Food & Beverage

Open Innovation: How Supply Chain’s New ‘Secret Sauce’ is Shaking up the Drinks Industry

By Caylee Steytler in London

Open Innovation: How Supply Chain’s New ‘Secret Sauce’ is Shaking up the Drinks Industry

Didier Brunet recently left Bacardi Martini’s Geneva headquarters after nearly five years in post as the company’s first Open Innovation Director.

Interviewee: Didier Brunet - Open Innovation Director, Bacardi Martini Group

After working for the Bacardi Martini Group, the largest privately-held spirits company in the world, in a global manufacturing position for six years, Brunet was tasked with emulating the efforts of more cutting-edge high tech companies, and drafting innovation and R&D on to the Bacardi agenda.

 “I was appointed Open Innovation Director for the group in 2011, and I started with a blank sheet of paper,” he recalls. “That was both exciting and challenging at the same time. Companies like Unilever and Procter & Gamble had launched open innovation programmes at least 10 years earlier, with successful results, and that was my roadmap. I looked at what the big guys had been doing in the last decade.”

The term Open Innovation was first coined by Henry Chesbrough in 2003 and refers to companies making use of both inflows and outflows of knowledge to improve internal innovation and expand their markets. The practice itself dates back to the 1960s, but remained unnamed until Chesbrough theorized a new way of innovating after years of observation in the Silicon Valley. For Brunet, who had graduated with a Masters’ degree in engineering and had been working in operations and manufacturing for 15 years, it meant generating breakthroughs for a drinks business by leveraging internal R&D with external capabilities.

He set up four different initiatives, which he says are now well-known in the open innovation world: working with universities, start-ups, consumers and peer companies, all in the search for new ideas and radical product initiatives. To tap into consumers, Brunet launched an ‘inventor’s corner’ section on the company’s corporate website, and invited customers to share their brainwaves.

“Four years on, I look back to see what went well, and from my experience by far the most successful and promising partnerships were the ones that we forged with peer companies,” he says. “These are companies the same size as us but in different fields. I would have anticipated maybe the start-ups, or the crowd sourcing ideas from consumers, would have borne the best results, but there you have a question about the maturity of the ideas put forward, which often still need a lot of research.”

He’s not in a position to discuss the partnerships that Bacardi has entered into, but was able to discuss two recent examples of innovative partnerships in the food and beverages industry that have come about from similar initiatives: Lipton Ice Tea, which has grown via a joint venture between PepsiCo and Lipton, a Unilever brand, signed in 1991; and, more recently, the BeerTender. The latter is a home keg-tapping system manufactured by Krups, the coffee machine maker, in a joint venture with brewer Heineken.

“Open innovation doesn’t only work for high tech companies,” says Brunet, “It also works really well in fast-moving consumer goods, for companies like ours. These types of partnerships are really promising. Everything is shared, right from the idea through to the delivery, so it’s really a breakthrough. When you go into partnership with a company that has potentially nothing in common with your business, and you deliver a super breakthrough through innovation, it’s a real shift in the business model. That’s very exciting to be involved with.”

"When you go into partnership with a company that has potentially nothing in common with your business, and you deliver a super breakthrough through innovation, it’s a real shift in the business model. That’s very exciting to be involved with.”

He says there are two important aspects to the role of an Open Innovation Director: discovery, and delivery. Both require an innate ability to identify and work well with new partners, and to get the best out of collaborations.

“Discovery is all about searching for new breakthrough ideas,” says Brunet, “and that can be done internally, because open innovation is not always necessarily about going outside. It’s also about connecting internal capabilities with external capabilities, and I would say about three quarters of our big ideas in the last five years came from internal sources.”


He adds: “The delivery part is probably the other way around, because you need to move fast and you often need to go and tap some external capabilities to make things happen. An Open Innovation Director needs to be able to search for partners, to identify them, to select them, and to build strong relationships with them.”

He says the role also requires a deep knowledge of the legal backdrop to the business, including intellectual property and contractual obligations. “The three best friends of an open innovation director are the legal guy, the M&A guy, and the internal R&D guy,” he says.

“For B2C businesses, I would say that to be successful in open innovation it’s vital that the position reports into marketing, rather than into technology. The risk, otherwise, is that you have the discovery role, and you search for things that are of no interest to marketing, even if they may be very neat from a technological point of view.”


Before Bacardi, Brunet worked at Sidel, a French packaging business, where he managed a team of 18, including 12 senior project managers in charge of designing and supporting the sales of bottling lines to the beverage industry. Bacardi was a client, and he moved to Geneva to take up the role of Manager Technical Coordination, tasked with looking after 12 plants in Europe and Asia, and leading a network of engineering directors across manufacturing sites.


Now he says he is at a point of transition in his career, but is certain he wants to stay in open innovation. He has learnt a lot about how such roles can be most effective: “For B2C businesses, I would say that to be successful in open innovation it’s vital that the position reports into marketing, rather than into technology. The risk, otherwise, is that you have the discovery role, and you search for things that are of no interest to marketing, even if they may be very neat from a technological point of view.”

For now, he says the open innovation sector is very much in its infancy. “I’m not sure how the role is going to develop,” says Brunet. “It’s really only just started. We have heard about open innovation for years, but it’s still quite fresh, and only the big guys have open innovation departments. From my experience, I see it moving towards being about partnerships between peer companies, rather than other channels. The good news is that one of the big projects that we have in Bacardi, which involves a partner, is being supported at CEO level, and that’s the kind of sponsorship we love to have. When there is business change involved, and promising returns on investment, it triggers the attentions at the highest levels of the organisation, and that is thrilling.”


He concludes: “The exciting thing is working on breakthroughs. When you are in these well-established companies, which are a little bit conservative, and you come up with an idea that has the real potential to shift the business model, it’s really something special.”


No wonder he wants to do more of it.

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About the author

Caylee Steytler specialises in recruiting exclusively across Procurement and Supply Chain. Working solely with clients and candidates within the FMCG sector.

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