Harnessing the power of innovation at British American Tobacco
Technology today is changing rapidly – the cost of genome sequencing is falling exponentially, organs on chips are revolutionizing toxicological testing, and the possibility of storing clean energy in batteries is becoming reality.
To ensure we stay ahead of the curve, we must harness this pace to our advantage in the rapidly developing vaping and tobacco heating business. Our Strategic Science & Technology unit is transforming BAT’s competitiveness and approach to innovation, keeping us ahead of the game.
Over the past five years, BAT has been transforming from a company manufacturing a single agricultural product into a multi-category tobacco and nicotine company. The opportunity to create vapour and tobacco heating products has been opened up by advances in portable consumer electronics. These technologies are changing rapidly, and to make the most of adapting them to our next generation of products, we felt it was essential to dedicate a group to search for the next waves of technology.
With that in mind, we set up the Strategic Science and Technology (SS&T) unit in 2015, with a remit to ‘bring the future to life’.
“Our aim is to keep BAT a step ahead of the curve, seeking out new technologies, consumer trends and business models, and providing options for the company going forward,” explains Phil Giesler, who set up the unit.
Giesler joined BAT R&D in 2015 from Unilever, where he had led category R&D and venture capital funds.
“What attracted me to BAT is that, in an industry on the verge of momentous change, it needs to quite radically adapt its approach to innovation.”
One of the ways our SS&T unit is adjusting BAT’s approach to innovation is by building new capabilities that embrace open innovation—looking externally to tap into bigger and better propositions. We are harnessing skills and technologies developed outside BAT, from leading universities and their spin-out businesses through to corporates in very different sectors. Inhalation science, heating technology, integrated electronics, battery efficiencies, new materials, fluid dynamics, biotechnology, manufacturing techniques and aesthetic design are just some of the rapidly evolving technologies and areas of research that form part of what we do now. Adopting advances developed elsewhere, such as new types of batteries from the mobile phone sector or aerosol delivery systems from the pharmaceutical industry, can greatly benefit us.
“Our next generation products comprise an array of technologies—we realise we can’t do it all,” says Giesler.
“Involving others can add great value.”
Recognising the need to build knowledge and expertise within BAT by bringing in new skills from outside, we recently hired an electronic and electrical design engineer from Dyson, a leader in innovation from Proctor & Gamble and an expert in behavioral sciences from Nestlé.
“The result is a broader mix of people with a wide-ranging skill set and with very different experience bases and approaches to innovation,” says Giesler.
One of these new recruits is Ed Forsdike, who now heads up SS&T. Forsdike spent 15 years at Proctor & Gamble, designing and innovating for well-known brands like Gillette and Braun, as well as for emerging markets, including India, China and Brazil. Although he had a bright future at Proctor & Gamble, Forsdike was attracted to BAT’s harm reduction mission.
“I thought, ‘here’s a real opportunity to make a big difference from an innovation point of view—providing satisfying alternatives to smoking will make a big difference’,” he says.
“I love BAT’s strategy of respecting our consumers’ choices, making sure they’re aware of the risks and providing a great range of products across the risk reduction spectrum.”
“At the same time,” adds Forsdike, “it’s very exciting to be part of an industry that’s changing drastically. Many companies talk about disruptive innovation while hoping it’s not going to happen, but BAT is very different. Working for a company actually committed to transforming itself is very exciting.”
Patrick Moloney, SS&T’s Electronics and Device Manager, agrees.
“The challenge is to predict a world that doesn’t yet exist, and create proposals that will resonate with evolving consumers,” he says.
“We aim to challenge the status quo, both developing our own in-house technologies and keeping abreast of emerging technology in very different industries that would add value to exciting new harm reduction devices of the future.”
Moloney also recently joined BAT, after nearly ten years at Dyson where he managed a New Product Innovation team of fast-paced free thinkers whose primary goal was to conceive and develop the ‘next big thing’.
“Whilst I enjoyed my time at Dyson, the products are mainstream consumer goods and don’t face the challenges that the tobacco industry has to contend with—at BAT I feel like I can make a meaningful difference.”
Although well aware of the negative image historically surrounding tobacco companies, Moloney wanted to be part of the solution, working in harm reduction and potentially reducing risk.
“My experience of looking around BAT was not what I’d expected. The people I met were open, straight-talking, and friendly—it was refreshing actually,” says Moloney.
“At BAT there is the same appetite for new devices [as at Dyson] and I face the same sort of fundamental engineering challenges, just with very different applications.”
Corporate venture capital
Constantly on the lookout for new capabilities, the SS&T unit is engaging in corporate venture capital as an alternative funding model for innovation. We recently made a venture capital investment in China Materialia, a material sciences company involved in sourcing new technologies from the rapidly growing Chinese science and technology ecosystem. Although hoping for financial return on such deals, what will definitely be gained are strategic insights from accessing breakthrough technologies much earlier than would be possible otherwise, identification of future trends and development of key relationships in difficult-to-reach markets.
“Opening our eyes to what’s out there will help us more rapidly develop technology and business options for the company,” says Giesler.
“Our future will be built by collaborations of all kinds, and we’re open for business.”
Investing in new technology and skills is crucial, but we firmly believe that this is not enough. So, we’ve been growing our consumer insight capability, aiming for a much deeper understanding of their behaviors, wants and needs. We’ve enhanced the consumer facilities at our R&D site in Southampton, where we are establishing new methods to involve consumers directly in our R&D work, ultimately aiming to give them new and satisfying experiences across the harm reduction spectrum.
Our sensory and technical analysis department is where we measure, analyse and interpret sensory responses to our products, using panels of trained and untrained (or “semi-naïve”) volunteers to assess products through sight, smell, taste, touch and hearing.
“Fully understanding how the sensory experience of consumers drives interaction with our products is the key to truly unlocking next generation sustainable businesses,” says sensory scientist Jenni Hawke.
With sensory science acting as a crucial bridge between R&D and our consumers, we’ve made the effort to incorporate it into the early stages of product development, enabling us to adjust prototypes as we go to ensure that final products are attractive to and fully engage consumers. At the same time, to foster a faster-moving entrepreneurial-type culture, we have converted one of our laboratories into an innovation space, which is a special area that allows people to experiment and build up early stage ideas and concepts. We are able to rapidly prototype new device designs and gain feedback from a panel of consumers.
“With early stage R&D, we can explore a wider range of options and make quick calls,” says Giesler.
“Large organizations can be slow moving, resulting in reduced R&D productivity or wasted investment. Creating this innovation space within our company gives us the agility we need in this now fast-moving industry.”
This move coupled with our decades of world-class experience in all aspects of tobacco, harm reduction and aerosol science creates a potent mix that sets us apart, explains Forsdike.
“Bringing this all together gives us a powerful capability, enabling us to do things start-ups can’t do on their own,” he says.
“An awesome legacy of expertise and our ability to rapidly prototype new devices and create new harm-reduced experiences is the magic we have at BAT.”
Want to find out more about BAT and our science and innovation? Take a look at our Science & Technology Report.
Joanna is the Digital Manager for British American Tobacco’s Research and Development facility in Southampton, UK.