A CONSUMER GOODS INNOVATION STRATEGY IS KEY IN THE CONSTANTLY CHANGING CPG INDUSTRY
No surprise: a carefully-built consumer goods innovation strategy is vital to growth, but successful execution is difficult. Overwhelmingly, innovation strategies in the consumer goods space tend to focus on brand extensions, rather than fundamentally new categories. Unfortunately, when the strategy is focused there, it’s only a matter of time before there is a confusing jumble of SKUs that fuel high costs and threaten to cannibalize existing sources of revenue.
What drives the challenge in developing a viable consumer goods innovation strategy? On the user end, it is very hard to change ingrained consumer behaviors. Brands themselves have also become increasingly fragmented, making it harder for innovations to stand out. On the retailer side, new brands can struggle to fit into existing retail merchandising schemes (the Colgate Wisp single-use toothbrush, for example, was stocked initially in both oral care and confectionery). And that's not even mentioning private label, which has had great success at knocking off new products, occasionally even beating brands to national roll-out.
CAPABILITIES IN CONSUMER GOODS
New Markets Advisors has a long history of helping companies successfully define their consumer goods innovation strategy. Finding a unique niche in the market can be a difficult task, but successful examples from the strategies of industry leaders leave clues. Some patterns used by winning companies include:
CONSUMER GOODS CASE STUDY
A major food company came to us looking for new ways to target couples at mealtimes. The company saw that the marketplace was trending towards convenience, efficiency, and ready-made food -- like meal replacements and upscale convenience stores. But the data showed that couples were less keen to purchase these prepared foods. What would stick with couples?
New Markets Advisors used Jobs to be Done research to help the food company deeply understand its target segment and innovate in ways that were new to its category. This was accomplished through identification of both functional and emotional Jobs to be Done.
The research was surprising -- even though convenience products were flooding the market, couples were actually willing to spend about 20 minutes together preparing food. Couples were skeptical of all-in-one and ready-made meal solutions, but also were burdened by having to plan a meal from scratch. Rather, they needed a “sous chef” to help them create the meal they envisioned. They also needed help with that recurring and vexing question: what on Earth should I make for dinner tonight? This led the food company to develop a new line of meal kits where consumers could add their own personal touch to familiar salads and entrées.