19 December 2018 825 words, 4 min. read

Here are the 4 reasons why innovations in the food sector fail

By Pierre-Nicolas Schwab PhD in marketing, director of IntoTheMinds
One of the conclusions from my SIAL 2016 report was that many innovations were launched without having the consumer in mind and without market research. Those innovative products were doomed to fail and 80% weren’t actually theree anymore 12 months […]

One of the conclusions from my SIAL 2016 report was that many innovations were launched without having the consumer in mind and without market research. Those innovative products were doomed to fail and 80% weren’t actually theree anymore 12 months after they had been launched. For most of them no market research had been carried out. I’ve carried out dozens of interviews at SIAL 2018 to confirm this hypothesis. Surprinsingly, my findings show that firm size doesn’t matter here. Whatever their size, food compaies are equally unlikely to do market research before launching a new product.
Another finding from my visit at SIAL Paris 2018 is that many “innovative” products bring actually no value to consumers. A basic market research would have helped fix the most obvious problems.

I’m not here to blame or ridiculize anyone but I think giving some concrete examples might help reduce the failure rate for entrepreneurs in the food and drink industry.

Keep in mind: There are 3 things you must focus on to succeed in the food market: quality, easiness, health.

Failure factor #1 : not good enough

Some products, in spite of being called “innovative”, are just not good enough to attract consumers’ attention. Keep in mind that in all markets quality is a pre-requisite (if you want to be convinced, re-read this analysis of the food market trends where quality is the #1 factor of choice).
You can have the most innovative, the sexiest food product of the world, if it’s not good nobody will buy it.
The artichoks chips by Cynara for instance caught my attention but didn’t pass the tasting. The product wasn’t different and tasty enough to lead to repeat purchases.

Keep in mind

Quality is the #1 factor of choice in all markets. If you want to build on customer loyalty, you must focus on quality first (which will lead to customer satifaction).

Failure factor #2 : differenciation that consumers don’t care about

I’ve seen a lot of interesting innovations from a packaging perspective, taking ecological consideration into account but one of my recurrent questions is : do consumers care ? Rolli won a SIAL Innovation award with a product that combined several value proposals :

  • pesticide free deep-frozen vegetables
  • ecosustainable production chain and low-impact farming techniques
  • recyclable paper bag

While consumers undoubtly look for healthy food alternatives and will certainly be attracted towards pesticide-free products, I’m more cautious about the perceived value of an ecosustainble production chain and of a recyclable paper bag.

Keep in mind

The value you see in your products in not necessarily the value that consumers see. In fact firms and consumers are seldom aligned in terms of how they perceive the value of an offer. That’s where market research comes in. Sound market research will help you understand what customers really value and will help you focus on just that.

Failure factor #3 : niche segments that are really too small

Everybody will agree that the vegan market is growing. And indeed it’s growing at a fast pace. Nonetheless vegans represent only 1% of all consumers. If you’d need to invest your money in the next big thing, would it be on the 1% vegans or on the remaining 99% ?

In short, the size of the market is also instrumental to your survival. Carefuly choose your market (which requires good market research) and resist the temptation to follow your intuition. Sometimes it will lead you on a one-way street.

Keep in mind

Looking at your own consuption patterns is not indicative of the market trends in general. Use market research techniques to focus on what most consumers want. Niche markets are often to small for new entrants and are therefore more difficult to conquer.

Failure factor #4: minor innovation

the last failure factor revolves around the value brought by the innovation itself. Sometimes firms innovate for the sake of innovating. Yet, innovaton is not an end in itself. Innovation must bring value to the customer (qualitative market research is a good technique to assess that value).
Actually innovation must bring a lot of value to the customer to :

  • convince her to change her habits and to try the new product
  • foster her loyalty and ensure repeat purchases

At SIAL 2018 I’ve seen once again too many food companies offering little or no additional value with their “innovation”. This was especially true for firms using “super ingredients”. Adding a little bit of a super food to an existing recipe isn’t enough in my opinion to be innovative. It takes more efforts than that to bring real value to the customer.

Keep in mind

Don’t take it easy. Great innovation requires great effort. Focus on customer value, use qualitative and quantitatve market research methods to find out what consumers value most, before embarking on th path to innovation. If you find out it’s too complicted or costly, resist the temptation of minor innovation. Focus rather on quality. You can’t go wrong with great quality. It will always reward you with customer satsfaction and loyalty.

Posted in Marketing.

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