SKU’d Thoughts 14: Will embracing failure help Big CPG innovate?

During my time at Big CPG, I found the new product development process to be slow and bogged down by the countless internal meetings it took to get a product to market. The time and resources that go into all of these meetings leads to less productivity and less innovation. The approach, from my perspective, is best described as “let’s develop something that cannot fail” but that only stifles innovation because companies don’t risk deviating too far from what has worked in the past.

This approach is somewhat understandable because traditionally Big CPG has been given little leeway for failure from consumers so companies become formulaic to increase the probability of satisfying consumers. Today’s consumers have changed — they are looking for products that are directly made for them but the way legacy CPG companies approach product development remains the same. This is why we see brands like Halo Top and Impossible Foods growing quickly and taking market share. According to the Boston Consulting Group, “upstart brands took $22 billion in sales from incumbents in North America alone.” These emerging brands set out to develop products for a specific niche instead of appealing to all consumers.

Big CPG should change its strategy of developing products that are safe bets to one that is more experimental and doesn’t shy from failure. This shift would allow companies to respond to consumer trends and quickly discontinue products that have little traction.

As consumers gravitate towards brands that fulfill their specific needs, there is an opportunity gap that will either continue to be filled by startups who are brave enough to experiment or by Big CPG companies who modify their product development strategy.

Cross-posted on Medium