Build, Buy Or Partner? How Smart Brands Create New Business Models

[00:00:00] Tessa Burg: Hello, and welcome to another episode of Leader Generation, brought to you by Mod Op. I’m your host, Tessa Burg, and today I am joined by Stephen Trammell. He’s the Vice President for New Business Models at Nestle Purina North America. And we’re so excited to jump into this conversation about the ways and the different models and frameworks brands can use today to show up for their customers like never before. 

[00:00:25] Tessa Burg: And we’ve heard this promise of AI, but Stephen has actually been leading new business models at Nestle and doing this well before the advent of AI. So we’ll get to lean into what are those success factors, where can you start, and how can you start to deliver value to your customers in ways that aren’t just adding product to the shopping cart or in transactions. 

[00:00:48] Tessa Burg: So Stephen, thank you so much for joining us today. This is really exciting.  

[00:00:52] Stephen Trammell: You bet. Thanks for having me. I’m excited as well.  

[00:00:55] Tessa Burg: So before we start, let’s learn a little bit more about you. Tell us about your career journey up until this point.  

[00:01:01] Stephen Trammell: Yeah, for sure. So, um, so I’ve been with, uh, uh, in the CPG industry for, uh, over 20 years, um, and currently at Purina for 21 years, actually, as of this month, so quite a while, um, all in, uh, marketing in one form or fashion. 

[00:01:17] Stephen Trammell: So I started, um, in marketing research, uh, traditional marketing research, a lot of qual and quant, and then I moved into tr- traditional brand marketing, um, on a bunch of different brands. Uh, and then from there I was asked, actually, we’ve got a, a global, um, business unit, uh, within, that sits within Purina and Nestle, and I was asked to move into a digital role within the global unit. 

[00:01:41] Stephen Trammell: Um, I- at the time, I did not have anything digital on my development, uh, checklist. Uh, and I thought, I sat down, um, with the CMO and I said, “Okay, I’ve got a long career left. Um, I can probably learn some cool things.” And so I went into that role. I was only in it for about 18 months before they pulled me back into brand marketing. 

[00:02:03] Stephen Trammell: Um, but that digital role really opened my eyes, uh, to a totally different career path, and actually has led me to where I am today. So I went back into traditional brand marketing, but I told the CMO at the time, I said, “Hey, I’ve really got a passion for digital products, how they connect with consumers. 

[00:02:20] Stephen Trammell: I’d love to get there.” Um, and at the time we had a, a group, uh, that was called Personalization at Scale, and, uh, long story short, spent a couple years back in that traditional brand marketing role leading a couple brands, and then I moved into the New Business Models group, what we call New Business Models today. 

[00:02:38] Stephen Trammell: Uh, and I’ve been on this team for about five or six years.  

[00:02:43] Tessa Burg: Yeah, that is amazing. And the word new business models just sounds like very transformative opportunities, getting creative, collaborating across different units. What… Tell, let’s dig into that word a little bit more. Like, what are some of those digital products and experiences that you’re managing underneath the new business models banner? 

[00:03:04] Stephen Trammell: Yeah. Yeah, absolutely. So the way to think, the easiest way to think about the new business models team at Nestlé Purina is, um, it’s, it is our portfolio of digital-first brands. So we’re still building brands, still very much focused on the consumer, um, but they’re digital first. So across the portfolio, we have, um, all of our apps, uh, our websites, uh, all the content that we publish. 

[00:03:29] Stephen Trammell: Um, we have, uh, a, a brand and a portfolio of connected devices and health kits, um, IoT devices. Our direct-to-consumer brands sit within new business models. So, um, if it is, uh, if it is a digital, if it is a digitally native brand, uh, it sits, it sits with, uh, with us. We’ve got a, we’ve got a, a software product, a website that is the largest shelter rescue adoption site-  

[00:03:52] Tessa Burg: Oh, wow 

[00:03:52] Stephen Trammell: uh, Petfinder. So a lot of different… It’s a, it’s quite a conglomeration of, uh, of brands. It’s really exciting. Um, and, uh, in many cases, these things are pretty new, right? Within the last couple of years that we have started from s- from scratch  

[00:04:09] Tessa Burg: So how, so you have the overall Nestle Purina brand, and then let’s talk about that pet shelter one. 

[00:04:15] Tessa Burg: What were some of the insights, or where did you even get the insights to say, “Hey, this feels like an opportunity to have a digital-first brand do something different underneath the Purina banner”?  

[00:04:29] Stephen Trammell: Yeah, I mean, so, so at the end of the day, we’re very focused on deeply understanding the consumer, in our case, the pet owner. 

[00:04:37] Stephen Trammell: We spend a lot of time and a lot of resources building consumer insight, understanding what jobs need to be done, what are the pain points that pet owners have, and then solving for those. Um, and so that’s really the way that any of these ideas have, have come to life, um, uh, within, within my team. So, uh, at the end of the day, new business models in this team exists in order to drive the core business, um, uh, uh, our traditional food, treats, litter, supplements. 

[00:05:12] Stephen Trammell: Um, so everything that we do has a focus on how do we drive back to that core. And in the case of Petfinders, it’s a great example of the best time to form a relationship with a pet owner is at the moment of acquisition, right? When they first get that pet. And that’s the, that’s the best way to maximize lifetime value with the consumer, and so that’s the role, uh, one of the roles of, of Petfinder specifically. 

[00:05:34] Stephen Trammell: And if you look across all of our different digital properties, they’re all powered by Purina. They’re all branded powered by Purina.  

[00:05:42] Tessa Burg: Hmm.  

[00:05:42] Stephen Trammell: And that’s been very intentional. Um, again, we’ve done consumer research across each of these, and we know that by putting the brand Purina behind it, um, it elevates the experience, it adds equity to the Purina brand, um, and it also, because we’re connecting all these different digital products and experiences, it makes it more seamless, um, and understandable for the consumer  

[00:06:08] Tessa Burg: What I like about that model is you’re going beyond just looking at the customer’s journey to purchase. 

[00:06:18] Tessa Burg: You’re not saying, “How are they discovering pet food?” And then, “What does it look like after they identify a need, and how we compare to competitors?” And really focusing on that single journey. You’re looking at them as a human with ex- that exists within an ecosystem, and a non-linear journey, and sort of those points of emotion and passion, as you put, acquisition. 

[00:06:43] Tessa Burg: Like, where, where’s the start of them in a relationship overall? And that’s, that’s pretty awesome. And, like, pet finding does seem to make a logical choice. Are there other examples of these digital properties where you’re intersecting at other moments for your customer?  

[00:07:02] Stephen Trammell: Yeah, absolutely. So, you know, it’s, it’s really, it’s really well said. 

[00:07:05] Stephen Trammell: And, and, and what we, what we’ve done is we’ve said, “Okay, we’ve, we have … We’ve looked at the consumer journey from the moment of acquisition all the way to, you know, unfortunately, the, the end of the life of the pet.” And we’ve identified lots of different inflection points across that entire pet-owning journey. 

[00:07:22] Stephen Trammell: And where, what we’ve said is we’ve na- mapped out where do we as, as Purina wanna play? Where do we wanna have a relationship with the consumer? And then there are other areas where we’re not gonna build or buy necessarily, but we know it’s important, um, uh, it’s an important part of pet ownership. So, telehealth would be one. 

[00:07:41] Stephen Trammell: Um, pet insurance would be one. And so in the areas that we’re not gonna build or buy, we’ve said, “Hey, we, we still wanna have the relationship with the consumer and provide them the products, the expertise that they’re looking for, so we’ll partner with people out- with companies outside of, of Purina to, in order to be able to serve that entire ecosystem.” 

[00:08:00] Stephen Trammell: But if you think about, for example, Petivity, which is our portfolio of IoT devices and health kits, that is entirely about giving your pet a voice, essentially. And we know from a lot of research that pet owners are constantly trying to figure out, “Am I doing the right thing? Uh, am I doing the best that I can for my pet?” 

[00:08:18] Stephen Trammell: They can’t talk to you obviously, right? Um, and so these devices and health kits are providing insights to your pet, uh, from the data that’s spinning off of them that then allow us to make recommendations on, “Hey, your pet is looking a little less active, maybe not moving as well. Here’s, here’s some ideas on either enrichment activities that you can do with them or a supplement that you might want to add to your diet.” 

[00:08:43] Stephen Trammell: So, um, that, that’s one, another example of something that sits within our portfolio that’s really delivering a high amount of value to the, to the pet owner  

[00:08:55] Tessa Burg: I, you said something that really resonates, and I see a lot of marketing leaders going through this right now, which is where to build versus buy. 

[00:09:05] Tessa Burg: And if other marketers are gonna start taking the journey similar and say, “Hey, I’m gonna not just look at the product life cycle. I’m gonna look at my customer’s life cycle and my customer’s overall experience before, after, during, and adjacent to where my product sits,” what is the criteria that you’re using as where you should build versus buy versus partner? 

[00:09:31] Stephen Trammell: Yeah. Yeah, I mean, um, you know, probably not rocket science, but it, it really comes, boils down to deeply understanding what your, what your overall corporate strategy is, and ensure that, ensuring that any of your new ideas or how you go to market with them ladder up to that. And I also think it’s extremely important to know what you as an organization or a brand are really good at-  

[00:09:57] Tessa Burg: Mm-hmm 

[00:09:57] Stephen Trammell: and understand how to harness that to drive, to drive the strategy and to drive the decisions on is this, is this something that fits with kind of one of our superpowers, one of our strengths? And in which case, yes, we should absolutely build that. Or not really, but we know it’s important, so maybe we go partner  

[00:10:18] Tessa Burg: I love that answer. 

[00:10:19] Tessa Burg: And I think, too, there’s sometimes it’s a lot of fun to always sit back and refresh, like, what are we really good at? And I love the phrase superpower. And we have tools now that can give us new superpowers. But in a previous podcast interview, there’s also that danger where I think it’s important to start human first when you’re doing that because just ’cause you can use AI doesn’t mean you should. 

[00:10:44] Tessa Burg: And-  

[00:10:45] Stephen Trammell: That’s right  

[00:10:46] Tessa Burg: … I feel like where AI, yes, can give you new capabilities, it’s also clouding decisions and making them more complicated than they need to be. So I wanted to dive into, you know, if we set AI aside, and I know you’ve done a lot of pilots with some of these new ideas, what has been the success factor? 

[00:11:05] Tessa Burg: What are you looking for? How do you structure the pilot? How do you validate that, yes, this is our superpower, this is the right direction, we are building on a core strength of ours, and so now we’re gonna go and scale it?  

[00:11:18] Stephen Trammell: Yeah. Um, I mean, so certainly, certainly, uh, yes, you’re right. Lots, we’ve run lots of pilots. 

[00:11:24] Stephen Trammell: Um, uh, and not all have been successful. Um, but, but c- certainly the, the mindset has gotta be that you, you, we’re willing to take risks. We, we know that n- nobody bats 1,000, right? So not everything is gonna pan out. But a- uh, you know, again, it goes back to, uh, the decision comes back to, uh, deeply understanding the, the consumer and the pain points. 

[00:11:48] Stephen Trammell: Um, it’s, uh, it’s, it’s certainly taking a, a- an MVP mindset, um, kind of understanding that with any of these pilots, 80% is, is good enough. Uh, and Being willing to embrace being uncomfortable. Um, uh, certainly surrounding, um, yourself with, uh, with people who have, have grit, who are tenacious. You’re gonna need that really to scale because digital transformation is not easy. 

[00:12:21] Stephen Trammell: Um, I think some people think that it happens, like, in a flash, and it doesn’t. It takes time. Uh, it often takes a, a village. Um, it’s not, it’s not just the responsibility of, like, of one department within your organization. It’s everybody’s responsibility to drive digital transformation. So any of these pilots that we’ve started, we’ve set- we’ve made sure that we set out, um, a North Star. 

[00:12:42] Stephen Trammell: One key metric that we say, “This is how we’re gonna measure. This is what we’re gonna measure against. We’re gonna give it time. We measure, we report out, and we see whether or not it scales.” And certainly, that measure should be consumer-based.  

[00:12:58] Tessa Burg: And how many pilots are you running at any one time?  

[00:13:02] Stephen Trammell: Well, um, good question. 

[00:13:04] Stephen Trammell: I mean, I guess right now, as I look across our department, um, most of what we’re doing in terms of the big part- the big pieces of the business, those different parts that I talked through earlier, those are more or less set in stone. But within each of those, Pativity, our, our health kits and our IoT devices, those are constantly evolving. 

[00:13:23] Stephen Trammell: We’re constantly across the entire department running AB testing, right? Um, so there are pilots within each of those businesses where we’re learning and we’re testing and we’re pivoting. Um, and then certainly with the advent of, uh, with AI, um, there’s a whole lot of, uh, pilots that will be coming, especially as we think about agentic AI and even internal processes and ways of working and how it can help us from an efficiency standpoint. 

[00:13:49] Stephen Trammell: So kinda hard to answer exactly how many, but I think it’s important that within each of these digital products, we’re constantly piloting within that, that, that tracks.  

[00:13:59] Tessa Burg: No, it does. And I ask that question because sometimes I feel like, you know, us clients might lose track of how much change any one group of people can handle. 

[00:14:12] Tessa Burg: So when, when you want to go, who… You said it takes a village. Who are the right people to invite into the village to help get it from pilot into scale? And-  

[00:14:24] Stephen Trammell: Yeah …  

[00:14:25] Tessa Burg: like, how do you manage the amount of change that is going out across the business at any one time?  

[00:14:33] Stephen Trammell: Yeah. I mean, you certainly, the, the right folks in the village are gonna be people who are really curious, um, and constantly, uh, asking what’s next, um, constantly pushing. 

[00:14:44] Stephen Trammell: Uh, again, uh, people that are willing to take risks, people that are willing to be uncomfortable, people that are constantly learning. Like, that is, that is key for everybody that sits within a team. Like, a- and again, going back to the, to the, the point of AI, um, we- we’ve got, uh, you know, a monthly department meeting, and we highlight each month, um, what people are doing within AI, within either their personal life or within their professional, uh, job. 

[00:15:11] Stephen Trammell: How are you using it? What are you testing? Um, so that, that, that idea of constantly learning and c- curiosity and passion, uh, for the new is, is, is really important  

[00:15:24] Tessa Burg: I love that answer, and I feel like when people self-reflect and think about when’s the last time I learned something new, am I asking enough questions, not just of people on my team, but of myself, and that can kind of give you an answer. 

[00:15:41] Tessa Burg: Am I in the village? Do I… Am I in the… Because all of us now are in roles where you have the official title, New Business Models, but with the advent of AI, we all have an opportunity to look at the customer life cycle, not just from our product, but certainly within the ecosystem of our brand, and get curious about what’s going on with them, where are their pain points, where are their blockers, where are those points of passion that we see them start what could be a soft relationship with our brand, and, and where do we have that moment to engage. 

[00:16:22] Tessa Burg: Uh-  

[00:16:22] Stephen Trammell: Yeah  

[00:16:22] Tessa Burg: … what are… when you’re looking at some of the, the pilots and even just looking at the team, and you said you have the North Star and the success metrics, what are… D- Tell us a little bit more, like, what-  

[00:16:36] Stephen Trammell: Right  

[00:16:36] Tessa Burg: … how do you describe that North Star? What are those KPIs, and how do you socialize that within the business? 

[00:16:42] Stephen Trammell: Yeah. Yeah, so, um, you know, uh, uh, at the end of the day, I mentioned earlier, what our, our responsibility is to, to certainly serve the pet owner and provide them with what they need, but from a, from internal standpoint is to drive the, the core business. So at the end of the day, everything that we’re doing across New Business Models, the idea is to create frictionless, seamless consumer journeys throughout pet ownership in order to drive loyalty. 

[00:17:11] Stephen Trammell: So at the end of the day, our North Star metric is loyalty. So how much are consumers spending with us? So when they’re putting, when they’re putting their card down, uh, when they’re out- when they’re online purchasing, are they, are they choosing us? And so that, that is our North Star metric. We’ve got some great ways that we measure it, um, but if we’re not driving loyalty, uh, by building a, a real relationship with you and personalizing your experiences based on what we know about you, then, then we’re failing. 

[00:17:41] Tessa Burg: And I like that you use the word loyalty and not just conversion. You know, it is, uh, ’cause loyalty is a deeper relationship, a longer term relationship than-  

[00:17:53] Stephen Trammell: Yes  

[00:17:54] Tessa Burg: … you know, did I, you know, at the point of sale get them to add to a basket? Um-  

[00:17:59] Stephen Trammell: Yes  

[00:17:59] Tessa Burg: … so that’s really strong, and I think that loyalty and brand are becoming bigger points of conversation, and rightfully so. 

[00:18:08] Tessa Burg: Uh, ex- yeah.  

[00:18:10] Stephen Trammell: Yeah, and it’s getting, I mean, it’s getting, you know, it can be, it can be tough. There is, there is a lot of noise out there. There’s a lot of really strong competition. Um, there’s a lot of points within the pet owning journey where we could be disintermediated, right? Any time you’re searching for an app, any time you’re in an, in ChatGPT, um, th- there are a lot of points of disintermediation. 

[00:18:31] Stephen Trammell: So the, the, the, the more we can do and the better we can do of building that relationship with you, again, understanding you, understanding your pet, and using the data that we have about you and your pet to personalize the experience, the stronger, the stronger the relationship becomes and the less likely that you wind up choosing somebody else. 

[00:18:53] Tessa Burg: Yeah, and you’re finding those points where you can show up authentically.  

[00:18:57] Stephen Trammell: Yes.  

[00:18:59] Tessa Burg: And you don’t have to like-  

[00:18:59] Stephen Trammell: Yeah, that’s exactly …  

[00:19:00] Tessa Burg: yeah, you don’t have to stretch and be like, “Why is Purina here?” You know, it’s like-  

[00:19:04] Stephen Trammell: Yeah. Yes … no. And that goes exactly back to, you know, your, your question earlier about build, buy, partner. 

[00:19:09] Stephen Trammell: That’s, that is e- that’s exactly it. What are we really good at, um, and where can we show up authentically? I love, I love that word.  

[00:19:18] Tessa Burg: So we’re almost out of time, but before we get off, what, you know, there, there’s a lot of things changing in the way customers purchase. We have new tools. What are you most looking forward to in 2026? 

[00:19:29] Tessa Burg: Like, uh, what’s that out- not just, oh my gosh, 2026 is going by too fast. We’re gonna go- Yeah. … the next 12 months. What are you most looking forward to in the next 12 months?  

[00:19:39] Stephen Trammell: Yeah. Um, well, you know, o- one thing, uh, very clearly is, is scaling some of these, uh, some of these things we have, right? We’re putting a lot of, uh, of effort and resources and, and communications behind parts of the, these parts of the business. 

[00:19:52] Stephen Trammell: And so certainly scaling them and seeing them add value for consumers is one. Uh, and the other one, I mean, I’m sure it’s probably in, in all of your, in, in all the folks that you talk to, truly is, um, how we show up and use AI, right? So the I- so agentic commerce, um, social commerce, uh, that is, um, that is it. 

[00:20:14] Stephen Trammell: How, how we in- influence consumers and the way that that’s changing, uh, I- is, uh, is huge. And so in the next… I mean, it’s, it’s changing by the day. Um, but we’ve got a lot of, uh, thinking and efforts going behind, um, behind those areas. So it should be, should be exciting.  

[00:20:32] Tessa Burg: That’s awesome. Well, we’re gonna have to follow up on the agentic commerce and social commerce, ’cause those are areas a lot of people are exploring, and we’ll be able to learn even more from what works with your digital brands. 

[00:20:45] Tessa Burg: Yeah. Uh, Stephen, thanks so much for joining us today. If listeners have questions and wanna reach out to you on their own, where can they find you?  

[00:20:52] Stephen Trammell: Yes. Um, uh, easiest spot would be LinkedIn, so feel free, uh, feel free to reach out there. And, uh, yeah. Thanks, Tessa. It’s been, it’s been fun to chat.  

[00:21:01] Tessa Burg: Yeah, it’s been amazing. 

[00:21:02] Tessa Burg: And for listeners, visit our transcript page so you can pull out these great frameworks that you can use on your own to open up new ways to connect with your consumers. You can find all of our podcast episodes at modop.com/podcast, M-O-D-O-P.com/podcast, or just search Leader Generation wherever you listen to podcasts. 

[00:21:24] Tessa Burg: And until next time, have a great weekend, Stephen.  

[00:21:28] Stephen Trammell: Thanks, Tessa. You too