Cherie lunghi nescafe

KENCO / BRAND SPOTLIGHT This article appeared in Contagious Magazine issue 50

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Brand Spotlight / Kenco 38 / 39Brand Spotlight / Kenco

Kenco’s revitalisation starts in the murder capital of the world, where the instant coffee brand set out to reignite its ethical credentials. Its Coffee vs Gangs initiative goes beyond marketing, changing the lives of the people who grow Kenco’s products. The programme not only gives

Kenco a purposeful story to tell, but has also dramatically improved the brand’s revenues

By Emily Hare

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Brand Spotlight / Kenco 40 / 41

W hen marketers talk about taking risks, they are usually referring to something relatively mundane, like a shift in strategy or an unusual media spend. When Kenco talks about taking risks, however, it involves danger, significant investment and circumstances well out of the brand’s control. The brand’s Coffee vs Gangs project was developed with agency J. Walter Thompson, London, in 2014 and took place in Honduras, where some of its beans are grown. Helping individuals escape a life of crime placed the brand in opposition to violent gangs who would not hesitate to destroy the farms that Kenco was working so hard to support.

Such was its belief in the programme, and the capacity to build a UK advertising campaign around it, that Kenco took a second risk, to focus the entirety of its marketing efforts on Coffee vs Gangs. As Neil Godber, head of planning at the agency, said: ‘The risks and threats that this brand and the people involved faced were high. The number of variables at play was incredible... This was all in, or nothing.’

The daily grind Kenco has always been a challenger in the instant coffee market, competing with category leader Nescafé, which dominates not only share of voice, but also outspends Kenco in terms of its advertising and undercuts its rival through price promotions. According to Mintel, Nestlé makes up 40% of the UK advertising spend in the instant coffee market, which totalled £26m($32m) in 2015, with its f lagship brand Nescafé outspending Kenco by around three to one.

Marketing budgets in the category are not typically spent on emotive campaigns. Instead, the work tends to focus on the smooth, rich, refined taste of coffee. Kenco’s advertising and its actions have long set the brand apart, pushing the needle across topics such as equality and sustainability. Paul Kirkley, global partner at Kenco’s agency, said: ‘Ethically viewed brands and sustainably produced coffee did have a marked impact on how people viewed and pur- chased the brand, so we leant on that as our point of difference.’

Purposeful measures Kenco established itself as a leader in the ethical space through its early commercials promoting gender and racial equality, by cutting back on packaging and establishing partnerships with bodies such as the Rainforest Alliance. In addition to this, it communicated these actions in a way that resonated with customers, at a time when movements such as Fair Trade were gaining momentum in the UK.

But being a first mover comes with its costs. The rest of the industry was quick to catch up with the initiatives Kenco introduced and so the brand’s original point of difference no longer provided the advantage it once had. ‘When you set the norm and educate consumers, the rest of the market follows, so the competitive difference over time disappears,’ says Martin Andreasen, marketing director at Kenco parent company Jacobs Douwe Egberts. But Kenco continued to push things forward, with initiatives such as introducing coffee that was 100% sustainably sourced.

Another threat to Kenco’s instant coffee stems from coffee drinkers in the UK becoming increas- ingly sophisticated in their tastes. Chain coffee shops and independent rivals are common on the high street and nearly three in 10 UK households also own a pod-based coffee maker, such as Nespresso or Tassimo, according to Mintel. Although Kenco does supply branded pods for Tassimo machines, changing drinking habits are an ongoing concern in a highly competitive mar- ketplace. Both the state of the coffee market and

Kenco’s position in that marketplace meant the brand had to take meaningful action.

Bold briefing By 2013, Kenco’s hard-won price premium compared with rivals and its long-standing ethical point of difference was in jeopardy. The brand challenged its agencies to reassert its ethical credentials. Kenco wanted the work to have a substantial impact and brought a level of ambition to the project that meant a standard campaign would not answer the brief. ‘They didn’t want to produce run-of-the-mill, generic, mainstream coffee advertising; they wanted to produce com- munications that were dramatically impactful, both in the category and beyond,’ said Kirkley.

For Godber, key to the brief was to ‘do some- thing that we can talk about’ as opposed to ‘talking about Kenco’s ethical message’. That led to a thought process that considered where Kenco could make the biggest, most dramatic difference in a way that was fundamentally linked to the brand and product.

Coffee has a huge effect on the economies of many of the countries from which Kenco sources its beans. For example, many of the farms in Honduras are smallholdings, run by around 110,000 individual coffee farmers. In a country with a population of around 8 million, Andreasen says it is estimated that the farms ‘create the livelihoods of around 1 million people’ when employees, their families and related industries are taken into account.

If Coffee vs Gangs were to go viral in Honduras, some gangs are not going to hesitate – they would take out the farm Martin Andreasen, Jacobs Douwe Egberts

Brand Spotlight / Kenco 42 / 43

It feels like a test case for what brands can be capable of in a wider societal way Neil Godber

Honduras’ other major industry is drug traffick- ing, with gang crime rife throughout the country. As Andreasen puts it: ‘The gangs outnumber the police and authorities: they can’t fight those prob- lems alone. We’ve got the responsibility to step in and help by making sure that coffee remains an honourable, honest job that you can actually make a good living out of.’

By promoting and supporting an alternative lifestyle to the initially enticing one offered by the gangs, Kenco could not only ensure the continued quality of its supply, but also tap into an ethical stance that had the potential to revitalise the brand and generate a wealth of compelling emotional content. Andreasen adds: ‘One of the things we wanted to achieve from a marketing standpoint was to create something that would be uniquely recognisable for Kenco, attributable to the brand and unmissable.’

Ganging up Coffee vs Gangs is an educational and social programme that provides disadvantaged Hondurans at risk of being recruited by gangs with everything that they need in terms of knowledge and support to launch and run their own coffee farm.

The programme is now in its third year, with 39 people graduating so far and the first beans produced by the farms are now on sale in the UK

1988 1991 2008

in Coffee vs Gangs-branded paper packaging. But the process began long before the first seed was planted. Eighteen months to two years before the project launched, plans were being put into place to ensure that everyone taking part – both partic- ipants and Kenco employees – were safe and that everything ran smoothly. Key to that was working with Latin American NGO Fundes, which helped with the production, selecting individuals who would benefit most from the programme and also had the most emotional stories to tell, such as the aspiring coffee farmer whose father had been killed by a gang.

The brand also took extreme care regarding responsibilities to its staff, shareholders and the participants, ensuring that people weren’t endangered or exploited. For example, the content created as part of the campaign was geofenced from Honduras, so gangs and participants could not f ind or view the content online.

The programme was also known locally as The Kenco Project rather than by its Coffee vs Gangs moniker. Andreasen says: ‘We’ve given the participants the context, so they know what they’re part of; they know that they’re being filmed, but we’re not giving them access, because if it were to go viral in Honduras, some gangs are not going to hesitate – they would take out the farm.’

Brand jeopardy Kirkley put the success in bringing the project to fruition down to the people involved on both the agency and the brand side. ‘They genuinely felt, like we did, that it is a really valiant and noble thing to do and if it works, it’ll be amazing,’ he said. The team had to overcome many obstacles to get the programme off the ground, before any content or marketing could be created to share it with the wider world.

Kenco Instant launches, distinguishing itself by using the same beans as in its roast and ground coffee

Launch of Kenco’s long-running campaign featuring actress Cherie Lunghi playing Christina, the radical CEO of the company, showing the brand’s stance on gender equality

Partnership with Rainforest Alliance begins, demonstrating the importance that Kenco places in growing and sourcing its products

1922 A co-operative of Kenyan coffee farmers opened the Kenya Coffee Company’s first shop in Sloane Square, London

Brand Spotlight / Kenco 44 / 45

Over the long planning process, Kirkley believed that having the right people in the room was key to making sure that the project launched and wasn’t diluted. ‘When you go through that process with that group of people, you mould into one team, there’s no client and no agency, it’s just a group of people with exactly the same ambition and a character that isn’t going to be put off by anything that you hit on the way.’

Head of planning Godber f lagged up just one of the ever-present risks: Kenco could have been faced with a position where there weren’t any success stories to talk about. ‘I think it’s very brave to take the decision to try to do this for a certain number of people and the effort in trying is worth the reward. It’s often easier for companies to think, “It feels like there are too many risks involved, we’d better stick to what we do” instead of trying to embrace the thing 100%, which I would argue the client did. Talk about having skin in the game.’

The participants in the programme could poten- tially throw plans off course. Andreasen says: ‘We have to be realistic, not all of them are going to make it, necessarily.’ But for the participants who complete the programme and go on to establish their own farms, the benefits extend not only to their families, but also to a wider group of people thanks to the jobs they create.

Andreasen describes them as ‘catapults for the local society’. For example, he talks about one farmer who, alongside growing her own beans, also grows plants that she sells on to other coffee farmers to rejuvenate their crops, employing 17 people from her local community in the process.

Layers of content Early in the process, Kenco decided that it would use the process of establishing and running the programme to generate content and as the spark for creative ideas, something Godber described as ‘business strategy as brand strategy’. The campaign dramatises that journey through video content and a stunning TV spot that uses the motif of gangland tattooing to tell the story of a young boy escaping from the ever-present threat of gangs in his daily life by learning how to grow coffee. The star of the commercial is street cast, and many of the other people featured in the broader content are participants from the Coffee vs Gangs programme.

‘It was the genesis of the scheme in the first place which required a creative idea on top in order to capture people’s attention and encapsulate the drama,’ added Godber. By launching through TV, the brand was able to create the big, emotive splash that it had hoped for, with the shorter video content carefully targeted at an engaged audience through social media, such as in pre-rolls and Facebook films.

The social content was made up of interviews with participants introducing their stories and sharing the fears they had for their lives before the programme. Created by London-based PHD, and production company The Moment, the films were seeded on sites such as Facebook and YouTube, with releases at different stages of the project to show the interview process and the education, right through to the graduation ceremony. Sarah Nugent, business director at PHD, describes the pieces as gritty, saying: ‘There was no shine on it, these are real people sharing the ups and the downs. It wasn’t glossy or polished.’

These two strands offered different ways into the project, but, as Nugent says: ‘It’s still us telling the story, and it’s really important that we believe it’s the right thing to do and we’re doing it properly. We have to take somebody else – who could possibly tear us apart – on the journey with us.’

Radical transparency Another aspect in the content approach, therefore, was a partnership with UK newspaper The Daily Telegraph, selected for its history in reporting conflicts. For PHD, this independent take was a vital aspect of the story. Nugent adds: ‘It was

really important for the integrity of the project that it was reported on like a piece of conf lict journalism.’ The work lives on a Coffee vs. Gangs hub on The Daily Telegraph ’s site, illustrated with photography and statistics.

This meant that Kenco had to come to terms with having no editorial control over what the journalists wrote. As Andreasen says: ‘We made a conscious choice, right up front, that the only way we could do this was to be as transparent as we could possibly be. We are opening up and showing real lives, real people, real actions – and if you do that and you try to make it up, you’re going to fail.’

Kenco didn’t want us to produce run-of-the- mill, generic advertising; they wanted to produce communications that were dramatically impactful, both in the category and beyond Paul Kirkley

2014 20172009 Eco Refill packaging introduced, reducing the weight of packs by 97% compared with glass jars, cutting waste and transport costs

Coffee vs Gangs programme launches in Honduras with accompanying content and creative running on TV and online in the UK

Beans grown on the farms launched through the Coffee vs Gangs programme become available in the UK

04 /05Brand Spotlight / Kenco

($26.7m) Additional sales revenues during the campaign period (Aug 2014-Dec 2015),

equivalent to 13% of all Kenco sales

Kilos of additional coffee sold attributed to Coffee vs Gangs

($5.04) Revenue return on investment per

pound spent

Return on investment for the campaign’s online

activity (£4.08), 13 times the average FMCG online

ROI of 30p ($0.38).

£21.7m 1.01m £4.03 13x

Campaign sales brought in by TV. YouTube, Facebook

and video on demand accounted for 30%

People who have completed the Coffee vs Gangs programme in

Honduras to date

Perception of Kenco as a brand with integrity,

up from 14%

($32.7m) Annual ad spend by the UK instant

coffee market (2015)

70% 3935%£26m

Kenco in numbers

Brand Spotlight

We made a concious choice that the only way we could do this was to be as transparent as we could possibly be Martin Andreasen, Jacobs Douwe Egberts

Learning on the fly Andreasen explains that the brand refined its approach to the content over time by asking, ‘How do you get the initial messaging right, how do you get people to keep watching and how do you blend interesting stories within the advertising so that the brand actually gets that boost?’

Nugent says: ‘We had a hypothesis about which bits of the story would resonate better with certain people, and then we’d take them on a journey or story based on that.’ For example, hard-hitting stats and pieces that opened with gritty shots of Honduras kept older viewers gripped. There were surprises along the way, but by learning on the f ly, Kenco was able to adapt its strategy to ensure that the digital spend, which made up 30% of the total budget, was used effectively. Nugent mentions just how out of the ordinary this was compared with Kenco’s usual social marketing and that of the category in general. ‘Telling a much longer story though digital was a massive step forward,’ she says.

Kenco experimented with how to use Facebook and YouTube most effectively, which it found to be best suited to very short mobile- optimised videos. Being prepared to adapt was key to this evolution. Andreasen explains: ‘You send out tests, you look at what performs, then you scale up. Consumers are good at giving you the feedback on what they are interested in or not and whether it works, and you optimise accordingly.’

This approach certainly seems to have proved effective. The TV spot scored in the top 1% of Kantar Millward Brown’s LINK test, which marketers use to evaluate their ad compared with others. It went on to be responsible for 70% of the campaign’s sales, amounting to more than 1 million kilos of coffee sold in total because of the campaign. The social elements alone brought in a lifetime revenue ROI of £4.08 ($5.12) for every £1 ($1.25) spent – dramatically exceeding the average online ROI of a typical FMCG campaign of 30p ($0.38).

Influence and impact In addition to the return on investment, Godber asked: ‘Did it raise the bar in terms of what advertisers are doing? You’d have to argue, yes it does. People genuinely care about the companies behind the brands that they buy into. They care about the actions that brands undertake on their behalf; they care about brands being a citizen and paying back. It feels like a test case for what brands can be capable of in a wider societal way.’

This point of view was backed up by Ipsos ASI research, which showed that consumers reconsidered their reasons for choosing coffee after they had seen the campaign, with ethical sourcing/trading ranking 8% higher and social contribution increasing by 5%.

But, beyond Kenco’s reassertion of its authen- tic, purpose-led approach and commitment to

ensuring that its supply chain remains true to its co-operative roots, the project is most impres- sive for its business impact. Most prominently, this includes £21.7m ($27.2m) of additional revenue that is directly attributable to the Coffee vs Gangs campaign.

The threats that circle the instant coffee market are still prevalent, with the UK’s instant coffee market revenue dropping by 1.9% between 2014 and 2015. But Kenco has proved that taking risks as a business can not only lead to outstanding creative work, engagement and awareness, but also impressive sales. In Coffee vs Gangs it has developed a successful platform that should give the brand license to reignite its ethical values going forward. In fact, the biggest risk is often not taking one.

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