Digital Transformation as a test of the ability to cooperate in a Company – interview with Maciej Herman, CEO LOTTE Wedel

The growing awareness of consumers, their expectations towards brands, increasing competitiveness in the area of innovation and communication – these are the elements that determine the high positioning of CMOs in company structures and discussions about their development, but it is worth emphasizing that every voice in the organization should be heard and taken into account, because this results in a multifaceted view of the projects and makes it possible to break patterns – Maciej Herman, CEO of LOTTE Wedel.

Maciej Herman, CEO of LOTTE Wedel, was interviewed by Piotr Ruszak, Chief Communications Officer Publicis Groupe Poland.

Piotr Ruszak: It is commonly believed that the pandemic has accelerated many business processes in companies, has anything changed in your case?

Maciej Herman: Despite challenges and difficulties, a pandemic, like any crisis, also creates new opportunities and opportunities.  One such area is innovation and digitalization.  There are a lot of specific examples – I can mention, for instance, remote control of employee health, applications for maintaining hygiene in the workplace, improvement of production processes and those related to sales, planning and business analysis. At Wedel, we are currently focusing on IT solutions in the areas of virtual communication, employee engagement and administration. 

Another example of change is the response to the growing popularity of the e-commerce channel, which up to now has not been as significant for the sale of food products, including sweets. The pandemic accelerated this trend and the producers intensified their presence in the Internet. We are also developing this sales channel, for example, we have launched the E.Wedel Chocolate Shop online store.  Another interesting feature is the online platform for the personalization of Wedel wafer cakes. The pandemic has certainly influenced the prioritization of such projects and motivated the development of more. The popularity of the e-commerce channel in the sale of FMCG products will probably stay with us after the pandemic ends.

PR: Has your industry been particularly affected by the lockdown and the social crisis, how did it react?

MH: Yes, in the spring, the confectionery industry was affected by the decline caused by the change in shopping behaviour resulting from the imposed restrictions and lifestyle changes of many consumers. This was particularly true for impulse and gift products (pralines), which were not bought as frequently, due to recommendations to stay at home and orders to cover their nose and mouth in public spaces. The declines in the sale of pralines were influenced by the decrease in the frequency of visiting friends (going “to someone’s home”), where it is appropriate to bring something sweet.

Another area of challenges concerned the organization of the office, factory and sales department working in the field. The introduction of safety regulations that would minimize the risk of infection among our people as much as possible, adjusted to the specifics of each department’s work, while continuing business activities, was necessary.

Wedel sweets are exported to 60 countries, so we were also confronted with problems of transport companies, related to the absence of staff, an insufficient number of subcontractors or long queues at border crossings.

The pandemic situation has been intensifying recently, so we are trying to be prepared for various scenarios, although not everything can be predicted. We are certainly richer as a result of our experiences from the spring season and we will continue our approach, which is based on flexibility and constant change (which is also part of Wedel’s mission and values), ensuring the health and safety of our employees, open communication with the environment, order execution and continuation of ongoing projects and long-term and strategic planning of activities in the coming months.

PR: Do you observe such pandemic-induced consumer behaviour that can permanently change your approach to marketing?

MH: The current situation further emphasizes the need for responsible and reliable communication with consumers. After a pandemic, they will not only expect the maintenance of socially engaging activities but also their development. The content and solutions we create should correspond to the current situation and fit in with the real needs of consumers. The pandemic has shown that almost everything can change overnight – including communication, the primary goal of which should be to stay close to the audience with the simultaneous positioning of the brand.

At Wedel, the approach described above has been present for a long time.  What has gained strength in connection with the pandemic and will remain for a longer time is related to the trends of big data and advanced analytics – reaching the right user at the right time, with an offer corresponding to their current needs. This has and will continue to have an impact on even more in-depth data analyses and the ability to draw the right conclusions, which will further increase consumer loyalty to the brand. As I mentioned earlier, the rapid growth of the e-commerce channel has attracted greater attention on the part of FMCG category representatives. This is important, among others, in the context of solutions improving the quality of cooperation with the e-retail industry – in terms of increasing effectiveness, promotion planning or analytics. 

PR: Do you think that brands in the face of the crisis we are currently facing have some special role to play?

MH: Brands and companies are part of our world. The scale of their activity gives a lot of opportunities to react to current events. They accompany consumers through their products and services each and every day, and their messages reach a wide audience.  Companies are able to take specific steps to meet challenges, both locally and globally. In the face of a pandemic, when health and safety is at stake, a responsible approach that is sensitive to the needs of the environment is particularly important. At Wedel, a broad outlook, going beyond just running a business is an integral part of our identity.  Jan Wedel had the same approach before the war. We want and must influence the environment not only through our products, but also within the framework of what kind of manufacturer, employer and partner we are.

During the pandemic we got involved in helping those in need, in cooperation with external partners. With InPost, we sent sweets to hospitals treating Covid patients all over Poland and employees of Warsaw’s municipal transport plants, while together with AVIVA we got involved in helping the Polish Red Cross, where we reached Polish Red Cross wards and over 400 paramedics with support. We also provided financial support to the Polish Center for International Aid. These funds were used to supplement the equipment for the PCPM Medical Rescue Team and to conduct training on operating respirators for doctors and paramedics. In the face of the problems resulting from the current situation, we also provided financial assistance to our friends at the Children’s Heart Association to support the organization of tutoring for its wards in need of additional learning assistance in connection with the introduction of remote education.

With a CSR strategy covering the numerous projects and initiatives to date, we have taken the above spontaneous aid actions, because sensitivity to the needs of the environment is not an empty slogan for us and we want to take specific actions, both ad hoc, needed here and now, as well as those written years ago, shaping our company’s impact on the environment in the long run.

PR: Do brands of local provenance, but also locally managed, have additional advantages over global brands today, what do they entail?

MH: My observations and experience show that the advantage of local companies lies primarily in the flexibility and speed of decision making. We are also able to better adapt our solutions to the specific needs of the Polish consumer, client and contractor, which becomes even more important in a crisis situation.  Knowing the specifics of the local market and the needs of buyers is crucial.  In the case of Wedel, which is part of the Japanese LOTTE Group, this is possible thanks to the “Glocalization” strategy (global company, local strategy and management) and the resulting management autonomy. Wedel has a Polish management team, which is responsible for creating and enforcing the company’s long-term business strategy. The identity and history of this unique brand, as well as its openness to dialogue with the external environment, including consumers, is very important to us. 

Of course, operational effectiveness in the times of difficulties we face today can also be maintained by representatives of global entities – everything depends on the flexibility of the organization and effectiveness with which they adapt to new conditions.

PR: Do you think that the role of CMOs in the development of a company’s business has a chance to grow, if so, why? 

MH: Communication professionals have a crucial role to play – they create the brand world and open it up to the outside world. This role is particularly important today, when consumer awareness is growing and their expectations for dialogue with the brand are as high as ever, especially due to SM channels. An important position of CMOs is also determined by the market environment and its competitiveness.  Innovative ideas for new products, corresponding to different consumer needs and non-standard, engaging communication are extremely important for success in the market. This determines the high position of CMOs in company structures and in internal discussions about their development.  However, it should be emphasized that every voice in the organization ought to be heard and taken into account, as this results in a multifaceted view of the projects and makes it possible to break patterns. At Wedel we operate  in such a manner, listening to each other and pursuing common goals.

PR: What can prevent a CMO from becoming a real leader in the digital transformation of a company?

MH: At Wedel, voices represented by individual departments are present in the discussion about digital transformation – each of them is guided by its own specific needs and looks at the changes resulting from digitization differently. The supply chain pays attention to production processes, the HR department sees new opportunities for communication and the development of employees’ skills and qualifications, marketing sees opportunities for innovative product development, promotions and sales, among others, for delivering products to consumers. Individual needs should not be treated individually, but as elements of one whole. The digital transformation is one of the tests of the ability to cooperate between individual departments in the company, openness to other points of view and questioning the status quo. Such a manner of conducting projects is present in Wedel, not only in the organizational culture, but also in real activities. 

PR: We have just seen a new advertisement of the Mocnomleczczna [Strong milk] chocolate line created by you together with Saatchi&Saatchi and Zenith, can you tell us what is behind this idea?

MH: The campaign promoting the new line of Mocnomleczna  highlights several attributes of Wedel. The first one is the role that people play in our organization, co-creating the company and its products. The protagonist of the longer version of the spot is Renata Kamińska, Wedel’s chocolatier, who developed the recipe for the new line of chocolates. Our recipe is made by people – authors of changes, creators of ideas and enthusiasts of chocolate art, so we wanted to show Renata’s role in creating the new line. Her character also emphasizes the highest quality of Wedel products, which is based on carefully selected ingredients, traditional recipes and long-standing chocolate craftsmanship. The second area is an absolutely unique combination of tradition and modernity for Wedel. History is an inseparable part of our identity, and the nurturing of the memory of Wedel’s founders’ achievements and their approach to doing business are inscribed in our organizational culture. Therefore, the spot takes us into a world where the past intertwines with the present – this is what Wedel does every day.  Inspired by the history of our company, we embed it in the present, often using non-standard marketing solutions. Hence the reference to the Tik Tok application, popular among young people. I would like to emphasize that Wedel was one of the first brands to use it as a commercial communication channel. There is also, of course, the boy on the zebra, the symbol of Wedel since 1926, which has remained unchanged. On the occasion of the “Wedel Up!  Let’s play it differently”  e-sports project, it was rearranged in retro gaming-style and now appears in advertising and on the new packaging in a revamped version.

PR: Privately, you are a fan of live concerts, and this year is not easy for music festival lovers, does the trend of live streams from concerts satisfy your music needs?

MH: Unfortunately not. Just like with chocolate – even the best TV commercial cannot replace real consumption. Festivals are a unique atmosphere, friends – old and new, changeable weather, spartan conditions. Music is very important, but it is only one element of the entire experience. Anyway, as you know very well, there are a lot of festival goers who go to festivals just to be there, music is just an extra for them. So yes, I follow the live streams, but I’m very much looking forward to the return of “normal” and real concerts.

PR: Thank you for this conversation. I hope we will quickly return to the real concerts.