Fernando Machado on why he’s leaving Activision Blizzard for the plant-based food space

Machado, who has more than 200 Cannes Lions awards – including five Grand Prix – under his belt, is leaving Activision Blizzard after two years of helming the gaming giant’s marketing efforts. As he looks ahead to his next challenge, Machado hopes to bring NotCo to the next level with new retail and consumer packaged goods (CPG) partnerships, an eye toward growth and a commitment to creativity that sees great ideas as its rudder.

Tell us about your decision to make this jump. Did it have anything to do with Burger King’s Impossible Whopper?

I’ve been tracking work from NotCo for quite some time. Around three or four years ago, when I was still at RBI [Restaurant Brands International], the CEO from Burger King in Brazil came to me and said, ‘Hey, you need to check out these guys – they’re a startup and they’re growing a lot. They already have leadership in some countries in Latin America, and they have this AI that they work with, which they use to evaluate animal-derived products, and they create a plant based match.’

I was really curious. And three or four years ago, AI was not as hot as it is today, but I thought it was really cool. So I started to follow [NotCo] from afar. The first thing that caught my attention was how they develop the products but as I got to know the company, the mindset [enticed me]. The company is called the Not Company – the products are called NotMilk, NotBurger and NotChicken. I thought that was really interesting – it’s a very disruptive way to position yourself. And as I started to follow the company, I saw that that mindset applied to everything that they were doing.

I started following Matias Muchnick, the co-founder and CEO, on LinkedIn. One day, a little bit over a year ago, Matias posted something – it was a specific campaign that I liked and I commented on his post. And then, like five minutes after, he sent me a direct message saying, ‘I'm a big fan of the work you did for Burger King, and it’s an honor that you like our stuff.’ And I was like, ‘Man, I am a big fan of the work you guys are doing.’ It was just a friendly exchange. We kept in touch, you know, just talking about design stuff and marketing stuff.

And then towards the end of last year, Matias reached out to discuss [an opportunity for me to join the team]. Quite frankly, I was not necessarily thinking about leaving Activision. I’ve been at Activision for two years. I love gaming, and I think that the franchises that the company has are pretty cool, and the stuff that’s coming [down the pike] is also really cool. And I like the teams. So I was a bit torn. I’ve never worked at a startup. I really liked the mindset from Matias, the vision, the ambition of re-inventing the food industry and the types of products that they were creating. I think that everything [NotCo is doing] that’s consumer-facing is still only scratching the surface of what NotCo can do and will do, so I was really excited about the opportunity.

I was going back and forth in my head and I had a conversation with a friend and he said something along the lines of, ‘What if you leave Activision and Activision continues to do well?’ I was like, ‘Well, I would be happy for them. These are some of the teams that I helped build and the projects that I was involved in.’ And he was like, ‘Okay, and what will happen if you don’t join NotCo, and NotCo grows as much as you think it will?’ I said, ‘I think I will never forgive myself.’

It’s still early days for NotCo and the potential is so massive that if you are not there before this potential is unlocked, you miss the window. That was kind of the mindset that made me leave Activision. I’m super excited about what’s coming because I believe in [the purpose, the vision and the products]. I think the technology is pretty awesome. I’ve learned a lot at Activision and I will continue to cheer for those guys. But I decided to take this adventure.

How will your experience across industries like gaming, fast food and personal care translate to your new role at NotCo?

One thing that my dad always told me when I was growing up was to always invest in your knowledge, [because] it’s the one thing that you will never lose. And so I always tried to put myself in a position where I was learning something. You know, I spent 18 years at Unilever, but it never felt like 18 years because I was moving across brands and product categories, with completely different groups of people. I lived in New York, Mexico, London and Brazil. Then, Restaurant Brands was an awesome experience – a completely different business model with franchisees … and a different culture.

And when I moved to Activision, one of the main drivers … was that I really wanted to work on something that was digitally native. Even though I did a lot of digital transformation for RBI and a little bit of social media when I was at Unilever, it’s not the same. Working in gaming [in particular] helped to shape the mindset that whatever we do in terms of marketing should be adding value to the people who are on the receiving end of that message or program. It’s not like gamers are playing the game and anxiously waiting for you to slap them with your brand – you always need to give something back.

So hopefully, coming into this new role, I can leverage a lot of everything I’ve learned. In terms of leadership – how to lead the team, how to influence the organization and … how to pitch the company outside. I’ll definitely leverage a lot of what I’ve learned in terms of digital marketing from my time at Activision Blizzard. It’s a little bit of what I’ve learned at Unilever, quick service restaurants and Activision, all put together in a new challenge. The best experiences will make me a better marketeer and a better leader.

This will be your first time working in a startup environment. Do you anticipate that there will be a learning curve or that you will face any new challenges? What do you expect?

I think it’ll be fun. Sorry if my answer is not technical.

I always – especially when I was at RBI – have tried to push for a startup mentality. RBI was very big but it never felt that way – we were very quick with decision-making, and the team was very united and had each other’s backs. I really enjoyed my stint at RBI because of that. We had a big business, but we were operating it as if it were something small – everyone had an owner-type of mindset.

I don’t sweat the [fact that] we are small and we don’t have as much of a budget as the other guys. Because honestly, the things that I'm most proud of … in my career were not really expensive. I truly believe that creativity can help you bridge that gap and do more with less, and I’ve done that.

I was not planning [explicitly that] my next step was going to be a startup. But when the opportunity appeared I was like, ‘Well, I think I’ll have a good time.’ I think it’ll be really fun to work with a smaller team that’s very engaged. It’s the spirit that we can really grow dramatically, which, when you are large, is harder. I’m excited about being at a startup – ask me again in two or three years.

Do you think the plant-based food category is ripe for innovation?

Yeah. I almost see what we have done so far as ‘step one’ in the journey. By that, I mean that we did a really good job in terms of analyzing animal-derived products and leveraging our AI technology – his name Giuseppe, by the way, our chat-slash-food-science [program]. We work with him to create formulations of a product that matches the animal-derived one. But Giuseppe can do more than that – we can do things like create flavors that don’t exist, based on understanding people's preferences. It’s really unlimited, what we can do when it comes to food.

It’s more than just [flavor] replacement. How can we leverage our technology to create elevated products, you know, in terms of taste, in terms of functional benefits, in terms of emotional benefits? What if I brief Giuseppe to create a snack that gives you joy, or to create a coffee without caffeine and without coffee beans? Like we can do that type of stuff.

I love to be in a company that’s at the forefront of its field and leveraging technology to break ground in new territories. It's on us now to unlock that potential and create disruption in the industry. Just talking to Matias, he will demand that we do things in a creative way, in a different way. He is not necessarily the typical consumer packaged goods CEO, you know what I mean? The creative ambition and the vision, in terms of the size of the disruption we want to bring to the marketplace, are enormous.

What do you see as the biggest marketing opportunities for the brand? What can we expect to see from you?

It’s a combination of things. It’s us bringing innovative products to the marketplace with the brand. We already have a very strong position in different markets in the US, but we still have a lot of opportunities to grow. That’s like, one pillar.

Then we have opportunities around food services, like partnerships with the likes of Shake Shack in the US, Starbucks in Mexico or Burger King in different countries in Latin America – which in my view, work almost as a flywheel with the first pillar. Let’s not forget that NotCo is still a young brand. So when you see a NotCo product in a Starbucks, it’s a massive stamp of credibility for the brand. It’s a sampling mechanism, too, because people are going to try it [at Starbucks] and then they can buy it at a retail store. That’s the second pillar.

And the third pillar is creating partnerships with other consumer packaged goods companies. And I think that the best example of that is the joint venture we have with Kraft Heinz. When I talk to [the Kraft Heinz team], I feel that we have the same ambition and mindset. And in a short period of time, NotCo will be [working to replicate] some very well-known staple products that are in the pantries of everyone in the US. Now they will have a plant-based version of those products.

I see opportunities in these three territories, and I also see opportunities for us to do things that haven't been done before. I think we will evolve to have truly elevated products on top of [the offerings we’re already working on].

Who is your target demographic? Who are you trying to reach?

It skews a bit younger and skews slightly higher income. But I think it will be much more mainstream than that [in the near future].

It’s so nice to create a great-tasting product because taste is the number-one driver of the category. In the past, lots of people wanted to eat more plant-based products – [especially] flexitarians like me. But they didn’t want to compromise on taste. So we are very focused on that – on demolishing that barrier for repeat purchase.

I also believe that over time, prices will come down as we get scale and as the category continues to grow. And that’s another barrier [right now]. And I don’t see companies being able to reach their sustainability targets without a significant increase in plant-based food [investments]. So I think that the industry is positioning itself to grow.

Of course, when you have recession or inflation, people get more mindful of the value-for-money perception of products, and. Over recent months, plant-based food has been making some headlines about [price]. But that, in my view, is a blip in a journey that can happen to any category. I think it’s going to become much more mainstream, so the core consumer base of today will not be the same as tomorrow.

You’re judging The Drum Awards for Marketing Americas this year. What does award-winning work look like in the plant-based foods category?

I think award-winning work in any category, at least for me, is rooted in a really powerful idea – which usually comes from a very clever or powerful insight and is really well-executed.

Sure, there are things that are trendy in a certain year, and lots of brands end up talking about and doing similar work. Sure, media fragmentation, and technology and the metaverse are all factors to consider. But to me, it boils down to how powerful the idea is, what the insight is and how well-executed it is.

Life sometimes is so complex, and things are constantly evolving. And the risk of getting lost in that complexity is high. So I try to see what’s new and how things are evolving, but I focus much more on things I know are not going to change. You know what I mean? A great idea wins. It wins in the marketplace with consumers, and if it wins some creative recognition, that's great, but it's never necessarily the objective.

I’m moved by ideas. And I know that ideas come from a simple brief, usually with insight behind them. And then you execute them really well. That’s the type of work I’m looking for when I’m judging and, when I’m leading, it’s the kind of work that I try to do.

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