" What makes great FMCG innovation? | Haines McGregor

Everyone knows the power of innovation.

Innovation transforms uncertainty into opportunity. It can revolutise an industry, maintain its relevance – or spark the growth of new sectors entirely.

What is less commonly known is how great innovations come to pass. How do you identify the ideas that excite both internal teams and external audiences? How can teams ensure that innovation doesn’t get lost in the journey from ideation to execution? How can we avoid the pitfalls of survivorship bias, where we only learn from the winners, not the failures?

Ahead of our event later this month, “Innovation: Are we (still) looking the wrong way?”, Jamie Holtum, Strategy Partner at Haines McGregor, sat down with one of our star panellists, Alicia Jitaru, European Brand Director at Mars Petcare, to explore the particular processes which power game-changing innovation.

Here is what was said.

What makes great FMCG innovation?
What makes great FMCG innovation?

Success often begets failure

“The simple fact is that most FMCG innovations fail,” opened Jamie Holtum. “Over 97% of innovations in the sector get delisted within two years – and this rate shows no signs of changing. This is hugely costly – so what can brands do?”

Alicia agreed – but pointed out that some failure is an important part of the cycle of innovation. “I’ve worked on innovation for brands all around Europe – and I have seen first hand how innovative companies fail much more than they succeed. But they foster a culture of embracing failure and learning from the losses.”

The problem brands face isn’t the fact that they are failing – it is how they analyse their failures. Game-changing insights and innovation can often be found in the cracks of a failed idea. “You need to know what worked, what went wrong – and why,” underlined Alicia.

But FMCG brands are formed of constantly changing faces and agency partners. So how can these brands avoid repeating the mistakes of former partners?

“This is a big issue and to counter you need to invest in properly capturing learnings,” answered Alicia. “This is more than just having a word doc saved, gathering dust in an unused folder. Ideas need to spread through osmosis. Sometimes you can have the right idea at the wrong time – or executed in the wrong way. A failed idea could be game-changing in a different context.”

“Brands can’t afford to simply follow the ideas that are already alive and kicking in-market. The survivorship bias of learning from success doesn’t change the game – or change the rate of failure in innovation.”

Alicia highlighted teaming up with Haines McGregor on her work with dog food brand James Wellbelloved as an example. “All the innovation we unearthed in our ‘superfoods’ work became the foundation for future experiments and ideas. This meant we were able to create a pipeline of innovation focused on solving consumer needs – fuelled by tried and tested consumer insights.”

What makes great FMCG innovation?
What makes great FMCG innovation?

Harnessing internal cultural energy 

Innovation works when it solves consumer needs. But to get to that stage it has to first excite internal teams.

“You need to capture the interest of key internal stakeholders,” noted Alicia “Getting this internal interest and buy-in secured is the first stage of life for any good idea. It may seem minor – but it’s fundamental. Great innovation is the business of getting lots of small decisions right.”.

To excite internal teams – it is crucial to involve them early and often. Get their perspective on product/market fit and contrast it with consumer insights. “Our best ideas come when we collide internal expertise with external insight – such as those from nutritionists for example. This cross-pollination helps new innovations bloom. You need the buy-in of those who will sell a product just as much as those who will buy it”.

This energy shouldn’t just drive a product to launch. “Mars and other brands have seen success through a ‘launch and learn’ model – where you specifically test new products or ideas in an isolated ecosystem or market. You can launch something online – then test, learn and iterate as it moves into physical stores or new markets.”

“For us at James Wellbeloved, we have created a culture of interviewing everyone. And I mean everyone. Consumers, experts, internal stakeholders. Investigate the spaces and co-create internally with your team – and externally with consumers. This helps us narrow our focus and talk about innovation in the consumer’s own words.”

Focus on the needs 

How does so much innovation make it through all the internal processes and get to market – only to fail? Jamie cited an insight from marketing guru Rory Sutherland.

“Brand and marketing managers are often incentivised in the wrong way. They are looking for ideas which get the green tick at each internal hurdle. These hurdles aim to stop ineffective innovation getting out the door. And they allow product managers to cover their own backs if ineffective work does make it through – if it passed our checks it wasn’t my fault!. But this misses the point – and fails to solve customer needs”.

Alicia agreed and picked up on this. “Sometimes we are incentivised to trust our gut and our expertise. But then when it gets to market – consumers have no interest in the product. Internal buy in is important – but solving consumer needs is everything.”.

“You need to know if you are launching into a sector which people are moving towards – or if you are attempting to change consumer behaviour entirely. Not all innovation radically transforms a sector. These incremental innovations – such as new formats or flavours – keep brands relevant as consumer needs develop.

“You can count on one hand the amount of products which disrupt entire categories – look at something like P&G and washing pods. This type of innovation is game-changing because it satisfies customer needs that they themselves struggle to verbalise. It shows that truly transformational, radical innovation comes from focusing on more than just growing sales figures – it happens when marketers can fuse culture, consumer needs and their brand together.

“There are a lot of reasons why innovation fails.” Alicia summarised. “But critically, whether your innovation is aiming to be incremental or transformative, if it’s not solving a consumer tension, it will fail. Start with the consumer, and you’ve got a good chance.”

To hear more from Alicia & Jamie, join our free webinar on the 24th of February in which we explore why so many brands are still failing at innovation – and ask if they’re looking at innovation in the wrong way.

What makes great FMCG innovation?