didn’t write this campaign,” which won a Gold Lion in Print & Publishing and a Silver Lion in Outdoor this year at Cannes. The campaign, from MRM Worldwide, used big dairy companies’ legal language in lawsuits against its NotMilk to promote the brand. Machado has called on previous experiences in his new role. For instance, he was familiar with the Latin American market (NotCo was founded in Chile) from overseeing brands including Knorr as a VP of savory at Unilever. At Burger King, he was known for edgier marketing, including “Moldy Whopper,” an award-winning campaign that touted the removal of preservatives. He plans to bring similar thinking to NotCo. The company’s recent hires also include former Chobani marketer Meredith Madden, who joined NotCo earlier this year as U.S. general manager. Still, NotCo faces a stiff challenge in getting mainstream consumers to choose vegan options. Machado says he is well aware of the perceptions that vegan food has—off textures, weird tastes, and a higher price point—which are barriers to landing new customers, even when coming from chains they might trust. Both Burger King and McDonald’s have fielded vegan burger options— the Impossible Whopper and the McPlant, which was made with Beyond Meat. While the vegan Whopper is still available, McDonald’s pulled the McPlant after a poor test run in 2022. Dunkin’ also introduced a Beyond Sausage breakfast sandwich nationwide in 2019, but later significantly scaled back its availability. Starbucks still offers its breakfast sandwich made with Impossible sausage. Beyond Meat’s first-quarter revenue declined by 15.7% and that company cited “continued softness in demand in the plant-based meat category.” Look back: Impossible Foods hits back at media report with ad But the plant-based food sector has been growing, partially from improvements in options, but also from an increase in consumers wanting to eat healthier or more environmentally conscious. The global plant-based food market was valued at $44.5 billion in 2022 and is expected to reach $50.4 billion in 2023, according to The Business Research Company. In the U.S., the plant-based food market was worth $8 billion in 2022 with dollar sales up 7% from 2021 and units down 3%, mirroring total food and beverage and animal-based food, according to the Good Food Institute, a nonprofit that promotes plant-based alternatives. Plant-based eggs, seafood, creamers and protein powders still saw unit sales growth in 2022 despite price hikes. Ad Age recently caught up with Machado to learn more about NotCo’s marketing approach in the niche category. He explained why there are similarities to electric vehicle marketing and how NotCo is using AI. This interview has been slightly edited and condensed for clarity. What are NotCo’s marketing mix priorities? Geographies are a big one, because the brand has different footprints across countries where we have a presence. We’re more mature in Latin America, like Brazil, Argentina, Chile, where the company was founded. In the U.S. we are still trying to build awareness and our distribution, so massive media like TV is too expensive. We have our owned channels and paid media in digital and shopper marketing because it’s more effective. We’re also building the brand through partnerships. We have a plant-based custard and shake at Shake Shack that is NotCo branded. We have partnerships with Joe’s Coffee in the U.S., Starbucks in Mexico, Domino’s in Latin America, and many more. And of course the joint venture with Kraft Heinz where we are launching plant-based versions of their products. View this post on Instagram A post shared by Shake Shack (@shakeshack) Marketers may remember your Moldy Whopper to promote Burger King’s lack of preservatives. Do you plan on doing similar stunt-based marketing for NotCo? You know, each brand has a different vibe, but no matter what the vibe is, it’s important to stand out. All the marketing that I’m proud of and saw the best results, they stood out. And many of them didn’t have a big budget, like the Dove beauty sketches, or the Popeyes chicken sandwich tweet, or the Whopper Detour. They had a high ROI, but they didn’t need deep pockets. So in a startup if you can crack that magic, the growth will be disproportional. I think people call it a stunt because they see it as “everyone talked about it and then moved on” but that’s what we do with everything. I think the trick is to get noticed, to have people talk and understand the message, but on a budget. How has the Kraft Heinz venture changed things? So far the relationship has been amazing. We’re very collaborative on products. I think it’s a beautiful opportunity to democratize plant-based products. Having a brand whose products people trust, at a great price point and that tastes great, is a big unlock. View this post on Instagram A post shared by The Not Company US 🇺🇸 (@notcous) What agencies are you working with? We are working with Gut on most of our projects. They’re the AOR for the joint venture with Kraft Heinz and have done work in the U.S. and Brazil. We don’t leverage any internal agencies either at Kraft Heinz or NotCo. Earlier you talked about geographies, but what other data is helping you decide where to push products that will resonate? Our partnerships with key retailers are really critical in defining this. I think plant-based will be big everywhere, but sure there are geographic regions where they do better. But that was also true when I helped launch the Impossible Whopper at Burger King—there was a big delta between where we sold the most and the least, so that knowledge is really relevant for NotCo. Kraft Heinz has some data around products, but having a conversation with large retailers and understanding what is selling or what market tests did well helps us to focus. We’re also fragmented in terms of retailers, because it varies depending on the product they’re selling. What are your views on AI and how it impacts marketing? I see AI as a tool, something that can augment our human ability to do something. I don’t see it as a replacement for creativity or humans. At NotCo, we use AI to formulate our products through our technology, Giuseppe, which breaks down animal-based foods to find plant-based alternatives. But it’s not just the AI, you need chefs and the research and development team to develop the product. We did use a bit of AI for things like radio ads, or the aging animal campaign visuals, but it was more to make a point. We use AI to make our products, so it wasn’t a gratuitous use of AI. It helped with our brand message. I think AI can help you explore different ways to create assets or explore different ways into design. But again, I don’t think you just use Midjourney and all your design problems are solved. You need a designer to make it more on brand, or tweak it. More news: AI jobs in marketing—the future of the new titles What challenges remain in getting plant-based-curious customers to buy in the grocery aisle? There are a couple of barriers. First, I think people still think that plant-based food can't taste as good. Maybe they had a poor experience in the past with it. Price is another. Most plant-based consumers are flexitarian, like myself, and eat animal protein, but have increased plant-based options in their diet for environmental reasons or health reasons. But in the scenario of a recession or unemployment, and a consumer has to cut expenses, that can impact how much they consume if the animal protein is cheaper. Our focus is to keep evolving plant-based foods. The checked box isn’t just to mimic the animal equivalent, but to also surpass it on nutrition. I do think plant-based options will become more competitive in terms of cost. It’s similar to electric vehicles—Tesla doesn’t talk about how it’s more environmentally sustainable or that it’s electric. Customers just know that they have a better experience with their car that just happens to be electric. The jackpot for plant-based food would be that it tastes better, has better texture, is more nutritious, is cheaper, and just happens to be made from plants. AI marketing blog How brands are using ChatGPT, DALL-E 2 and other tools Read more here

Behind Fernando Machado’s marketing approach at plant-based brand NotCo

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