What is it?
In CPG, innovation typically refers to new SKUs launched by a brand or category, ranging from breakthrough products that create new segments to smaller line extensions that refresh consumer interest.
Why is it important?
Innovation fuels category growth, helps brands capture new buyers, keeps existing shoppers engaged, and differentiates products in a crowded, competitive market.
What are some examples?
- Packaging: Packaging is important to a customer’s perception of a product. It communicates if a product is cheap or premium, easy or hard to use or open, and what benefits it might impart to the user. Graza changed the olive oil game by packaging their product in a squeeze bottle, and then got more media attention again by putting refills in a tallboy-style aluminum can.
- Flavors: As the American palate evolves, flavor innovation can come from many different areas – other cultures or cuisines, or from one side of the grocery aisle to the other.
- Functionality: Think of this as “food plus.” Innovators take an ingredient that has some functional property and add it to a normal food or beverage to enhance it, like adding cognitive-enhancing Reishi and Lion’s Mane mushrooms to ground coffee.
- Health & Diet: Home cooks and entrepreneurs alike ask themselves, how can I take this thing I love and tweak it to fit my new diet or lifestyle? Ice cream is the perfect example: whether you want classic dairy, A2 dairy, ketogenic, protein-packed, or plant-based, you’ve got options.
- Convenience: How can a product be easier to consume, or more frequently consumed?