Delivering Consumer Focused Innovation

Delivering Consumer Focused Innovation

The hype of disruptors in the food industry has prompted legacy brands to acquire start-ups or launch their own innovation incubators in a classic fast follower response. These disruptors are agile and receptive to latest consumer caprice and challenge the innovation planning and timeline capabilities of leading brands. To get this right, organisations need to reinforce the core levers of innovation: refine the pillars of the brand identity by understanding how consumer preferences are evolving, designing a process to efficiently respond to the opportunity that these present, and build-in flexibility in the go-to-market approach to fan off interruption from alternative business models.

Keeping your finger on the pulse of evolving consumer needs
Innovation up until recently was often linked with brand diversification. Whilst this has helped organisations reach untapped consumers, it has also distracted the focus on what the brand stands for. But with the increased scrutiny from consumers, many have reached a critical point to step back and re-assess the values that their brand represents.

The process begins by asking ‘What is the next big shift in consumer preference?’ and takes a look at long-term megatrends to shortlist the few that are most critical and relevant to the USPs in the portfolio. More importantly, it is essential to establish a method of monitoring the change of such megatrends over time or risk becoming exposed to disruptors who see and address further shifts in consumer needs faster and better.

The outcome of this assessment allows organisations to establish a clear direction for their product portfolio and to more effectively work with partners along the supply chain to innovate and co-create products that speak to evolving consumer needs.

What is healthy living today?
A prime example of such shift in megatrends is the evolution of health and wellness just over a short decade. Health and wellness, which is a US$718bn food and beverage segment globally, continues to be redefined and impacts the industry across the supply chain. Healthy is defined as natural today; it is not about the omission of ingredients but about nutritional value, transparency and responsible sourcing, and all underpinning indulgence and satiety experience.

The focus on wellness has, for instance, manifested in increasingly mindful eating and demand for a sensorial and curated experience. Consumers are extra vigilant in scrutinizing the ingredients and look for natural, simple labelling and sustainable alternatives. This is fostering innovation in segments such as plant-based dairy, meat substitutes and naturally healthy ingredients such as super foods, super grains and fungi.

Monitoring such megatrends closely and over time allows brands and their partners to achieve two objectives: to align product development with evolving needs and to support future innovation by having a clear reference point for portfolio development within this space.

Efficient assessment of product potential
With such a clear direction in mind, it is important to assess the critical factors that will help brands win in a disruptive environment. As the innovation pipeline is shortened, a streamlined go/no-go validation is necessary.

As a result, we have seen the emergence of innovation incubators across large multinationals that develop category agnostic, P&L and brand free seeds to help combat pressure from disruptors and align portfolio evolution with frequently changing consumer trends.

Increasingly, such seed ideas utilise alternative channels such as foodservice as a testing platform for food innovation, efficiently leverages the crowdsourcing and direct feedback element. It is where chefs are able to blend ingredients and assess the appeal of new formats. This has fostered for example the re-discovery of ancient ingredients such as turmeric, the adoption of sustainable sourcing utilizing food waste, or the development of alternative food formats such as the power balls in snack bars.

Foodservice is a good innovation platform as it also can provide the sensorial and curated experience beyond taste but on an elevated experience with new textures, new ingredients and blended flavours. Increasingly such positively received foodservice trends are commercialised and adopted into a mainstream retail offer.

Effective go-to-market delivery critical for success
But whilst foodservices is a good testing ground, it has also become a key contender for consumers’ food spend. Trends such as the “uberisation” of food will also need to be transposed to a retail concept. Overall, what makes disruptors a key challenge is that they initiate a shift in business models which puts large multi-nationals at a disadvantage. Consumers today want a simplified, convenient, fun, mindful experience. Hence, whilst innovating the product, manufacturers need to maintain an open platform to adopt the delivery method from consumer. The popularity of on-line subscription services has seen strong success, but key features such as personalisation and convenience have since been re-adopted by retail where we see the emergence of curated packs for easy meal preparation, for example.

The diversity of business model alternatives has put mainstream brands to a challenge and more than ever, a go-to-market strategy needs to be shaped at the inception of the product.

The pressure for accelerated innovation continues to rise. Social networks and sharing platforms, the focus on experience and personalisation has put established brands under scrutiny as dynamic and agile disruptors address with immediacy the erratic shift in consumer preference. Brands are addressing the needs of a more sophisticated consumer who is also looking for more simplified and natural nutrition. Niche, agile and local brands are able to easily embrace the current back-to-basics trend.

by Zandi Brehmer

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