How to successfully innovate in the CPG sector…

Posted by Janice Wong on 29th January 2010

The most successful new product pacesetters of the last fifteen years have addressed consumer needs or redefined a category, reports market researchers IRI, upon releasing a new report on successful product innovation and strategies for market success in the consumer packaged goods (CPG) market in the past 15 years.

The report, titled “15 Years of New Product Pacesetters: Excellence in Innovation Drives CPG to the Next Level,” evaluates best-in-class innovations, gives insights to the secrets of new product success and analyses the opportunities of the ever-changing CPG market.

“This report analyses game-changing product introductions that raised the bar on product innovation,” IRI Shopper Marketing and Innovation President Thom Blischok said. “As such, these products have had a powerful impact on consumers’ purchase and consumption habits. This correlation will remain true for future successful products, although, it is likely that shoppers’ new definition of value will shape product innovations of tomorrow more than in the past.”

Outstanding new products of the past 15 years have mostly been based on a consumer need, or given new meaning to a category. In the food and beverage segment, the Frito WOW! line of snacks, which achieved New Product Pacesetter status in 1999, supported consumers’ eagerness to eat healthier foods, offering 30-50 per cent less fat. Frito WOW! drove home the notion that consumer interest in low fat/healthier CPG options had increased significantly and that the time had come for CPG manufacturers to solidify the technology to address this growing trend.

The most successful non-food Pacesetters can be attributed to the ever changing CPG market’s major shift toward self-reliant healthcare and experiential living. Eight of the top 20 non-food pacesetters introduced during the last decade are prescription to over-the-counter switch products, such as Claritin and Zyrtec. In addition, Swiffer redefined how people clean their homes, and Gillette enhanced the shaving experience with Gillette Fusion, Gillette MACH3 and Gillette MACH3 Turbo products.

For the future, IRI anticipates that health and wellness will continue to drive food and beverage innovation, and also expects that products providing enhanced sensory experiences will continue to enjoy success. Sustainable packaging will be an increasingly important consideration, driven both by environmental considerations, and manufacturers’ desire to drive down costs.

IRI recommends CPG retailers and manufacturers to consider the following action steps regarding new product launches:

  • To maximise new product relevance and impact, base new product initiatives on pervasive and/or emerging consumer trends and high-potential consumer markets; heavily market new products to build awareness and understanding of offerings.
  • Evaluate the risk versus return associated with choosing one innovation method over others; balance innovation efforts to bring to market smaller, more consistent launches as well as groundbreaking new brands, as warranted by opportunity and corporate growth strategies.
  • Integrate up-and-coming benefits into all new product development efforts; heavily market new product/packaging features across all media and in-store marketing efforts.