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Eo dvan rensburg keynote

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EO Nerve 2012 Keynote

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Eo dvan rensburg keynote

  1. 1. Strategic Brand VenturingEntrepreneurs’ Organization - NERVE 2012 “Dream – Lead - Challenge” April 20, 2012
  2. 2. U.S. Beverage Industry 2001 - 2009 Retail $ Sales # of TMs Retail Sales > $1B $85 33 $350 - $1B 40 $27 $5 - $350 mm 391 $22 < $5 mm 2,899 $1 Total Industry 3,363 $ 135 +19% +30% Net 12 New 1/3 of growth in Over 3500 TMs categories that brands (20% of Entered the barely existed total) driving ranks 5 years ago 50% of theof $1B Brands growth 2
  3. 3. Industry Benefit Structure is Evolving Non-Traditional Competitors Social & Environmental N E Categories Blurring X T ? Functional & Lifestyle Brands Health & WellnessSource: Beverage Marketing Corporation 3
  4. 4. Entrepreneurs are Driving Disruption 1st New Age Drink 1st 1st Protein 1st RTD Enhanced Drink Coffee Water 1st Energy 1st Soy Drink Drink 1st Energy Shot 4
  5. 5. Incubation Takes Time Avg. DisruptiveRevenue ($MM) Avg.Successful $75 $20 Proof of Concept 4-10 Years 1 2 3 4 5 6 7 8 9 10 5
  6. 6. Risk of Failure is High… Phase 1 Phase 2 Phase 3 Phase 4 Experiment- Proof of Pain of Scale to ation Concept Growth WinRetail Revenue $0 - $20 $20 - 50 $50 - 150 $150 - 350Success Rates 3% 16% 17% 30% …And Need New Capabilities Flexible Art of Entrepreneurial Route to Emerging Sales & Market Marketing Activation Influencer Flexible Incentives & Performance Customer Supply & Management Relations OTC 6
  7. 7. Innovators are Sourcing Growth from “Outside”Source: Mason & Rohner, 2002The venture imperative 7
  8. 8. Need Distinct Unit to Pick & Build Future Winners• Small team, tight resources• Action bias, quick to respond• Ground level approach to marketing• Long time horizon• Distribution agnosticAdopt entrepreneurial models while leveraging scale when appropriate 8
  9. 9. Two Core Strategies Identify and Nurture Brands with $1 Billion Potential INCUBATE INVEST Importation / Minority Investment and/or Innovation Acquisition“SWEETSPOTS” Replicate Entrepreneurial Model Retain Entrepreneurial Model Capabilities 9
  10. 10. Dedicated, Loose-Tight AutonomousBusiness Unit CEO President North America President President President Sparkling Still VEB 10
  11. 11. Revenue ($MM) Respect & Leverage the Curve Commit for Global Brand Portfolio Leverage Distribution, Sales, Supply Chain, and Brand knowledge Invest at “Proof of Concept” Time VEB Focus Traditional VC Focus 11 Classified - Internal use
  12. 12. Investment Example: Honest Tea Innovative Deal Structure Opportunity • Minority investment with call option • Founder retains • KO Marketing & equity & GM Insights, Supply Chain, Selling & DistributionThought leader in Sustainability 12
  13. 13. Incubation Example: illy issimoOpportunity Innovation• Category $2.2B, up 10% • Seed in influencer cities• Starbucks unchallenged • Hybrid RTM• Illy brand premium positioned • Brand missionary (intrapreneur)• Opportunity to Capture Share • Feet-on-the-street • High risk/reward incentive programs Replicate Entrepreneurial Model; Think Big, Start Small, Prove, Expand Incubator: Equity: Phase 2: 13
  14. 14. Venturing Scorecard: Capture Tangibles & Intangibles Source: Citi Growth & Innovation Incremental Equity Value Strategic Revenue Investments Created Value and Valued Profit Created 2 Cost Savings% of Company Growth Business value • External perception of vs. investment innovation capabilities# of scaled brands • New channels/cust./modelsRevenue Growth • Expanded relationships • International expansion 14
  15. 15. Thank You ! Q&A 16

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