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Social media and increased consumption at home are putting new pressure on food companies to innovate faster than ever.
Traditionally, food innovation has been the domain of restaurants, where chefs surprise consumers with unexpected flavors or ingredients. But with nearly 40% of Americans eating out less often, consumers are turning from menus to grocery stores for inspiration.
This is creating new opportunities and challenges for leading food companies, executives and experts, he said at The Future of Food & Packaging Innovation, a virtual event hosted by Food Dive and Packaging Dive earlier this month.
Grocery store shelves are overflowing with innovative new products that leverage the flavors of a variety of dishes or focus on specific trendy ingredients like pickles or hot honey. Consumers now have a variety of options to choose from to bring the restaurant experience home.
“For the first time a few years ago, we saw consumers saying they were creating more innovation in their homes and home kitchens,” said Mike Kyosto, vice president of consulting firm Menu Matters. “We’re seeing a lot more innovation in CPG in supermarkets, and we’re also seeing frozen food stores stocking global products like we’ve never seen before.”
For companies, this means increasing pressure to launch new products that will stand out from the competition.
“We need to get a lot faster,” said George Vindiola, director of corporate research and development at The Campbell’s Company. He added that the pace of innovation is one of the biggest changes the food industry has seen in nearly 30 years.
Businesses must keep up with social trends, eating preferences, and changing demographics. Otherwise, Vindiola said, “you could be missing out on some business opportunities” in today’s fast-paced environment.
Your time to act is also limited. Social media has significantly shortened the lifespan of ingredient trends, with TikToks tiring consumers of flavors like Dubai chocolate in just six to eight months, Kyosto said.
Compressed timelines are forcing many companies to face the question of whether to chase every new trend or instead focus their innovation efforts on smaller, bolder investments. At Campbell’s, for example, the company is doubling down on larger “platform innovation,” according to Vindiola, while relying less on limited flavors and collaborations for the Goldfish brand.
“At some point, you can only do so many flavors, so many LTOs, so many cool co-branding opportunities,” he said. “It takes investment, whether it’s marketing, equipment, new materials, whatever. And we think it’s worth it. If we’re going to grow in this area, we need to make that level of investment.”
But focusing all efforts on just one innovation strategy, especially for smaller companies, can be risky, said Arlene Karan, former chief research and development officer at Hain Celestial. This is especially dangerous because nearly 30,000 new products are launched each year, and 95% of them fail, according to a study by Harvard Business School.
Karan said that launching a new product is like raising a child, requiring ongoing investment and attention “to ensure that children continue to grow healthily as they transition out of diapers and into school.”
The amount of investment and risk involved led Hain to think more broadly in his approach and invest in a few big, bold innovations supported by “small bets.”
“Overall, we want to grow the trajectory of innovation versus putting all our investments in one spot because the risk profile for innovation is high,” she said.
