20/20 INNOVATION SERIES

In recent years the CPG industry has taken a somewhat maximalist approach to innovation. Reams of concepts, rounds of testing, annually resetting cycles—often with the goal of maximum SKUs for maximum shelf space. But in our new COVID-shaped world, with retailers showing less appetite for new products and stressed-out shoppers defaulting to favorites, we need to rethink this approach. We need to innovate with more intention, and more efficiency, for greater impact. Below is our four-part 20/20 Innovation Series—named for the year we all started seeing things more clearly.

PT. 1:  SHARPEN YOUR STRATEGY

With less demand for innovation during the pandemic, this is a perfect time to take a step back and sharpen your strategy. Do you have an innovation strategy that reflects your brand idea and makes sense across your portfolio? If you don’t, you might be innovating for the wrong reasons—namely, for shelf space or short-term gains. Make sure you’re innovating to clarify and grow your brand in a way that will resonate with consumers for years.

Once you’ve honed that strategy, you might find you can shed some items in your pipeline—or even in your current offering. For example, JIF recently discontinued their peanut butter-based snacks to focus their innovations around peanut butter. So instead of peanut-based bars and clusters, they’re innovating new spreads and squeezable formats—and staying true to their core equity.

PT. 2:  FUTURE-PROOF

When we innovate for the future, we shouldn’t assume it will look like today—COVID has taught us that, if nothing else! And yet many brands are still ideating against consumer needs and demand spaces that over the past year have started to feel more musty than evergreen.    

Instead, we should create innovation scenarios: alternate visions of consumers’ needs that may or may not develop based on unknown societal, technological, environmental, economic and regulatory factors. By ideating against different scenarios, we can be ready for (almost) anything. Consumers can also be immersed in scenarios, to help them project how their needs might change in the future.

This approach might sound unwieldy—but planning for an unknown future is actually more efficient than assuming the present will never change. We recently used this scenario-planning approach in a study about the future of the snack bar category, by identifying potential seismic changes to the category and asking consumers to co-create ideas based on different visions of the future. And although we hadn’t predicted a pandemic and stay-at-home orders, we did foresee a future where snack bars might lose everyday relevance and need to pivot.

PT. 3:  ITERATE MORE, IDEATE BETTER

New product development often starts with the drawing board, whether it’s due to a resetting innovation cycle, or a new team who wants to shepherd a process from scratch. But many brands have great concepts in their archives that never saw the light of day, nixed for Capex reasons or for being ahead of their time—but they were anchored in a true need. By iterating on these concepts, refining and updating them, we can increase efficiency and build better concepts—while allowing our from-scratch ideation to focus purely on new areas and ideas.

Think of it this way: we tend to think of the innovation process as a funnel, but it can also be seen as building a brilliant holding room. Fill the room with great ideas, born from different future scenarios [hyperlink to pt. 2]—then bring them out and perfect them when they’re ready.

PT. 4:  INCUBATE ONLINE

Once a product emerges from a new ideation or is pulled from the innovation holding room to be turned into reality, selling it into brick-and-mortar retailers can be another resource-draining challenge—especially in the current climate. Before making this costly commitment, consider ways to incubate these ideas in an online DTC environment—where consumers are more likely to be in an exploratory mood, and the brand can retain more control. Traditional retail can still be your endpoint, but this gives you a period of flexibility to gauge consumer interest, tweak the product or positioning as needed, and build a case for retailers.

Many companies are using this strategy for new launches, including Mondelez’s SnackFutures which has launched Dirt Kitchen and CaPao via DTC. For Mondelez this was a pivot born of Coronavirus, but the strategy has been so successful, it will likely continue post-pandemic. And why not? It may be years before consumers’ shopping habits return to normal, if they ever do—and incubating online just makes sense.