Where has all the innovation gone?
There have been a number of articles in newspapers and food industry periodicals lamenting the lack of innovation, primarily by the world’s largest food manufacturers. Things like rebranding, changing packaging, reformulations, or new flavours have been touted as “product innovations.”
The only real innovations are coming from a small group of progressive multinational companies that see Canada as a great opportunity as a test market, or small startups that do their best but don’t have the funds, the expertise or resources to be able to make great ideas a success.
Retailers have to take some responsibility for this lack of innovation. Even for companies that are prepared to make the investment into what is needed to get an innovative product into stores, the fees associated with getting shelf space make it cost prohibitive. At the end of the day everyone loses. The consumer loses because they don’t have access to a wide range of innovative products. The manufacturer loses because they aren’t attracting new consumers, and retailers lose because consumers aren’t spending incremental dollars for new products. The lack of selection is pushing consumers to specialty retailers or online to seek hard to find or new and different products.
When manufacturers take the plunge into “innovation,” the resulting products often aren’t innovative because corporations want to play it safe. Because the costs of developing a great product, promoting it and getting space on the shelf are high, products tend to be variations of past successes. How many ways can we reinvent mac and cheese? It becomes a vicious circle with a high rate of failure even for the safe options.
There are common mistakes I see when companies are trying to “innovate.” Innovations are based on what the company can make, not what consumers are looking for. Once you figure out what consumers want, you can then operationalize it based on company needs. Companies come up with a product idea and either don’t test it properly or not at all. The key is to fail before you spend the real money. Ask the consumer what they want and what will make the product better. Product innovation isn’t a one shot deal, it is an iterative process.
When companies finally decide they are going to innovate and the data isn’t to their liking, they either force the data tell them what they want to hear or they ignore the research altogether. I was once asked to evaluate why a product wasn’t meeting the high expectations that were set. When I looked at the data it was clear where improvements could have been made but, because time was tight, it was launched without any product changes.
But, you can’t fail unless you try. The pay-off for success can be huge. Think about how some of the most innovative products revolutionized a category. The obvious examples come from the tech world: the iPod, the smartphone and the DVD player. More recent examples of game changers are the Swiffer, bottled water or cake mixes.
If everyone is looking for innovation why isn’t it happening? If retailers could provide manufacturers with an incentive for successful launches, a manufacturer might be more inclined to try. Manufacturers need to do their homework and give themselves the time to get it right. If retailers and manufacturers can work together to encourage innovation everyone, especially the consumer, will come out a winner.