PepsiCo's Patrick Kalotis is not known as 'Mr Breakfast' for nothing

By Loulla-Mae Eleftheriou-Smith, marketingmagazine.co.uk, Thursday, 08 December 2011 12:00AM

Patrick Kalotis, group marketing director, PepsiCo, is serious about his healthy brands portfolio.

Patrick Kalotis, group marketing director, PepsiCo

Patrick Kalotis, group marketing director, PepsiCo

Whether it is down to his Hellenic heritage, or a love of the products he works on, it's clear from the start of Marketing's interview with Patrick Kalotis that he is a passionate marketer.

Indeed, the half-Greek, half-Irish marketing director for PepsiCo's range of healthy brands, including Tropicana and Quaker, is a self-styled 'Mr Breakfast'.

'It would be difficult for me to work on a product I don't associate with,' he says. 'I've got to the point that if I don't have a glass of Tropicana and a bowl of porridge in the morning, I think: "Oh I'm so hungry."'

Kalotis, who grew up in Greece and moved to the UK when he was 18, has the slightest of Mediterranean accents, betrayed in the way he pronounces the vowel 'o' in 'so', when emphasising the depth of his hunger.

Strategy shift

Kalotis took on his current role in May 2010 and his enthusiasm for his brands is evident as he talks about the reasons for shifting Tropicana's ad strategy this summer. The idea behind the brand's ad positioning - to focus on the provenance of the juice and the 'life story' of the oranges from which it is made - stemmed from a trip to the orange groves of Brazil.

PepsiCo has its own groves, where the orange trees are planted and then cultivated for six years, until they are ready for the fruit to be harvested. Kalotis uses evocative language to describe his experience there, likening the strong smell of the fresh oranges to 'walking in a perfumery'. He learned how the farmers work, and has fed all this into the brand's latest marketing, from ads to sampling activity.

'Our ads in July were all about the passion and the craftsmanship that goes into our orange juice, and that reinforces the quality and the taste,' explains Kalotis.

This 'Mr Breakfast' moniker comes from his responsibility for two of the UK's biggest morning brands - not to mention research he recently undertook to observe breakfast-eating habits of 33,000 UK consumers. However, Kalotis' remit also includes Oat So Simple porridge, Copella apple juice, Naked smoothies, which launched in the UK in 2007, and rice-cake brand Snack-A-Jacks.

Leading a portfolio of breakfast and healthy products, you would think Kalotis is a key part of PepsiCo's Health Report - its global strategy launched in 2010 to make its brands healthier, including cutting fat, sugar and salt by 25% across the global portfolio. However, he is uncharacteristically reticent on the subject, saying it is not part of his remit and it 'falls to the corporate side of the business'.

His healthy portfolio does allow for the natural step into the cross-promotion of brands, referred to in-house at PepsiCo as 'the breakfast deal' - something on which he intends to focus more. This is made easier by the similarity of a typical Quaker and Tropicana consumer, who is 25 to 40 years old and happy to spend slightly more for a premium product.

According to PepsiCo the Tropicana flavour blends portfolio, branded 'Orange Creations' on cartons, appears 'more interesting' to younger consumers, and in the past year sales grew by 20%, according to Nielsen.

'If the Tropicana juice (on offer) happens to be orange and passion fruit, then you're appealing to a different demographic, which allows us to bring new cohorts into the business, and that's really important for porridge,' says Kalotis.

He has been working to overcome the 'outdated' consumer perception of porridge - that it is a hassle to make and tastes bland - through a series of product designs and flavours. A decade ago, Kalotis explains, porridge was associated with an older demographic, and thought of as a 'traditional breakfast'. Now, it is a steadily growing section of the cereal category, with Oat So Simple sales having grown by 25% in the past year.

Porridge's revival is partly to do with its availability for the on-the-go consumer, reflected in the fact that pots of ready-made porridge can now be bought in coffee and food chains such as Starbucks and Pret A Manger. While Quaker's traditional oats remain a major part of the category, the balance is shifting as the Oats so Simple single-serve sachets grow in popularity - now accounting for slightly more than 50% of PepsiCo's contribution to this market.

PepsiCo's latest NPD, Quaker Pots, has been a 'runaway success', selling more than three times the original estimate of sales, according to Kalotis. While Oat So Simple has featured extensively in TV ads, the pots brand extension has yet to be marketed in this way, something which he hints may be in the pipeline.

Tapping into the on-the-go market is a strategic way of getting young audiences to engage with Tropicana and Quaker, and to develop Naked, adds Kalotis.

For PepsiCo, on-the-go is not about impulse purchases. As Kalotis explains, 60% of everything consumed out of home was first bought in supermarkets as part of consumers' grocery shop. So, developing single-serve bottles of Copella, pots of Quaker or multi-packs of Tropicana is an essential way of making the brands portable, and getting them into adult consumers' daily out-and-about routines.

Children also play an important part in the plan to grow sales of the products in his portfolio. Although its Paw Ridge sub-brand was axed this year, PepsiCo's children's offer has vastly improved since it became part of Oats So Simple, claims Kalotis. New flavours, including fudge, honey and blueberry, have helped win over children, thereby improving the chances that they will 'grow up' with the brand.

Kalotis says that the 'paradigm shift' is in showing parents the range is 'less than half the sugar than any other cereal, while giving children a flavour they tend to like'.

Despite the mainly traditional marketing routes used for the brands he leads, Kalotis insists that he is 'no technophobe'. He was part of the committee that judged the PepsiCo10 competition earlier this year to find 10 innovative digital start-ups to partner. 'Being part of those discussions allowed me to have exposure to what's new out there. Some of the start-ups will be hugely successful,' he says.

Kalotis' understanding of the power of digital is clear from the success of the Evian 'Babies' campaign that he led while at Danone, which made the Guinness Book of Records for its 45m online views.

With a campaign such as this under his belt, Kalotis has a lot to live up to. However, having translated his experiences in Brazil into a major TV ad, it's clear that 'Mr Breakfast' is intent on doing just that.

INSIDE WORK

1996-2000: Management trainee, rising to senior brand manager for detergents, Unilever

2000-2004: Marketing manager for ice cream, rising to business unit manager for sweet baked goods, Masterfoods

2004-2005: Head of marketing innovations, non-carbonates and energy drinks, Coca-Cola

2005-2010: Marketing director for waters, Danone UK and Ireland

2010-present: Group marketing director, healthy brands portfolio, PepsiCo

OUTSIDE WORK

Lives: Chiswick, West London

Family: Wife Tessa and two children (soon to be three)

Car: Porsche Cayenne

Hobbies: Tennis, cinema, fantasy sports

This article was first published on marketingmagazine.co.uk

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