The Valen Group conducted an analysis of Innovation strategy projects sponsored at the executive level from our firm and related strategic projects to identify trending innovation methods.
So what’s the right method for your brand?
Current innovation methods vary based on industry, risk tolerance, and company structure. In consumer brands, such as CPG and packaged food and beverage, trending innovation methods include:
1. Consumer-Driven Innovation
Uses deep consumer insights and data to guide product development.
Methods:
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- Jobs to Be Done (JTBD): Understand what “job” the consumer is hiring the product for (e.g., quick meal solution, indulgence, protein boost).
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- Human-Centered Design (HCD): Empathy-driven design to solve real consumer pain points.
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- Behavioral Data & AI Analytics: Predictive analytics to spot emerging trends.
Example: Nestlé uses AI-powered consumer trend tracking to develop new product concepts.
2. Agile Innovation & Rapid Prototyping
Borrowed from tech, this approach reduces risk by testing concepts early and iterating quickly.
Methods:
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- Minimum Viable Product (MVP): Launch a stripped-down version of the product to test demand (e.g., limited-time offer, regional test).
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- Sprint-Based Development: Fast, cross-functional teams iterate on concepts every few weeks.
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- Test & Learn Pilots: Small-market releases with real consumer feedback loops.
Example: Impossible Foods tested their plant-based burger with chefs before scaling nationally.
3. Partnerships (Open Innovation & External Collaboration)
Many companies lack in-house R&D depth and partner with startups, suppliers, or tech firms.
Methods:
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- Brand Collabortions and Licensing: Brand collaborations to give consumers new experiences or places to explore your brand. You can also license IP or brands with your brand (e.g., brand collab to emphasize a new positioning of your brand, license branded flavors or entertainment brands).
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- Supplier-Driven Innovation: Partnering with ingredient or packaging suppliers to leverage their R&D.
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- Startup Partnerships & Incubators: Investing in or acquiring emerging food tech startups.
Example: Local Cincinnati Chili restaurant and ice cream brand created a unique ice cream flavor that sold out of stores first week of announcement for Skyline Chili Graeter’s Ice Cream Collab.
4. Platform-Based Innovation
Building a long-term growth platform rather than launching one-off products.
Methods:
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- Core Technology Platforms: e.g. Improved Ingredients. Creating multiple products from a common base (e.g., plant-based protein across frozen meals, snacks, and sauces).
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- Trend Area Platforms: e.g., Health & Wellbeing. Developing product families that align with macro trends (e.g., aging, high-protein, no-dairy).
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- Need-Based Innovation: e.g., Convenience. Making every element of the experience elevate busy, time-compressed tensions identified from consumer insight such as observation or empathy.
Example: Mondelez’s “SnackFutures” platform develops sustainable and better-for-you snacking innovations.
5. Lean Portfolio Innovation (Balancing Risk)
Companies need a mix of safe bets and transformational ideas to sustain growth. Organizing teams and process around risk levels is common. For example,
Methods:
Portfolio Management Framework:
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- Core: Incremental improvements (low-risk, short-term).
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- Adjacent: Adjacent innovations (moderate risk, mid-term).
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- Transformational: Disruptive, Breakthrough innovations (high risk, long-term).
Example: VCs commonly use a Kill Fast, Scale Fast method to rapidly discontinue underperforming concepts and double down on winners in high risk. Unilever continuously tests small innovations in local markets before scaling globally.
6. Digital & E-Commerce-Driven Innovation
The shift to DTC (Direct-to-Consumer) and digital-first launches is changing how brands test and scale.
Methods:
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- E-Commerce-Exclusive Launches: Introducing products via DTC or Amazon before retail.
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- Personalization & AI: Using consumer data for custom product offerings (e.g., personalized nutrition).
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- Social Media-Driven Testing: Testing concepts through influencer partnerships and social media engagement.
Example: KIND Snacks used Instagram to gauge interest before launching new flavors.
Conclusion
Which Method is Best?
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- For a conservative frozen food manufacturer: Platform-Based Innovation, Agile Prototyping
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- For a trend-driven, fast-moving brand: Consumer-Driven, Digital Testing
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- For a large CPG with strong R&D: Lean Portfolio Innovation, Open Innovation
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- For agile, cost-managers: Partnerships, licensing (IP or brands) and collaborations
Talk to us to benchmark your methods, develop strategy and optimize your organization around your ideal innovation opportunity.
