Lately it seems innovation has earned its own 24-hour news cycle.
Corporate earnings reports and mission statements are littered with the term, and it’s perpetually the topic of books, newsletters, blogs, LinkedIn articles, moderated panels and industry conferences. A Google search for CPG innovation returned more than 5.7 million results. And yet, despite the vast amounts of time spent researching, analyzing, and pontificating about innovation, the CPG industry – big CPG, in particular – has a woefully poor track record.
Harvard Business School professor Clay Christensen famously estimated that of the more than 30,000 new products introduced every year, 95% of them fail1. A large study of the packaged food industry found that only 25% of new products were still around four years after launch2. By some estimates, as much as $35 billion is spent annually on failed innovation.
Plenty of industry veterans have conducted post-mortems on CPG innovation, and most cite some combination of risk aversion, unrealistic goal setting, slow product development cycles, insufficient sales & marketing support, and general bureaucracy. We could add to the list – missing a human insight, over-relying on market intelligence, failing to plan for commercial viability – but in the end it’s easier to point the finger than articulate how to innovate successfully. Over the years Seurat Group has benchmarked hundreds of brands, from emerging challengers to billion-dollar blockbusters. We recently conducted an analysis to identify why certain innovation succeeds and identified seven habits of highly effective innovators.