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INNOVATION IN FOOD & BEVERAGE

Why Conceptual Innovation
Is Critical to Any Successful Strategy

 

Critical Consumer Insights as a Key Strategy to Drive Conceptual Innovation in F&B

Investing in building top notch consumer insight and consumer understanding capability is key to the success of Food & Beverage (F&B) innovation. As opposed to things like product superiority, conceptually driven innovation plays a much bigger role in F&B. If not apparent to the innovator, results may seem almost random. In this Thought Leadership, The Valen Group provides a framework and tools to help drive Conceptual Innovation overall, and in F&B specifically.

We define Conceptual Innovation as the consumer behavioral environment where the idea or concept drives emotional benefits that can be equally important or even more important than the product. To deliver on this objective it is critical to engage consumers in a relationship built on trust and create interactions with enough time (“context”) to truly understand the meaning in their needs. Think of it as providing the same level of understanding as you would with a friend or family member.

F&B is a complex sell because a food brand’s benefits are much more subjective and personal. Innovation history is cluttered with F&B stories of superior products that failed and products that were not as superior which succeeded and did quite well in the market place. This is because conceptual innovation in F&B can be equally impactful, and at times even more impactful, than technology driven innovation. Finding the right balance between concept and technology (marketers may think of this as the “idea” vs. “product”) to meet important and/or changing consumer needs is of crucial importance. This is less the case with functional categories such as detergents, diapers, feminine care, or toilet paper which deliver clearly defined and measurable benefits which can then be translated into technical demos.

How do we solve this issue?

Three factors are critical to success in F&B innovation:
  • Focus innovation on a holistic approach rather than being focused on investing in technology.
  • Do not skip over framing the problem. Spend more time defining or refining the target consumer to uncover the context in which they will choose and consume the solutions you might produce
  • Abandon traditional consumer insight methods that limit interaction and are “event-based.” Building relationships to truly understand the life, context, desires and needs of the target consumer is the basis for conceptual breakthroughs. Most times these conceptual breakthroughs have the advantage of being less technology dependent and lead to product and commercial initiatives that are less capital intensive. 
A successful F&B innovation program would also include a number of strategies to choose from. Try looking through innovation lenses like these to help you get started:
  • Benefit Transparency. Discontinuous product innovation is better when focused on consumer transparent benefits that provide immediate value such as convenience or economy. Transparent advantages are easy to measure and are self-evident. Health innovation works when it is transparent and has a high present value.
  • Brand Extension Strategies. Investing behind proven capability is more cost-effective and less risky. It can be more productive to focus on extensions behind strong brand equities and sustained success models.
  • Versioning Strategies. Flavor, texture, or form variety or versioning is a good strategy to refresh and extend initiatives to keep consumers with the brand. Versioning requires low investment and deliver good consumer value and attractive margins.
  • Lean Learning Markets Strategies. This is particularly true when there are challenges in getting the proposition right the first time. In-market learning to shake-out the bugs before making big investments will help find the weak spots and killer issues, if not identified earlier. Faster cycle to market would improve both learning and capability, which emphasizes the importance of early experimentation with business models and testable prototypes to confirm consumer satisfaction.
 

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